KOSCIUSKO, Miss., Jan. 23, 2012 /PRNewswire/ -- First M&F Corp. (NASDAQ:FMFC) today reported 2011 net income of $4.373 million as compared to a net income of $4.011 million for 2010, a nine percent increase. Earnings allocated to common shareholders were $2.584 million, or $0.28 basic and diluted earnings per share, compared to earnings of $15.071 million, or $1.66 basic and diluted earnings per share for 2010. Earnings attributable to common shareholders for 2010 includes a $12.867 million gain on exchange of preferred stock recorded in the third quarter of 2010. Excluding the gain on exchange, 2010 common earnings were $2.301 million, or $.25 basic and diluted earnings per share.
Net income for the quarter ended December 31, 2011 was $.530 million allocated to common shareholders, or $.05 basic and diluted earnings per share, compared to $.267 million, or $.03 basic and diluted earnings per share for the fourth quarter of 2010.
For the fourth quarter of 2011 the annualized return on assets was 0.25%, while return on common equity was 2.27%. Comparatively, the return on assets for the fourth quarter of 2010 was 0.16%, with a return on common equity of 1.16%. The return on assets for 2011 was 0.27%, while the return on common equity was 2.81%.
"Our credit trends continue to improve, bolstered by eight quarters of post-recession earnings," said Hugh S. Potts, Jr., Chairman and Chief Executive Officer. "Our nonaccrual loans to total loans improved in 2011 to 1.68% from 3.11% in 2010. While our net income overall was up nine percent, cash earnings applicable to common stock, excluding the 2010 gain on exchange of preferred stock, were up thirteen percent year over year," continued Mr. Potts.
Net Interest Income
Net interest income for the quarter was up slightly compared to the fourth quarter of 2010, with the net interest margin increasing to 3.64% in the fourth quarter of 2011 as compared to 3.57% in the fourth quarter of 2010. The significant contributor to the increase in net interest income continues to be the improvement in net interest spreads stemming from lower deposit costs. The net interest margin for the third quarter of 2011 was 3.72% as compared to 3.75% for the second quarter of 2011 and 3.59% for the first quarter of 2011 as the cost of funds trended downward all year. Loan yields decreased to 5.74% in the fourth quarter of 2011 from 5.89% in the fourth quarter of 2010. Loan yields fell slightly from the third quarter of 2011 to the fourth quarter. Average total loans were $1.014 billion for the fourth quarter of 2011 as compared to $1.035 billion for the third quarter of 2011 and $1.048 million during the fourth quarter of 2010. Loans held for investment fell by $18.626 million in the fourth quarter of 2011 and by $29.629 million in the third quarter as loan demand continued to be weak. Deposit costs fell in the fourth quarter of 2011 from the third quarter of 2011 and from the fourth quarter of 2010, as deposits were re-priced downward throughout 2011 in the current stable low-rate environment, continuing a trend beginning in the fourth quarter of 2007. Deposit costs were 1.01% in the fourth quarter of 2011 as compared to 1.49% in the fourth quarter of 2010. Deposits fell by $12.396 million during the fourth quarter of 2011. Management continues to emphasize and focus on core deposit growth by developing and promoting relationship-driven deposit gathering while de-emphasizing non-core deposit funding. Loans held for investment as a percentage of assets were 63.55% at December 31, 2011 as compared to 66.10% at December 31, 2010 and 63.96% at September 30, 2011.
Non-interest Income
Non-interest income, excluding securities transactions and other-than-temporary impairment on securities, for the fourth quarter of 2011 was up by 20.96% compared to the fourth quarter of 2010, with deposit-related income up by 3.73% and mortgage income up 40.77% on higher volumes. Other income was bolstered by a net gain on the sale of branch properties closed under Project McKinley, a cost savings and efficiency initiative in the fourth quarter. Insurance agency commissions fell by 7.64% in a soft insurance market.
Non-interest income, excluding securities transactions and other-than-temporary impairment on securities, was up 4.11% for 2011 versus 2010. Over half of non-interest income is from deposit sources, which was virtually flat year over year. Deposit revenues continue to be supported by debit card fee income, which increased by 17.86% in 2011 over 2010, and overdraft fee income, which, however, decreased by 5.61% for the year. Commission revenues from traditional insurance products were down 4.54% year over year.
Non-interest income includes non-cash other-than-temporary impairment charges of $.631 million in 2011 on pooled trust preferred securities held in the investment portfolio. These charges reflect credit losses expected due to deferrals and defaults by issuing institutions and cash flow analyses.
