e10vk
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2007
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 0-20167
MACKINAC FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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MICHIGAN
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38-2062816 |
(State of other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.) |
130 South Cedar Street, Manistique, Michigan 49854
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (888) 343-8147
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best
of Registrants knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendments to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer þ
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
The aggregate market value of the common stock held by non-affiliates of the Registrant, based on a
per share price of $9.45 as of June 30, 2007, was $16.1 million. As of March 27, 2008, there were
outstanding, 3,428,695 shares of the Corporations Common Stock (no par value).
Documents Incorporated by Reference:
Portions of the Corporations Annual Report to Shareholders for the year ended December 31, 2007,
are incorporated by reference into Parts I and II of this Report.
Portions of the Corporations Proxy Statement for the Annual Meeting of Shareholders to be held May
28, 2008, are incorporated by reference into Part III of this Report.
TABLE OF CONTENTS
PART I
ITEM 1. BUSINESS
Mackinac Financial Corporation (the Corporation) was incorporated under the laws of the state of
Michigan on December 16, 1974. The Corporation changed its name from First Manistique
Corporation to North Country Financial Corporation on April 14, 1998. On December 16, 2004, the
Corporation changed its name from North Country Financial Corporation to Mackinac Financial
Corporation. The Corporation owns all of the outstanding stock of its banking subsidiary, mBank
(the Bank). The Corporation also owns three non-bank subsidiaries: First Manistique Agency,
presently inactive; First Rural Relending Company, a relending company for nonprofit organizations;
and North Country Capital Trust, a statutory business trust which was formed solely for the
issuance of trust preferred securities. The Bank also has four non-bank subsidiaries: NCB Real
Estate Company, which owns real estate used by the Bank; mBank Mortgage Company, LLC, an entity
engaged in the business of mortgage lending and brokering; and mBank Employee Services, LLC, a
company that leases employees to mBank. The Bank represents the principal asset of the
Corporation. The Corporation and its subsidiary Bank are engaged in a single industry segment,
commercial banking, broadly defined to include commercial and retail banking activities, along with
other permitted activities closely related to banking.
The Corporation became a registered bank holding company under the Bank Holding Company Act of
1956, as amended, on April 1, 1976, when it acquired First Northern Bank and Trust (First
Northern). On May 1, 1986, Manistique Lakes Bank merged with First Northern. The Corporation
acquired all of the outstanding stock of the Bank of Stephenson on February 8, 1994, in exchange
for cash and common stock. The Bank of Stephenson was operated as a separate banking subsidiary of
the Corporation until September 30, 1995, when it was merged into First Northern. First Northern
acquired Newberry State Bank on December 8, 1994, in exchange for cash. On September 15, 1995,
First Northern acquired the fixed assets and assumed the deposits of the Rudyard branch of First of
America Bank, in exchange for cash. The Corporation acquired all of the outstanding stock of South
Range State Bank (South Range) on January 31, 1996, in exchange for cash and notes. On August
12, 1996, First Northern and South Range changed their names to North Country Bank and Trust and
North Country Bank, respectively. On February 4, 1997, the Corporation acquired all of the
outstanding stock of UP Financial Inc., the parent holding company of First National Bank of
Ontonagon (Ontonagon). Ontonagon was merged into North Country Bank. North Country Bank was
operated as a separate banking subsidiary of the Corporation until March 10, 1998, when it was
merged into North Country Bank and Trust. On June 25, 1999, North Country Bank and Trust acquired
the fixed assets and assumed the deposits of the Kaleva and Mancelona branches of Huntington
National Bank in exchange for cash. On July 23, 1999, North Country Bank and Trust sold the fixed
assets and deposits of the Rudyard and Cedarville branches to Central Savings Bank in exchange for
cash.
On January 14, 2000, North Country Bank and Trust sold the fixed assets and deposits of the Garden
branch to First Bank, Upper Michigan in exchange for cash. On June 16, 2000, North Country Bank
and Trust acquired the fixed assets and assumed the deposits of the Glen Arbor and Alanson branches
of Old Kent Bank, in exchange for cash. On July 13, 2001, North Country Bank and Trust sold the
fixed assets and deposits of the St. Ignace and Mackinac Island branches to Central Savings Bank in
exchange for cash. On November 9, 2001, North Country Bank and
2
Trust sold the fixed assets and deposits of the Curtis and Naubinway branches to State Savings Bank
in exchange for cash. On November 22, 2002, North Country Bank and Trust sold the fixed assets and
deposits of the Menominee branch to Stephenson National Bank and Trust in exchange for cash.
During 2003, the Bank closed branch locations at Glen Arbor, Ishpeming, LAnse, and Petoskey.
In 2004, the Bank sold the fixed assets and deposits of the Mancelona and Alanson branches to First
Federal of Northern Michigan in exchange for cash, the fixed assets and deposits of the Munising
branch to Peoples State Bank in exchange for cash, and the fixed assets and deposits of the Iron
Mountain and Escanaba branches to the State Bank of Escanaba in exchange for cash. The Bank also
closed the branch locations of Boyne City, Cadillac, Calumet, Sault Ste. Marie Cascade, and one of
its branch locations in Traverse City.
In 2007, the Bank sold the fixed assets and deposits of the Ripley branch office located in
Hancock, Michigan.
The Bank currently has 8 branch offices located in the Upper Peninsula of Michigan and 4 branch
offices located in Michigans Lower Peninsula. The Bank maintains offices in Antrim, Chippewa,
Emmet, Grand Traverse, Houghton, Luce, Manistee, Marquette, Menominee, Oakland, Ontonagon, Otsego,
and Schoolcraft Counties. The Bank provides drive-in convenience at 10 branch locations and has 10
automated teller machines. The Bank has no foreign offices.
The Corporation is headquartered and located in Manistique, Michigan. The mailing address of the
Corporation is 130 South Cedar Street, Manistique, Michigan 49854.
Operations
The principal business the Corporation is engaged in, through the Bank, is the general commercial
banking business, providing a full range of loan and deposit products. These banking services
include customary retail and commercial banking services, including checking and savings accounts,
time deposits, interest bearing transaction accounts, safe deposit facilities, real estate mortgage
lending, commercial lending, commercial and governmental lease financing, and direct and indirect
consumer financing. Funds for the Banks operation are also provided by brokered deposits and
through borrowings from the Federal Home Loan Bank (FHLB) system, proceeds from the sale of loans
and mortgage-backed and other securities, funds from repayment of outstanding loans and earnings
from operations. Earnings depend primarily upon the difference between (i) revenues from loans,
investments, and other interest-bearing assets and (ii) expenses incurred in payment of interest on
deposit accounts and borrowings, maintaining an adequate allowance for loan losses, and general
operating expenses.