Non-interest Expenses
Non-interest expenses were up by 3.07% in the fourth quarter of 2011 as compared to the fourth quarter of 2010. Salaries and benefits for the quarter were up slightly compared to the year-ago quarter due to severance costs related to Project McKinley. Most of the increase in other expenses was due to volume-related mortgage expenses.
Non-interest expenses increased by 7.05% for 2011 as compared to 2010. Most of the increase was due to higher foreclosed property expenses in 2011 as non-performing assets shifted more from non-accrual loans to Other Real Estate. The number of full-time equivalent employees at the end of 2011 was 460 as compared to 496 at the end of the third quarter of 2011 and 499 at the end of 2010.
Credit Quality
Annualized net loan charge-offs as a percent of average loans for the fourth quarter of 2011 were 1.37% as compared to 2.41% for the same period in 2010. Non-accrual and 90-day past due loans as a percent of total loans were 1.74% at the end of 2011 as compared to 3.20% at the end of 2010. Annualized net charge-offs as a percentage of average loans for 2011 were 1.05% as compared to 1.65% for 2010. The allowance for loan losses as a percentage of loans was 1.50% at December 31, 2011 as compared to 1.51% at December 31, 2010. The provision for loan losses increased slightly in 2011 from $9.220 million in 2010 to $9.720 million in 2011.
Mr. Potts commented, "Credit metrics improved across the board during 2011 and the fourth quarter as non-performing assets shifted from non-accrual to Other Real Estate. The rate of increase in new credit issues has dropped dramatically as old issues are resolved."
Balance Sheet
Total assets fell by 2.26% in 2011, to $1.568 billion from $1.604 billion. Total equity grew to $111.041 million, a 3.71% increase from 2010. Total loans held for investment were $.996 billion compared to $1.060 billion at the end of 2010. Deposits were $1.371 billion compared to $1.375 billion at the end of 2010. Book value per common share increased to $10.21 per share at the end of 2011, a 2.51% increase from 2010. "While loan demand has been tepid at best and loan volumes have fallen, newer channels of growth are beginning to gain traction," said Mr. Potts. Mr. Potts continued, "Present demands are such that an aggressive growth strategy looks more likely in 2013 and 2014, although we do expect some growth this year."
Growth and Branch Rationalization
In the first quarter of 2010 the Company closed two branches in Shelby County, Tennessee and one branch in Shelby County, Alabama. Under Project McKinley, the Company closed five branches, two in metro-Jackson, MS, one in Oxford MS, one in Tupelo, MS and one in its Shelby County, Alabama market in the fourth quarter of 2011. These closures were designed to improve the Company's efficiencies and cost structure without exiting any markets.
Conclusion
"We are convinced," stated Mr. Potts, "that we are on the right track. We have addressed organizational structure, overhead, net interest margin, credit concentrations, classified and non-performing assets while still remaining profitable. We expect 2012 to reflect a continuation of these trends while the Company strives to accelerate progress."
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 Forward?Looking Statements
This document includes certain "forward?looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market and regulatory factors. More detailed information about those factors is contained in First M&F Corporation's filings with the Securities and Exchange Commission.