Competition
Banking is a highly competitive business. The Bank competes for loans and deposits with other
banks, savings and loan associations, credit unions, mortgage bankers, and investment firms in the
scope and type of services offered, pricing of loans, interest rates paid on deposits, and number
and location of branches, among other things. The Bank also faces competition for investors funds
from mutual funds and corporate and government securities.
3
The Bank competes for loans principally through interest rates and loan fees, the range and quality
of the services it provides and the locations of its branches. In addition, the Bank actively
solicits deposit-related clients and competes for deposits by offering depositors a variety of
savings accounts, checking accounts, and other services.
Employees
As of December 31, 2007, the Corporation and its subsidiaries employed, in the aggregate, 109
employees equating to 100 full-time equivalents. None of the Corporations employees are covered
by a collective bargaining agreement with the Corporation and management believes that its
relationship with its employees is satisfactory.
Business
The Bank makes mortgage, commercial, and installment loans to customers throughout Michigan. Fees
may be charged for these services. The Banks most prominent concentration in the loan portfolio
relates to commercial loans to entities within the real estate operators of nonresidential
buildings industry. This concentration represented $41.597 million or 14.40% of the commercial
loan portfolio at December 31, 2007. The Bank also supports the service industry, with its
hospitality and related businesses, as well as gaming, forestry, restaurants, farming, fishing, and
many other activities important to growth in Michigan. The economy of the Banks market areas is
affected by summer and winter tourism activities.
The Bank also offers various consumer loan products including installment, mortgages and home
equity loans. In addition to making consumer portfolio loans, the Bank engages in the business of
making residential mortgage loans for sale to the secondary market.
The Corporation may pursue new lease opportunities through unrelated entities, where the credit
quality and rate of return on the transactions for its current business strategies. The Bank
accounts for lease transactions as loans.
The Banks primary source for lending, investments, and other general business purposes is
deposits. The Bank offers a wide range of interest bearing and non-interest bearing accounts,
including commercial and retail checking accounts, negotiable order of withdrawal (NOW) accounts,
money market accounts with limited transactions, individual retirement accounts, regular
interest-bearing statement savings accounts, certificates of deposit with a range of maturity date
options, and accessibility to a customers deposit relationship through online banking. The
sources of deposits are residents, businesses and employees of businesses within the Banks market
areas, obtained through the personal solicitation of the Banks officers and directors, direct mail
solicitation and limited advertisements published in the local media. The Bank also utilizes the
wholesale deposit market for any shortfalls in loan funding. No material portions of the Banks
deposits have been received from a single person, industry, group, or geographical location.
The Bank is a member of the FHLB. The FHLB provides an additional source of liquidity and
long-term funds. Membership in the FHLB has provided access to attractive rate advances, as well
as advantageous lending programs. The Community Investment Program makes advances to be used for
funding community-oriented mortgage lending, and the Affordable Housing Program grants advances to
fund lending for long-term low and moderate income owner occupied and affordable rental housing at
subsidized interest rates.
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The Bank has secondary borrowing lines of credit available to respond to deposit fluctuations and
temporary loan demands. The unsecured lines totaled $14.875 million at December 31, 2007, with an
additional $10.571 million available if collateralized.
As of December 31, 2007, the Bank had no material risks relative to foreign sources. See the
Interest Rate Risk and Foreign Exchange Risk sections in Managements Discussion and Analysis
of Financial Condition and Results of Operation in the Corporations 2007 Annual Report to
Shareholders, which sections are incorporated herein by reference, for details on the Corporations
foreign account activity.
Compliance with federal, state, and local statutes and/or ordinances relating to the protection of
the environment is not expected to have a material effect upon the Banks capital expenditures,
earnings, or competitive position.
Supervision and Regulation
As a registered bank holding company, the Corporation is subject to regulation and examination by
the Board of Governors of the Federal Reserve System (Federal Reserve Board) under the Bank Holding
Company Act, as amended (BHCA). The Bank is subject to regulation and examination by the Michigan
Office of Financial and Insurance Services (OFIS) and the Federal Deposit Insurance Corporation
(FDIC).
Under the BHCA, the Corporation is subject to periodic examination by the Federal Reserve Board,
and is required to file with the Federal Reserve Board periodic reports of its operations and such
additional information as the Federal Reserve Board may require. In accordance with Federal
Reserve Board policy, the Corporation is expected to act as a source of financial strength to the
Bank and to commit resources to support the Bank in circumstances where the Corporation might not
do so absent such policy. In addition, there are numerous federal and state laws and regulations
which regulate the activities of the Corporation, the Bank and the non-bank subsidiaries, including
requirements and limitations relating to capital and reserve requirements, permissible investments
and lines of business, transactions with affiliates, loan limits, mergers and acquisitions,
issuances of securities, dividend payments, inter-affiliate liabilities, extensions of credit and
branch banking.
Federal banking regulatory agencies have established risk-based capital guidelines for banks and
bank holding companies that are designed to make regulatory capital requirements more sensitive to
differences in risk profiles among banks and bank holding companies. The resulting capital ratios
represent qualifying capital as a percentage of total risk-weighted assets and off-balance sheet
items. The guidelines are minimums, and the federal regulators have noted that banks and bank
holding companies contemplating expansion programs should not allow expansion to diminish their
capital ratios and should maintain all ratios well in excess of the minimums. The current
guidelines require all bank holding companies and federally-regulated banks to maintain a minimum
risk-based total capital ratio equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1
capital includes common shareholders equity, qualifying perpetual preferred stock, and minority
interests in equity accounts of consolidated subsidiaries, but excludes goodwill and most other
intangibles and excludes the allowance for loan and lease losses. Tier 2 includes the excess of
any preferred stock not included in Tier 1 capital, mandatory convertible securities, hybrid
capital instruments, subordinated debt and intermediate
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term-preferred stock, and general reserves for loan and lease losses up to 1.25% of risk-weighted
assets.
FDICIA contains prompt corrective action provisions pursuant to which banks are to be classified
into one of five categories based upon capital adequacy, ranging from well capitalized to
critically undercapitalized and which require (subject to certain exceptions) the appropriate
federal banking agency to take prompt corrective action with respect to an institution which
becomes significantly undercapitalized or critically undercapitalized.
In general, the regulations define the five capital categories as follows: (i) an institution is
well capitalized if it has a total risk-based capital ratio of 10% or greater, has a Tier 1
risk-based capital ratio of 6% or greater, has a leverage ratio of 5% or greater and is not subject
to any written capital order or directive to meet and maintain a specific capital level for any
capital measures; (ii) an institutions is adequately capitalized if it has a total risk-based
capital ratio of 8% or greater, has Tier 1 risk-based capital ratio of 4% or greater, and has a
leverage ratio of 4% or greater; (iii) an institution is undercapitalized if it has a total
risk-based capital ratio of less than 8%, has a Tier 1 risk-based capital ratio that is less than
4% or has a leverage ratio that is less than 4%; (iv) an institution is significantly
undercapitalized if it has a total risk-based capital ratio that is less than 6%, a Tier I
risk-based capital ratio that is less than 3% or a leverage ratio that is less than 3%; (v) an
institution is critically undercapitalized if its tangible equity is equal to or less than 2%
of its total assets. The FDIC also, after an opportunity for a hearing, has authority to downgrade
an institution from well capitalized to adequately capitalized or to subject an adequately
capitalized or undercapitalized institution to the supervisory actions applicable to the next
lower category, for supervisory concerns.
Information pertaining to the Corporations capital is contained in Managements Discussion and
Analysis of Financial Condition and Results of Operations under the caption Capital and
Regulatory in the Corporations 2007 Annual Report to Shareholders, and is incorporated herein by
reference.
Current federal law provides that adequately capitalized and managed bank holding companies from
any state may acquire banks and bank holding companies located in any other state, subject to
certain conditions.
In 1999, Congress enacted the Gramm-Leach-Bliley Act (GLBA), which eliminated certain barriers to
and restrictions on affiliations between banks and securities firms, insurance companies and other
financial service organizations. Among other things, GLBA repealed certain Glass-Steagall Act
restrictions on affiliations between banks and securities firms, and amended the BHCA to permit
bank holding companies that qualify as financial holding companies to engage in a broad list of
financial activities, and any non-financial activity that the Federal Reserve Board, in
consultation with the Secretary of the Treasury, determines is complementary to a financial
activity and poses no substantial risk to the safety and soundness of depository institutions or
the financial system. GLBA treats lending, insurance underwriting, insurance company portfolio
investment, financial advisory, securities underwriting, dealing and market-making, and merchant
banking activities as financial in nature for this purpose.
Under GLBA, a bank holding company may become certified as a financial holding company by filing a
notice with the Federal Reserve Board, together with a certification that the bank holding company
meets certain criteria, including capital, management, and Community Reinvestment Act requirements.
The Corporation does not qualify as a financial holding company at this time.
6
Privacy Restrictions
GLBA, in addition to the previous described changes in permissible non-banking activities permitted
to banks, bank holding companies and financial holding companies, also requires financial
institutions in the U.S. to provide certain privacy disclosures to customers and consumers, to
comply with certain restrictions on sharing and usage of personally identifiable information, and
to implement and maintain commercially reasonable customer information safeguarding standards. The
Corporation believes that it complies with all provisions of GLBA and all implementing regulations,
and the Bank has developed appropriate policies and procedures to meet its responsibilities in
connection with the privacy provisions of GLBA.
The USA PATRIOT Act
In 2001, Congress enacted the Uniting and Strengthening American by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (the USA PATRIOT Act). The USA PATRIOT
Act is designed to deny terrorists and criminals the ability to obtain access to the United States
financial system, and has significant implications for depository institutions, brokers, dealers
and other businesses involved in the transfer of money. The USA PATRIOT Act mandates financial
services companies to implement additional policies and procedures with respect to, or additional
measures designed to address, any or all of the following matters, among others: money laundering,
terrorist financing, identifying and reporting suspicious activities and currency transactions, and
currency crimes.
Sarbanes-Oxley Act
On July 30, 2002, President Bush signed into law The Sarbanes-Oxley Act of 2002. This new
legislation addresses accounting oversight and corporate governance matters, including:
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The creation of a five-member oversight board that will set standards for
accountants and have investigative and disciplinary powers; |
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The prohibition of accounting firms from providing various types of consulting
services to public clients and requiring accounting firms to rotate partners among
public client assignments every five years; |
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Increased penalties for financial crimes; |
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Expanded disclosure of corporate operations and internal controls and certification
of financial statements; |
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Enhanced controls on, and reporting of, insider training; and |
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Prohibition on lending to officers and directors of public companies, although the
Bank may continue to make these loans within the constraints of existing banking
regulations. |
Among other provisions, Section 302(a) of the Sarbanes-Oxley Act requires that our Chief Executive
Officer and Chief Financial Officer certify that our quarterly and annual reports do not contain
any untrue statement or omission of a material fact. Specific requirements of the certifications
include having these officers confirm that they are responsible for establishing, maintaining and
regularly evaluating the effectiveness of our disclosure controls and procedures; they have made
certain disclosures to our auditors and Audit Committee about our internal controls; and they have
included information in our quarterly and annual reports about their evaluation and whether there
have been significant changes in our internal controls or in other factors that could significantly
affect internal controls subsequent to their evaluation.
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In addition, Section 404 of the Sarbanes-Oxley Act and the SECs rules and regulations thereunder
require our management to evaluate, with the participation of our principal executive and principal
financial officers, the effectiveness, as of the end of each fiscal year, of our internal control
over financial reporting. Our management must then provide a report of management on our internal
over financial reporting that contains, among other things, a statement of their responsibility for
establishing and maintaining adequate internal control over financial reporting, and a statement
identifying the framework they used to evaluate the effectiveness of our internal control over
financial reporting.
Additional information pertaining to Supervision and Regulation is contained in Managements
Discussion and Analysis of Financial Condition and Results of Operations under the caption
Capital and Regulatory in the Corporations 2007 Annual Report to Shareholders, and is
incorporated herein by reference.
Monetary Policy
The earnings and business of the Corporation and the Bank depends on interest rate differentials.
In general, the difference between the interest rates paid by the Bank to obtain its deposits and
other borrowings, and the interest rates received by the Bank on loans extended to its customers
and on securities held in the Banks portfolio, comprises the major portion of the Banks earnings.
These rates are highly sensitive to many factors that are beyond the control of the Bank, and
accordingly, its earnings and growth will be subject to the influence of economic conditions,
generally, both domestic and foreign, including inflation, recession, unemployment, and the
monetary policies of the Federal Reserve Board. The Federal Reserve Board implements national
monetary policies designed to curb inflation, combat recession, and promote growth through, among
other means, its open-market dealings in US government securities, by adjusting the required level
of reserves for financial institutions subject to reserve requirements, through adjustments to the
discount rate applicable to borrowings by banks that are members of the Federal Reserve System, and
by adjusting the Federal Funds Rate, the rate charged in the interbank market for purchase of
excess reserve balances. In addition, legislative and economic factors can be expected to have an
ongoing impact on the competitive environment within the financial services industry. The nature
and timing of any future changes in such policies and their impact on the Bank cannot be predicted
with certainty.