First M&F Corporation Condensed Consolidated Statements of Condition (Unaudited) (In thousands, except share data) December 31 December 31 2011 2010 ---- ---- Cash and due from banks $39,976 $45,099 Interest bearing bank balances 39,391 72,103 Federal funds sold 25,000 25,000 Securities available for sale (cost of $315,890 and $274,421) 320,774 276,929 Loans held for sale 26,073 6,242 Loans 996,340 1,060,146 Allowance for loan losses 14,953 16,025 ------ ------ Net loans 981,387 1,044,121 Bank premises and equipment 37,989 40,696 Accrued interest receivable 6,122 6,380 Other real estate 36,952 31,125 Other intangible assets 4,586 5,013 Other assets 49,541 51,256 ------ ------ Total assets $1,567,791 $1,603,964 ========== ========== Non-interest bearing deposits $231,718 $212,199 Interest bearing deposits 1,139,745 1,163,213 --------- --------- Total deposits 1,371,463 1,375,412 Federal funds and repurchase agreements 4,398 33,481 Other borrowings 43,001 50,416 Junior subordinated debt 30,928 30,928 Accrued interest payable 1,023 1,470 Other liabilities 5,937 5,192 ----- ----- Total liabilities 1,456,750 1,496,899 Preferred stock, 30,000 shares issued and outstanding 17,564 16,390 Common stock, 9,154,936 and 9,106,803 shares issued & outstanding 45,775 45,534 Additional paid-in capital 31,895 31,883 Nonvested restricted stock awards 674 784 Retained earnings 14,456 12,225 Accumulated other comprehensive income (Note 1) 677 249 --- --- Total First M&F Corp equity 111,041 107,065 Noncontrolling interests in subsidiaries - - --- --- Total equity 111,041 107,065 ------- ------- Total liabilities & equity $1,567,791 $1,603,964 ========== ==========
First M&F Corporation and Subsidiary Condensed Consolidated Statements of Income (Unaudited) (In thousands, except share data) Three Months Ended Twelve Months Ended December 31 December 31 2011 2010 2011 2010 ---- ---- ---- ---- Interest and fees on loans $14,482 $15,463 $60,201 $62,070 Interest on loans held for sale 154 62 275 232 Taxable investments 1,297 1,676 6,745 7,616 Tax exempt investments 318 353 1,252 1,549 Federal funds sold 16 15 63 82 Interest bearing bank balances 38 34 179 143 --- --- --- --- Total interest income 16,305 17,603 68,715 71,692 Interest on deposits 2,897 4,177 13,501 18,809 Interest on fed funds and repurchase agreements 6 17 36 66 Interest on other borrowings 467 536 1,979 3,024 Interest on subordinated debt 292 505 1,335 1,992 --- --- ----- ----- Total interest expense 3,662 5,235 16,851 23,891 Net interest income 12,643 12,368 51,864 47,801 Provision for possible loan losses 2,280 2,280 9,720 9,220 ----- ----- ----- ----- Net interest income after loan loss 10,363 10,088 42,144 38,581 Service charges on deposits 2,641 2,546 10,293 10,221 Mortgage banking income 618 439 1,821 1,581 Agency commission income 798 864 3,636 3,809 Fiduciary and brokerage income 153 120 584 526 Other income 1,133 448 3,102 2,532 Other-than-temporary impairment on securities, net of $49, $0, $263 and $32 recognized in other comprehensive income (50) - (631) (403) Gains on AFS securities 619 539 2,769 2,255 --- --- ----- ----- Total noninterest income 5,912 4,956 21,574 20,521 Salaries and employee benefits 6,899 6,732 28,469 27,303 Net occupancy expense 1,003 968 3,935 3,937 Equipment expenses 479 523 1,871 2,382 Software and processing expenses 378 400 1,540 1,627 FDIC insurance assessments 530 768 2,426 3,261 Foreclosed property expenses 2,047 1,905 7,351 2,946 Intangible asset amortization and impairment 107 106 427 426 Other expenses 3,634 3,226 12,315 12,608 ----- ----- ------ ------ Total noninterest expense 15,077 14,628 58,334 54,490 Net income before taxes 1,198 416 5,384 4,612 Income tax expense (benefit) 211 (226) 1,011 602 --- ---- ----- --- Net income 987 642 4,373 4,010 Net income (loss) attributable to noncontrolling interests - 1 - (1) --- --- --- --- Net income attributable to First M&F Corp $987 $641 $4,373 $4,011 ==== ==== ====== ====== Earnings Per Common Share Calculations: Net income