Selected Statistical Information
I. Distribution of Assets, Obligations, and Shareholders Equity; Interest Rates and Interest
Differential
The key components of net interest income, the daily average balance sheet for each year -
including the components of earning assets and supporting obligations the related interest income
on a fully tax equivalent basis and interest expense, as well as the average rates earned and paid
on these assets and obligations is contained under the caption Managements Discussion and
Analysis of Financial Condition and Results of Operations in the Corporations 2007 Annual Report
to Shareholders, and is incorporated herein by reference.
An analysis of the changes in net interest income from period-to-period and the relative effect of
the changes in interest income and expense due to changes in the average balances of earning assets
and interest-bearing obligations and changes in interest rates is contained under the
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caption Managements Discussion and Analysis of Financial Condition and Results of Operations in
the Corporations 2007 Annual Report to Shareholders, and is incorporated herein by reference.
II. Investment Portfolio
A. Investment Portfolio Composition
The following table presents the carrying value of investment securities available for sale as of
December 31 (dollars in thousands):
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2007 |
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2006 |
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2005 |
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U.S. Agencies |
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$ |
20,969 |
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$ |
32,176 |
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$ |
30,354 |
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State and political subdivisions |
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628 |
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593 |
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3,856 |
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Corporate securities |
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Mortgage-related securities |
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TOTAL |
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$ |
21,597 |
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$ |
32,769 |
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$ |
34,210 |
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B. Relative Maturities and Weighted Average Interest Rates
The following table presents the maturity schedule of securities held and the weighted average
yield of those securities, as of December 31, 2007 (fully taxable equivalent, dollars in
thousands):
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After one, |
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After five, |
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Weighted |
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In one year |
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but within |
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but within |
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Over |
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Average |
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year or less |
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five years |
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ten years |
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10 years |
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TOTAL |
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Yield (1) |
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U.S. Agencies |
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$ |
18,970 |
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$ |
1,999 |
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$ |
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$ |
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$ |
20,969 |
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4.35 |
% |
State and political subdivisions |
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5 |
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24 |
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599 |
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628 |
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7.98 |
% |
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TOTAL |
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$ |
18,975 |
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$ |
2,023 |
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$ |
599 |
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$ |
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$ |
21,597 |
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Weighted average yield (1) |
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4.38 |
% |
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4.08 |
% |
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8.02 |
% |
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% |
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4.45 |
% |
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(1) |
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Weighted average yield includes the effect of tax-equivalent adjustments using a 34%
tax rate. |
9
III. Loan Portfolio
A. Type of Loans
The following table sets forth the major categories of loans outstanding for each category at
December 31 (dollars in thousands):
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2007 |
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2006 |
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2005 |
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2004 |
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2003 |
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Commercial real estate |
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$ |
171,695 |
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$ |
154,332 |
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$ |
118,637 |
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$ |
105,619 |
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$ |
161,976 |
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Commercial, financial and
agricultural |
|
|
78,192 |
|
|
|
71,385 |
|
|
|
56,686 |
|
|
|
47,446 |
|
|
|
80,988 |
|
One to four family
residential
real estate |
|
|
57,613 |
|
|
|
58,014 |
|
|
|
44,660 |
|
|
|
45,292 |
|
|
|
51,120 |
|
Construction |
|
|
44,042 |
|
|
|
36,009 |
|
|
|
17,503 |
|
|
|
3,096 |
|
|
|
567 |
|
Consumer |
|
|
3,537 |
|
|
|
2,841 |
|
|
|
2,285 |
|
|
|
2,379 |
|
|
|
3,195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
355,079 |
|
|
$ |
322,581 |
|
|
$ |
239,771 |
|
|
$ |
203,832 |
|
|
$ |
297,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B. Maturities and Sensitivities of Loans to Changes in Interest Rates
The following table presents the remaining maturity of total loans outstanding for the categories
shown at December 31, 2007, based on scheduled principal repayments (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, |
|
|
1-4 Family |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
Financial, and |
|
|
Residential |
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
|
Agricultural |
|
|
Real Estate |
|
|
Consumer |
|
|
Construction |
|
|
Total |
|
In one year or less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable interest
rates |
|
$ |
32,269 |
|
|
$ |
41,241 |
|
|
$ |
9,040 |
|
|
$ |
634 |
|
|
$ |
15,419 |
|
|
$ |
98,603 |
|
Fixed interest rates |
|
|
8,084 |
|
|
|
1,571 |
|
|
|
1,931 |
|
|
|
398 |
|
|
|
2,246 |
|
|
|
14,230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After one year but
within five years: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable interest
rates |
|
|
52,111 |
|
|
|
16,409 |
|
|
|
3,504 |
|
|
|
|
|
|
|
12,842 |
|
|
|
84,866 |
|
Fixed interest rates |
|
|
57,342 |
|
|
|
12,297 |
|
|
|
10,476 |
|
|
|
2,237 |
|
|
|
3,851 |
|
|
|
86,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After five years: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable interest
rates |
|
|
17,035 |
|
|
|
1,951 |
|
|
|
26,312 |
|
|
|
|
|
|
|
9,240 |
|
|
|
54,538 |
|
Fixed interest rates |
|
|
4,854 |
|
|
|
4,723 |
|
|
|
6,350 |
|
|
|
268 |
|
|
|
444 |
|
|
|
16,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
171,695 |
|
|
$ |
78,192 |
|
|
$ |
57,613 |
|
|
$ |
3,537 |
|
|
$ |
44,042 |
|
|
$ |
355,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
C. Risk Elements
The following table presents a summary of nonperforming assets and problem loans as of December 31
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
|
2006 |
|
2005 |
|
2004 |
|
2003 |
Nonaccrual loans |
|
$ |
3,298 |
|
|
$ |
2,899 |
|
|
$ |
15 |
|
|
$ |
4,307 |
|
|
$ |
38,660 |
|
|
Interest income that would have been
recorded for nonaccrual loans
under original terms |
|
|
391 |
|
|
|
114 |
|
|
|
134 |
|
|
|
803 |
|
|
|
2,793 |
|
|
Interest income recorded during
period for nonaccrual loans |
|
|
129 |
|
|
|
7 |
|
|
|
78 |
|
|
|
1,053 |
|
|
|
1,307 |
|
|
Accruing loans past due 90 days or more |
|
|
710 |
|
|
|
40 |
|
|
|
99 |
|
|
|
|
|
|
|
241 |
|
|
Restructured loans not included above |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,181 |
|
IV. Summary of Loan Loss Experience
A. Analysis of the Allowance for Loan Losses
Changes in the allowance for loan losses arise from loans charged off, recoveries on loans
previously charged off by loan category, and additions to the allowance for loan losses through
provisions charged to expense. Factors which influence managements judgment in determining the
provision for loan losses include establishing specified loss allowances for selected loans
(including large loans, nonaccrual loans, and problem and delinquent loans) and consideration of
historical loss information and local economic conditions.
11
The following table presents information relative to the allowance for loan losses for the years
ended December 31 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
2003 |
|
Balance of allowance for loan
losses at beginning of period |
|
$ |
5,006 |
|
|
$ |
6,108 |
|
|
$ |
6,966 |
|
|
$ |
22,005 |
|
|
$ |
24,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans charged off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial, financial, and
agricultural |
|
|
1,148 |
|
|
|
199 |
|
|
|
448 |
|
|
|
10,187 |
|
|
|
5,068 |
|
Real estate construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate mortgage |
|
|
89 |
|
|
|
88 |
|
|
|
493 |
|
|
|
3,118 |
|
|
|
1,683 |
|
Consumer |
|
|
73 |
|
|
|
45 |
|
|
|
51 |
|
|
|
2,453 |
|
|
|
205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans charged off |
|
|
1,310 |
|
|
|
332 |
|
|
|
992 |
|
|
|
15,758 |
|
|
|
6,956 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recoveries of loans previously
charged off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commerical, financial, and
agricultural |
|
|
15 |
|
|
|
53 |
|
|
|
102 |
|
|
|
312 |
|
|
|
2,926 |
|
Real estate construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate mortgage |
|
|
|
|
|
|
13 |
|
|
|
23 |
|
|
|
148 |
|
|
|
931 |
|
Consumer |
|
|
35 |
|
|
|
25 |
|
|
|
9 |
|
|
|
259 |
|
|
|
196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recoveries |
|
|
50 |
|
|
|
91 |
|
|
|
134 |
|
|
|
719 |
|
|
|
4,053 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loans charged off |
|
|
1,260 |
|
|
|
241 |
|
|
|
858 |
|
|
|
15,039 |
|
|
|
2,903 |
|
Provisions charged to expense |
|
|
400 |
|
|
|
(861 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
4,146 |
|
|
$ |
5,006 |
|
|
$ |
6,108 |
|
|
$ |
6,966 |
|
|
$ |
22,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans outstanding |
|
|
333,415 |
|
|
|
278,953 |
|
|
|
207,928 |
|
|
|
244,730 |
|
|
|
361,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net charge-offs
during period to average
loans outstanding |
|
|
.38 |
% |
|
|
.08 |
% |
|
|
.41 |
% |
|
|
6.15 |
% |
|
|
.80 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
B. Allocation of Allowance for Loan Losses
The allocation of the allowance for loan losses for the years ended December 31, is shown on the
following table. The percentages shown represent the percent of each loan category to total loans
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
2003 |
|
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
Commercial,
financial and
agricultural |
|
$ |
3,808 |
|
|
|
91.85 |
% |
|
$ |
3,600 |
|
|
|
71.91 |
% |
|
$ |
1,492 |
|
|
|
24.40 |
% |
|
$ |
1,419 |
|
|
|
20.40 |
% |
|
$ |
11,222 |
|
|
|
51.00 |
% |
|
Real estate-construction |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1-4 family residential
real estate |
|
|
22 |
|
|
|
.53 |
% |
|
|
23 |
|
|
|
.46 |
% |
|
|
17 |
|
|
|
.28 |
% |
|
|
97 |
|
|
|
1.40 |
% |
|
|
280 |
|
|
|
1.30 |
% |
|
Consumer |
|
|
20 |
|
|
|
.48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specific reserve on
loans sold subsequent
to year end |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,425 |
|
|
|
33.70 |
% |
|
Unallocated
and general reserves |
|
|
296 |
|
|
|
7.14 |
% |
|
|
1,383 |
|
|
|
27.63 |
% |
|
|
4,599 |
|
|
|
75.30 |
% |
|
|
5,450 |
|
|
|
78.20 |
% |
|
|
3,078 |
|
|
|
14.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
$ |
4,146 |
|
|
|
100.00 |
% |
|
$ |
5,006 |
|
|
|
100.00 |
% |
|
$ |
6,108 |
|
|
|
100.0 |
% |
|
$ |
6,966 |
|
|
|
100.0 |
% |
|
$ |
22,005 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
V. Deposits
Deposit information is contained in Note 11 to the Corporations Consolidated Financial Statements
contained in the Corporations 2007 Annual Report to Shareholders, and is incorporated herein by
reference.
VI. Return on Equity and Assets
Selected financial data of the Corporation is contained in the Corporations 2007 Annual Report to
Shareholders under the caption Selected Financial Data, and is incorporated herein by reference.
See Item 6 of this Form 10-K, Selected Financial Data
VII. Financial Instruments with Off-Balance Sheet Risk
Information relative to commitments, contingencies, and credit risk are discussed in Note 22 to the
Corporations Consolidated Financial Statements contained in the Corporations 2007 Annual Report
to Shareholders and is incorporated herein by reference.
13
ITEM 2. PROPERTIES
The Corporations headquarters are located at 130 South Cedar Street, Manistique, Michigan 49854.
The headquarters location is owned by the Corporation and not subject to any mortgage.
Information regarding specific branch locations is contained in the Corporations 2007 Annual
Report to Shareholders, and is incorporated herein by reference.
All of the branch locations are designed for use and operation as a bank, are well maintained, and
are suitable for current operations. Of the 12 branch locations, 11 are owned and 1 is leased.