attributable to First M&F Corp $987 $641 $4,373 $4,011 Dividends and accretion on preferred stock (454) (375) (1,774) (1,692) Gain on exchange of preferred stock (Note 2) - - - 12,867 --- --- --- ------ Net income applicable to common stock 533 266 2,599 15,186 Earnings (loss) attributable to participating securities 3 (1) 15 115 Net income allocated to common shareholders $530 $267 $2,584 $15,071 ==== ==== ====== ======= Weighted average shares (basic) 9,145,108 9,099,883 9,126,605 9,081,687 Weighted average shares (diluted) 9,145,108 9,099,883 9,126,605 9,081,687 Basic earnings per share $0.05 $0.03 $0.28 $1.66 Diluted earnings per share $0.05 $0.03 $0.28 $1.66 ===== ===== ===== =====
First M&F Corporation Financial Highlights YTD Ended YTD Ended December 31 December 31 2011 2010 ---- ---- Performance Ratios: Return on assets (annualized) 0.27% 0.25% Return on equity (annualized) (a) 4.00% 3.74% Return on common equity (annualized) (a) 2.81% 2.87% Efficiency ratio (c) 78.47% 78.47% Net interest margin (annualized, tax- equivalent) 3.68% 3.43% Net charge-offs to average loans (annualized) 1.05% 1.65% Nonaccrual loans to total loans 1.68% 3.11% 90 day accruing loans to total loans 0.06% 0.09% QTD Ended QTD Ended QTD Ended QTD Ended December 31 September 30 June 30 March 31 2011 2011 2011 2011 ---- ---- ---- ---- Per Common Share (diluted): Net income $0.05 $0.10 $0.07 $0.06 Cash dividends paid 0.01 0.01 0.01 0.01 Book value 10.21 10.23 10.20 9.98 Closing stock price 2.84 3.16 3.78 4.08 Loan Portfolio Composition: (in thousands) Commercial, financial and agricultural $155,330 $143,133 $152,063 $137,620 Non-residential real estate 574,505 603,904 621,546 642,372 Residential real estate 186,815 185,564 187,932 189,290 Home equity loans 37,024 38,320 38,891 38,622 Consumer loans 42,666 44,045 44,163 43,357 ------ ------ ------ ------ Total loans $996,340 $1,014,966 $1,044,595 $1,051,261 Deposit Composition: (in thousands) Noninterest-bearing deposits $231,718 $222,042 $243,626 $208,457 NOW deposits 390,256 378,409 397,281 411,898 MMDA deposits 197,849 179,138 174,127 161,959 Savings deposits 119,693 118,814 117,830 116,714 Core certificates of deposit under $100,000 225,777 250,130 255,847 261,087 Core certificates of deposit $100,000 and over 187,513 216,655 217,540 222,617 Brokered certificates of deposit under $100,000 5,629 4,686 4,611 2,880 Brokered certificates of deposit $100,000 and over 13,028 13,985 13,637 14,464 ------ ------ ------ ------ Total deposits $1,371,463 $1,383,859 $1,424,499 $1,400,076 Nonperforming Assets: (in thousands) Nonaccrual loans $17,177 $26,622 $32,800 $37,407 Other real estate 36,952 32,722 30,650 29,660 Investment securities 599 509 693 639 --- --- --- --- Total nonperforming assets $54,728 $59,853 $64,143 $67,706 Accruing loans past due 90 days or more $602 $252 $784 $338 Restructured loans (accruing) $19,662 $19,712 $22,988 $16,320 Total nonaccrual loan to loans 1.68% 2.59% 3.13% 3.55% Total nonperforming credit assets to loans and ORE 5.11% 5.60% 5.89% 6.19% Total nonperforming assets to assets ratio 3.49% 3.77% 3.95% 4.21% Allowance For Loan Loss Activity: (in thousands) Beginning balance $16,111 $18,805 $17,043 $16,025 Provision for loan loss 2,280 2,580 2,280 2,580 Charge-offs (4,001) (5,419) (1,442) (2,147) Recoveries 563 145 924 585 --- --- --- --- Ending balance $14,953 $16,111 $18,805 $17,043
First M&F Corporation Financial Highlights QTD Ended QTD Ended QTD Ended QTD Ended December 31 September 30 June 30 March 31 2011 2011 2011 2011 ---- ---- ---- ---- Condensed Income Statements: (in thousands) Interest income $16,305 $17,239 $17,602 $17,569 Interest expense 3,662 4,014 4,331 4,844 ----- ----- ----- ----- Net interest income 12,643 13,225 13,271 12,725 Provision for loan losses 2,280 2,580 2,280 2,580 Noninterest revenues 5,912 5,219 4,712 5,731 Noninterest expenses 15,077 14,143 14,303 14,811 ------ ------ ------ ------ Net income before taxes 1,198 1,721 1,400 1,065 Income tax expense 211 391 294 115 