ITEM 3. LEGAL PROCEEDINGS
Information regarding legal proceedings is contained in Note 22 of the Corporations 2007 Annual
Report to Shareholders, and is incorporated herein by reference.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Corporation are listed below. The executive officers serve at the
pleasure of the Board of Directors and are appointed by the Board annually. There are no
arrangements or understandings between any officer and any other person pursuant to which the
officer was selected.
|
|
|
|
|
|
|
Name |
|
Age |
|
Position |
Paul D. Tobias
|
|
|
57 |
|
|
Chairman and Chief Executive Officer |
|
|
|
|
|
|
|
Eliot R. Stark
|
|
|
55 |
|
|
Vice Chairman |
|
|
|
|
|
|
|
Kelly W. George
|
|
|
40 |
|
|
President |
|
|
|
|
|
|
|
Ernie R. Krueger
|
|
|
58 |
|
|
Executive Vice President/Chief Financial Officer |
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCK HOLDER MATTERS, AND ISSUER PURCHASES
OF EQUITY
Market information pertaining to the Corporations common stock is contained under the caption
Market Information in the Corporations 2007 Annual Report to Shareholders, and is incorporated
herein by reference.
The holders of the Corporations common stock are entitled to dividends when, and if declared by
the Board of Directors of the Corporation out of funds legally available for that purpose. In
determining dividends, the Board of Directors considers the earnings, capital requirements and
financial condition of the Corporation and its subsidiary bank, along with other relevant factors.
The Corporations principal source of funds for cash dividends is the dividends paid by the Bank.
The ability of the Corporation and the Bank to pay dividends is subject to regulatory restrictions
14
and requirements. The Bank currently has a negative retained earnings position which precludes
payment of dividends. The Bank, in order to pay dividends, would need to seek regulatory approval
for the restatement of its equity to eliminate the negative retained earnings position. There were
no dividends declared or paid in 2005, 2006 and 2007.
ITEM 6. SELECTED FINANCIAL DATA
Selected financial data of the Corporation is contained in the Corporations 2007 Annual Report to
Shareholders, under the caption Selected Financial Data, and is incorporated herein by reference.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Incorporated by reference to the Managements Discussion and Analysis of Financial Condition and
Results of Operations in the Corporations 2007 Annual Report to Shareholders
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Incorporated by reference to the Managements Discussion and Analysis of Financial Condition and
Results of Operations in the Corporations 2007 Annual Report to Shareholders
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference to the Corporations Consolidated Financial Statements for the years
ended December 31, 2007, 2006, and 2005, in the Corporations 2007 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There has been no change in the Corporations independent public accountants since 2002. The
change was reported on Form 8-Ks filed during 2002.
ITEM 9A. CONTROLS AND PROCEDURES
As of December 31, 2007, an evaluation was performed under the supervision of and with the
participation of the Corporations management, including the Chairman and Chief Executive Officer,
and the Chief Financial Officer, of the effectiveness of the design and operation of the
Corporations disclosure controls and procedures. Based on that evaluation, the Corporations
management, including the Chairman and Chief Executive Officer, concluded that the Corporations
disclosure controls and procedures were effective in timely alerting them to material information
relating to the Corporation (including its consolidated subsidiaries) required to be included in
the Corporations periodic SEC filings as of December 31, 2007.
There was no change in the Corporations internal control over financial reporting that occurred
during the Corporations fiscal quarter ended December 31, 2007, that has materially affected, or
is reasonably likely to materially affect, the Corporations internal control over financial
reporting.
15
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE CORPORATION
The information set forth under the captions Information About Directors and Nominees and
Section 16(a) Beneficial Ownership Reporting Compliance in the Corporations definitive Proxy
Statement for its May 28, 2008, Annual Meeting of Shareholders (the Proxy Statement), a copy of
which will be filed with the SEC prior to the meeting date, is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to compensation of the Corporations executive officers and directors is
contained under the captions Remuneration of Directors and Executive Compensation, in the
Corporations Proxy Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information relating to security ownership of certain beneficial owners and management is contained
under the caption Beneficial Ownership of Common Stock in the Corporations Proxy Statement and
is incorporated herein by reference.
The following table provides information as of December 31, 2007, with respect to compensation
plans (including individual compensation arrangements) under which equity securities of the
Corporation are authorized for issuance. All such compensation plans were previously approved by
security holders.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities |
|
|
|
|
|
|
|
|
|
|
|
remaining available |
|
|
|
|
|
|
|
Weighted average |
|
|
for future issuance |
|
|
|
Number of securities to |
|
|
exercise price of |
|
|
under equity |
|
|
|
be issued upon exercise |
|
|
outstanding |
|
|
compensation plans |
|
|
|
of outstanding options, |
|
|
options, warrants |
|
|
(excluding securities |
|
Plan Category |
|
warrants and rights |
|
|
and rights |
|
|
reflected in column (a)) |
|
|
|
( a ) |
|
|
( b ) |
|
|
( c ) |
|
Equity
compensation plans
approved by security holders |
|
|
446,417 |
|
|
$ |
12.29 |
|
|
|
18,488 |
|
|
Equity
compensation plans
not approved by
security holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
446,417 |
|
|
$ |
12.29 |
|
|
|
18,488 |
|
|
|
|
|
|
|
|
|
|
|
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information relating to certain relationships and related transactions is contained under the
caption Indebtedness of and Transactions With Management in the Corporations Proxy Statement and
is incorporated herein by reference.
16
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information relating to principal accountant fees and services is contained under the caption
Principal Accountant Fees and Services in the Corporations Proxy Statement and is incorporated
herein by reference.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a) |
|
The following documents are filed as a part of this report. |
|
1. |
|
Consolidated Financial Statements (contained in the Annual Report attached hereto as
Exhibit 13 and incorporated herein by reference |
|
(i) |
|
Report on Independent Registered Public Accounting Firm |
|
|
(ii) |
|
Consolidated Balance Sheets as of December 31, 2007, and 2006 |
|
|
(iii) |
|
Consolidated Statements of Operations for the years ended
December 31, 2007, 2006, and 2005 |
|
|
(iv) |
|
Consolidated Statements of Changes in Shareholders Equity
for the years ended December 31, 2007, 2006, and 2005 |
|
|
(v) |
|
Consolidated Statements of Cash Flows for the years ended
December 31, 2007, 2006, and 2005 |
|
|
(vi) |
|
Notes to Consolidated Financial Statements |
|
2. |
|
All of the schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are either not required under
the related instruction, the required information is contained elsewhere in the Form
10-K, or the schedules are inapplicable, and therefore have been omitted. |
|
|
3. |
|
Exhibits |
|
|
|
Exhibit |
|
|
Number |
|
Document |
|
|
|
3.1(a)
|
|
Articles of Incorporation, as amended, incorporated by reference
to Exhibit 3.1 to the Corporations Form 10-Q filed November 5,
1999 for the quarter ended September 30, 1999 |
|
|
|
3.1(b)
|
|
Certificate of Amendment to Restated Articles of Incorporation,
incorporated by reference to Exhibit 3.1 to the Corporations Form
8-K filed December 16, 2004 |
17
|
|
|
Exhibit |
|
|
Number |
|
Document |
|
|
|
3.1
|
|
Amended and Restated Bylaws, incorporated by reference to Exhibit
3.1 to the Corporations Form 10-Q filed November 14, 2001 for the
quarter ended September 30, 2001 |
|
|
|
3.2
|
|
Second Amendment to Amended and Restated Bylaws, incorporated by
reference to Exhibit 5.1 to the Corporations Form 8-K filed
December 21,2007 |
|
|
|
3.3
|
|
Amendment to the Amended and Restated Bylaws |
|
|
|
4.1
|
|
Amendment to Rights Agreement between the Corporation and
Registrar and Transfer Company dated August 9, 2004, incorporated
by reference to Exhibit 10.1 to the Corporations Form 8-K filed
August 13, 2004 |
|
|
|
4.2
|
|
Amendment No. 2 to Rights Agreement, incorporated by reference to
Exhibit 4.1 to the Corporations Form 8-K filed December 16, 2004 |
|
|
|
10.1
|
|
Stock Option Agreement dated June 10, 2005, between David C.
Crimmins and Mackinac Financial Corporation incorporated by
reference to Exhibit 10.1 to the Corporations Form 10-K filed
March 31, 2006 |
|
|
|
10.2
|
|
Stock Option Agreement dated June 10, 2005, between Kelly W.
George and Mackinac Financial Corporation incorporated by
reference to Exhibit 10.2 to the Corporations Form 10-K filed
March 31, 2006 |
|
|
|
10.3
|
|
Stock Option Agreement dated June 10, 2005, between Ernie R.
Krueger and Mackinac Financial Corporation incorporated by
reference to Exhibit 10.3 to the Corporations Form 10-K filed
March 31, 2006 |
|
|
|
10.4
|
|
Stock Option Agreement dated September 20, 2005, between Walter J.
Aspatore and Mackinac Financial Corporation incorporated by
reference to Exhibit 10.4 to the Corporations Form 10-K filed
March 31, 2006 |
|
|
|
10.5
|
|
Stock Option Agreement dated September 20, 2005, between Dennis B.
Bittner and Mackinac Financial Corporation incorporated by
reference to Exhibit 10.5 to the Corporations Form 10-K filed
March 31, 2006 |
|
|
|
10.6
|
|
Stock Option Agreement dated September 20, 2005, between Randolph
C. Paschke and Mackinac Financial Corporation incorporated by
reference to Exhibit 10.6 to the Corporations Form 10-K filed
March 31, 2006 |
18
|
|
|
Exhibit |
|
|
Number |
|
Document |
|
|
|
10.7
|
|
Stock Option Agreement dated September 20, 2005, between Robert H.
Orley and Mackinac Financial Corporation incorporated by reference
to Exhibit 10.7 to the Corporations Form 10-K filed March 31,
2006 |
|
|
|
10.8
|
|
Employment agreement dated August 10, 2004, between the
Corporation and C. James Bess, incorporated by reference to
Appendix A to the Corporations Proxy Statement filed October 18,
2004 |
|
|
|
10.9
|
|
Modification of Employment Agreement dated May 2004, between the
Corporation and C. James Bess, incorporated by reference to
Exhibit 10 to the Corporations Form 10-Q/A filed August 10, 2004 |
|
|
|
10.10
|
|
Amendment to Employment Agreement dated September 21, 2004,
between the Corporation and C. James Bess, incorporated by
reference to Exhibit 10.5 to the Corporations Form 10-K filed
March 31, 2005 |
|
|
|
10.11
|
|
First Amendment to Employment Agreement dated December 15, 2004,
between the Corporation and C. James Bess, incorporated by
reference to Exhibit 10.6 to the Corporations Form 10-K filed
March 31, 2005 |
|
|
|
10.12
|
|
Employment Agreement dated August 10, 2004,, between the
Corporation and Paul D. Tobias, incorporated by reference to
Appendix A to the Corporations Proxy Statement filed October 18,
2004 |
|
|
|
10.13
|
|
Employment Agreement dated August 10, 2004 between the Corporation
and Eliot R. Stark, incorporated by reference to Appendix A to the
Corporations Proxy Statement filed October 18, 2004 |
|
|
|
10.14
|
|
Waiver Agreement between each of Paul D. Tobias and Eliot R. Stark
and the Corporation, incorporated by reference to Exhibit 10.1 to
the Corporations Form 8-K filed December 16, 2004 |
|
|
|
10.15
|
|
Employment Agreement dated December 14, 2004, between the
Corporation and Joseph E. Petterson, incorporated by reference to
Exhibit 10.12 to the Corporations Form 10-K for the fiscal year
ended December 31, 1999 and filed March 31, 2005 |
|
|
|
10.16
|
|
Employment agreement dated December 15, 2004, between the
Corporation and Ernie R. Krueger, incorporated by reference to
Exhibit 10.11 to the Corporations Form 10-K filed March 31, 2005 |
19
|
|
|
Exhibit |
|
|
Number |
|
Document |
|
|
|
10.17
|
|
Employment Agreement dated December 14, 2004, between the
Corporation and Kelly W. George, incorporated by reference to
Exhibit 10.12 to the Corporations Form 10-K filed March 31, 2005 |
|
|
|
10.18
|
|
Employment Agreement dated December 15, 2004, between the
Corporation and David C. Crimmins, incorporated by reference to
Exhibit 10.13 to the Corporations Form 10-K filed March 31, 2005 |
|
|
|
10.19
|
|
First Amendment to Employment Agreement dated January 12, 2005
between the Corporation and David Crimmins incorporated by
reference to Exhibit 10.3 of the Corporations Form 10-Q filed
August 15, 2005 for the quarter ended June 30, 2005 |
|
|
|
10.20
|
|
First Amendment to Employment Agreement dated January 12, 2005
between the Corporation and Ernie R. Krueger incorporated by
reference to Exhibit 10.3 of the Corporations Form 10-Q filed
August 15, 2005 for the quarter ended June 30, 2005 |
|
|
|
10.21
|
|
First Amendment to Employment Agreement dated January 12, 2005
between the Corporation and Kelly W. George incorporated by
reference to Exhibit 10.3 of the Corporations Form 10-Q filed
August 15, 2005 for the quarter ended June 30, 2005 |
|
|
|
10.22
|
|
Form of Stock Option Agreement between each of Paul D. Tobias and
Eliot R. Stark and the Corporation, incorporated by reference to
Exhibit 10.2 to the Corporations Form 8-K filed December 16, 2004 |
|
|
|
10.23
|
|
Form of Indemnity Agreement for the Corporations Directors,
incorporated by reference to Exhibit 10.3 to the Corporations
Form 8-K filed December 16, 2004 |
|
|
|
10.24
|
|
Form of Registration Rights Agreement, incorporated by reference
to Exhibit 10.4 to the Corporations Form 8-K filed December 16,
2004 |
|
|
|
10.25
|
|
Stock Option Plan, incorporated by reference to the Corporations
Proxy Statement for its annual meeting of shareholders held April