Noncontrolling interest - - - - --- --- --- --- Net income $987 $1,330 $1,106 $950 Preferred dividends (454) (448) (440) (432) Gain on exchange of preferred stock - - - - --- --- --- --- Net income applicable to common stock 533 882 666 518 Earnings attributable to participating securities 3 4 5 3 --- --- --- --- Net income allocated to common shareholders $530 $878 $661 $515 Tax-equivalent net interest income $12,865 $13,449 $13,495 $12,955 Selected Average Balances: (in thousands) Assets $1,564,531 $1,592,030 $1,598,871 $1,622,363 Loans held for investment 993,869 1,028,372 1,050,136 1,056,903 Earning assets 1,401,948 1,433,189 1,444,677 1,463,032 Deposits 1,366,628 1,390,835 1,396,331 1,403,733 Equity 110,483 110,412 108,911 107,633 Common equity 93,077 93,307 92,096 91,102 Selected Ratios: Return on average assets (annualized) 0.25% 0.33% 0.28% 0.24% Return on average equity (annualized) (a) 3.54% 4.78% 4.07% 3.58% Return on average common equity (annualized) (a) 2.27% 3.76% 2.90% 2.31% Average equity to average assets 7.06% 6.94% 6.81% 6.63% Tangible equity to tangible assets (b) 6.81% 6.71% 6.50% 6.41% Tangible common equity to tangible assets (b) 5.69% 5.61% 5.46% 5.37% Net interest margin (annualized, tax- equivalent) 3.64% 3.72% 3.75% 3.59% Efficiency ratio (c) 80.29% 75.76% 78.56% 79.26% Net charge-offs to average loans (annualized) 1.37% 2.03% 0.20% 0.60% Nonaccrual loans to total loans 1.68% 2.59% 3.13% 3.55% 90 day accruing loans to total loans 0.06% 0.02% 0.07% 0.03% Price to book 0.28x 0.31x 0.37x 0.41x Price to earnings 14.20x 7.90x 13.50x 17.00x
First M&F Corporation Financial Highlights Historical Earnings Trends: Earnings Earnings Applicable to Allocated to Common Common Earnings Stock Shareholders EPS (in thousands) (in thousands) (in thousands) (diluted) ------------- ------------- ------------- -------- 4Q 2011 $987 $533 $530 $0.05 3Q 2011 1,330 882 878 0.10 2Q 2011 1,106 666 661 0.07 1Q 2011 950 518 515 0.06 4Q 2010 641 266 267 0.03 3Q 2010 1,245 13,671 13,565 1.49 2Q 2010 1,272 833 826 0.09 1Q 2010 853 416 413 0.05 4Q 2009 (27,311) (27,747) (27,488) (3.03) Revenue Statistics: Non-interest Non-interest Revenues Revenues to Revenues to Per FTE Ttl. Revenues Avg. Assets (thousands) (percent) (percent) ---------- -------- -------- 4Q 2011 $39.0 31.48% 1.50% 3Q 2011 36.6 27.96% 1.30% 2Q 2011 36.6 25.88% 1.18% 1Q 2011 37.9 30.67% 1.43% 4Q 2010 35.4 28.19% 1.25% 3Q 2010 34.9 27.42% 1.21% 2Q 2010 35.1 29.98% 1.31% 1Q 2010 34.4 32.66% 1.39% 4Q 2009 32.8 26.09% 1.05% Expense Statistics: Non-interest Expense to Efficiency Avg. Assets Ratio (percent) (percent) (c) -------- ------------- 4Q 2011 3.82% 80.29% 3Q 2011 3.52% 75.76% 2Q 2011 3.59% 78.56% 1Q 2011 3.70% 79.26% 4Q 2010 3.69% 83.22% 3Q 2010 3.35% 75.75% 2Q 2010 3.35% 76.69% 1Q 2010 3.32% 78.16% 4Q 2009 8.25% 106.73% First M&F Corporation Average Balance Sheets/Yields and Costs (tax- equivalent) (In thousands with yields and costs annualized) QTD December 2011 QTD December 2010 ----------------- ----------------- Average Average Balance Yield/Cost Balance Yield/Cost ------- ---------- ------- ---------- Interest bearing bank balances $44,653 0.33% $65,302 0.21% Federal funds sold 25,000 0.25% 25,000 0.25% Taxable investments (amortized cost) 283,986 1.81% 228,935 2.91% Tax-exempt investments (amortized cost) 33,923 5.94% 37,525 5.95% Loans held for sale 20,517 2.98% 6,551 3.75% Loans held for investment 993,869 5.79% 1,041,453 5.91% ------- ---- --------- ---- Total earning assets 1,401,948 4.68% 1,404,766 5.04% Non-earning assets 162,583 169,660 ------- ------- Total average assets $1,564,531 $1,574,426 NOW $369,789 0.47% $319,309 1.02% MMDA 186,898 0.62% 167,154 1.14% Savings 118,833 1.05% 115,806 1.26% Certificates of Deposit 459,182 1.60% 512,012 1.95% Short-term borrowings 4,809 0.53% 34,194 0.20% Other borrowings 74,431 4.04% 80,946 5.10% ------ ---- ------ ---- Total interest bearing liabilities 1,213,942 1.20% 1,229,421 1.69% Non-interest bearing deposits 231,926 227,457 Non-interest