21, 1994 |
20
|
|
|
Exhibit |
|
|
Number |
|
Document |
|
|
|
10.26
|
|
Deferred Compensation, Deferred Stock, and Current Stock Purchase
Plan for the Corporations Nonemployee Directors, incorporated by
reference to Exhibit 10.2 of the Corporations Annual Report on
Form 10-K for the fiscal year ended December 31, 1999 and filed
March 28, 2000 |
|
|
|
10.27
|
|
North Country Financial Corporation Stock Compensation Plan,
incorporated by reference to Exhibit 10.3 of the Corporations
Annual Report on Form 10-K for the fiscal year ended December 31,
1999 and filed March 28, 2000 |
|
|
|
10.28
|
|
North Country Financial Corporation 1997 Directors Stock Option
Plan, incorporated by reference to Exhibit 10.4 of the
Corporations Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 and filed March 28, 2000 |
|
|
|
10.29
|
|
North Country Financial Corporation 2000 Stock Incentive Plan,
incorporated by reference to Exhibit 10.1 of the Corporations
Form 10-Q filed May 12, 2000 for the quarter ended March 31, 2000 |
|
|
|
10.30
|
|
North Country Financial Corporation Supplemental Executive
Retirement Plan, incorporated by reference to Exhibit 10.6 of the
Corporations Form 10-Q filed November 5, 1999 for the quarter
ended September 30, 1999 |
|
|
|
10.31
|
|
Amended and Restated Employment Agreement dated December 21, 2006,
between the Corporation and Kelly W. George, incorporated by
reference to Exhibit 10.1 to the Corporations Form 8-K filed
January 4, 2007 |
|
|
|
10.32
|
|
Amended and Restated Employment Agreement dated January 31, 2007,
between the Corporation and Ernie R. Krueger, incorporated by
reference to Exhibit 10.1 to the Corporations Form 8-K filed
February 6, 2007 |
|
|
|
10.33
|
|
Agreement dated February 5, 2007 between the Corporation and C.
James Bess, incorporated by reference to Exhibit 10.1 to the
Corporations Form 8-K filed February 8, 2007 |
|
|
|
10.34
|
|
Stock Option Agreement dated December 15, 2006 between the
Corporation and L. Brooks Patterson incorporated by reference to
Exhibit 10.30 of the Corporations Annual Report on Form 10-K for
the fiscal year ended December 31, 2006 and filed March 30, 2007 |
21
|
|
|
Exhibit |
|
|
Number |
|
Document |
|
|
|
10.35
|
|
Stock Option Agreement dated December 15, 2006 between the
Corporation and Kelly W. George incorporated by reference to
Exhibit 10.31 of the Corporations Annual Report on Form 10-K for
the fiscal year ended December 31, 2006 and filed March 30, 2007 |
|
|
|
10.36
|
|
Stock Option Agreement dated December 15, 2006 between the
Corporation and Ernie R. Krueger incorporated by reference to
Exhibit 10.32 of the Corporations Annual Report on Form 10-K for
the fiscal year ended December 31, 2006 and filed March 30, 2007 |
|
|
|
10.37
|
|
Stock Option Agreement dated December 15, 2006 between the
Corporation and David C. Crimmins incorporated by reference to
Exhibit 10.33 of the Corporations Annual Report on Form 10-K for
the fiscal year ended December 31, 2006 and filed March 30, 2007 |
|
|
|
13
|
|
2007 Annual Report to Shareholders. This exhibit, except for
those portions expressly incorporated by reference in this filing,
is furnished for the information of the Securities and Exchange
Commission and is not deemed filed as part of this filing |
|
|
|
21
|
|
Subsidiaries of the Corporation |
|
|
|
23.1
|
|
Consent of Independent Public Accountants Plante & Moran, PLLC |
|
|
|
23.2
|
|
Consent or Independent Public Accountants Plante &
Moran, PLLC |
|
|
|
31
|
|
Rule 13(a) 14 (a) Certifications |
|
|
|
32.1
|
|
Section 1350 Chief Executive Officer Certification |
|
|
|
32.2
|
|
Section 1350 Chief Financial Officer Certification |
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Corporation has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, dated March 31, 2008.
|
|
|
MACKINAC FINANCIAL CORPORATION |
|
|
|
|
|
/s/ Paul D. Tobias |
|
|
|
|
|
Chairman and Chief Executive Officer |
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below on March 31, 2008, by the following persons on behalf of the Corporation and in the
capacities indicated. Each director of the Corporation, whose signature appears below, hereby
appoints Paul D. Tobias and Ernie R. Krueger, and each of them severally, as his attorney-in-fact,
to sign in his name and on his behalf, as a director of the Corporation, and to file with the
Commission any and all Amendments to this Report on Form 10-K.
|
|
|
|
|
Signature |
|
|
|
|
|
/s/ Paul D. Tobias
|
|
/s/ Ernie R. Krueger |
|
|
Paul D. Tobias Chairman,
Chief Executive Officer & Director
(principal executive officer)
|
|
Executive Vice President/Chief Financial
Officer
(chief financial officer)
|
|
|
|
|
|
|
|
/s/ Eliot R. Stark
|
|
/s/ Joseph D. Garea |
|
|
Eliot R. Stark Vice Chairman & Director
|
|
Joseph D. Garea Director
|
|
|
|
|
|
|
|
/s/ Walter J. Aspatore
|
|
/s/ Robert E. Mahaney |
|
|
Walter J. Aspatore Director
|
|
Robert E. Mahaney Director
|
|
|
|
|
|
|
|
/s/ Dennis B. Bittner
|
|
/s/ Robert H. Orley |
|
|
Dennis B. Bittner Director
|
|
Robert H. Orley Director
|
|
|
|
|
|
|
|
/s/ Kelly W. George
|
|
/s/ L. Brooks Patterson |
|
|
Kelly W. George President & Director
|
|
L. Brooks Patterson Director
|
|
|
|
|
|
|
|
|
|
/s/ Randolph C. Paschke |
|
|
|
|
Randolph C Paschke Director
|
|
|
23