bearing liabilities 8,180 8,438 Preferred equity 17,406 18,498 Common equity 93,077 90,612 ------ ------ Total average liabilities and equity $1,564,531 $1,574,426 Net interest spread 3.48% 3.35% Effect of non- interest bearing deposits 0.19% 0.26% Effect of leverage -0.03% -0.04% ----- ----- Net interest margin, tax- equivalent 3.64% 3.57% Less tax equivalent adjustment: Investments 0.05% 0.06% Loans 0.01% 0.02% ---- ---- Reported book net interest margin 3.58% 3.49% First M&F Corporation Average Balance Sheets/Yields and Costs (tax- equivalent) (In thousands with yields and costs annualized) YTD December 2011 YTD December 2010 ----------------- ----------------- Average Average Balance Yield/Cost Balance Yield/Cost ------- ---------- ------- ---------- Interest bearing bank balances $70,998 0.25% $60,894 0.23% Federal funds sold 25,000 0.25% 35,642 0.23% Taxable investments (amortized cost) 265,446 2.54% 236,046 3.23% Tax-exempt investments (amortized cost) 33,390 5.98% 41,347 5.97% Loans held for sale 8,566 3.21% 7,416 3.13% Loans held for investment 1,032,137 5.85% 1,045,467 5.96% --------- ---- --------- ---- Total earning assets 1,435,537 4.85% 1,426,812 5.11% Non-earning assets 158,747 164,130 ------- ------- Total average assets $1,594,284 $1,590,942 NOW $389,052 0.63% $321,036 1.05% MMDA 172,978 0.72% 151,974 1.12% Savings 117,686 1.12% 114,358 1.28% Certificates of Deposit 489,199 1.73% 544,192 2.26% Short-term borrowings 10,855 0.33% 19,112 0.35% Other borrowings 76,923 4.31% 102,112 4.91% ------ ---- ------- ---- Total interest bearing liabilities 1,256,693 1.34% 1,252,784 1.91% Non-interest bearing deposits 220,370 222,083 Non-interest bearing liabilities 7,851 8,909 Preferred equity 16,967 26,300 Common equity 92,403 80,866 ------ ------ Total average liabilities and equity $1,594,284 $1,590,942 Net interest spread 3.51% 3.20% Effect of non- interest bearing deposits 0.20% 0.29% Effect of leverage -0.03% -0.06% ----- ----- Net interest margin, tax- equivalent 3.38% 3.43% Less tax equivalent adjustment: Investments 0.05% 0.06% Loans 0.02% 0.02% ---- ---- Reported book net interest margin 3.61% 3.35%
First M&F Corporation Notes to Financial Schedules (a) Return on equity is calculated as: (Net income attributable to First M&F Corp) divided by (Total equity) Return on common equity is calculated as: (Net income attributable to First M&F Corp minus preferred dividends) divided by (Total First M&F Corp equity minus preferred stock) (b) Tangible equity to tangible assets is calculated as: (Total equity minus goodwill and other intangible assets) divided by (Total assets minus goodwill and other intangible assets) Tangible common equity to tangible assets is calculated as: (Total First M&F Corp equity minus preferred stock minus goodwill and other intangible assets) divided by (Total assets minus goodwill and other intangible assets) (c) Efficiency ratio is calculated as: (Noninterest expense) divided by (Tax-equivalent net interest income plus noninterest revenues) Note 1: Other comprehensive income does not include year-end actuarial adjustments for the Company's defined benefit pension plan. When the calculations have been completed, an adjustment will be made to the pension liability, deferred tax assets and other comprehensive income. Note 2: On September 29, 2010 the Company issued 30,000 shares of Class B, Series CD, par value $1,000 preferred stock to the U.S. Treasury to acquire its 30,000 shares outstanding of Class B, Series A, par value $1,000 preferred stock. The Series CD preferred stock issued has a dividend rate of 2.00%. The estimated fair value of the Series CD preferred stock as of September 29, 2010 was $16,159,000. The Series A preferred stock carried a dividend rate of 5.00% and had a book value of $29,026,000 as of September 29, 2010. The acquisition of the Series A shares in exchange for the Series CD shares resulted in a gain of $12,867,000 which was recorded as a credit to retained earnings.
SOURCE First M&F Corp.