First M&F Revises Earnings, Writes Off Goodwill
KOSCIUSKO, Miss., Feb. 3 /PRNewswire-FirstCall/ -- First M&F Corp. (Nasdaq: FMFC) today revised its previously announced preliminary loss for 2009 of $44.048 million attributable to common shareholders, which included $17.047 million in intangible write off, or a negative ($4.86) basic and diluted earnings per share, to a loss of $60.655 million, which includes $33.819 million in intangible write off, or a negative ($6.69) basic and diluted earnings per share. The revision came after the completion of testing of goodwill for impairment which resulted in the write off of the remaining $16.772 million balance of goodwill. The fourth quarter impairment comes after a first quarter write off of $17.047 million in goodwill and other intangibles due to impairment for a total write down in 2009 of $33.819 million. For the year, the Company's operating loss, net of the $33.819 million in impairments, was $27.658 million or negative ($3.05) basic and diluted earnings per share. This loss is compared to earnings of $.522 million, or $0.06 basic and diluted earnings per share for 2008. The goodwill impairment is a non-cash charge to earnings, reducing goodwill and stated equity but has no effect on regulatory capital. The Company remains well-capitalized.
Earnings for the fourth quarter ended December 31, 2009 were revised from a loss of $10.881 million, or negative ($1.20) basic and diluted earnings per share, to a loss of $27.488 million, or negative ($3.03) basic and diluted earnings per share after the goodwill write off. The operating loss for the quarter, excluding the $16.772 million in goodwill write off, was $10.882 million or negative ($1.20) basic and diluted earnings per share. This loss is compared to a loss of $4.300 million, or negative ($.47) basic and diluted earnings per share for the fourth quarter of 2008. The fourth quarter loss was largely due to real estate loan impairments and write downs of other real estate.
The fourth quarter, 2009 fall in First M&F's stock price, the continuing stress on the Company's real estate loan portfolio and general economic conditions were all contributing indicators that goodwill might be impaired. The completion of a December 31 test did find goodwill impaired. Mr. Hugh S. Potts, Jr., Chairman and CEO, commented, "As was the case in the first quarter, the write off of goodwill does not affect cash flow, liquidity or regulatory capital. Neither the strength of the Company nor future prospects is affected at all. The impairment is a non-cash charge but is in keeping with conservative financial principles." Mr. Potts further commented, "Our capital is strong. Our deposits and depositors remain secure. Our outlook for the future is one of enthusiasm and steadfastness." Mr. Potts concluded by saying, "2009 results reflect much progress in getting beyond our real estate-related credit issues and clearing intangible assets from the balance sheet, both of which make future prospects more positive."
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)
December 31 December 31
2009 2008
---- ----
Cash and due from banks 42,446 47,738
Interest bearing bank balances 84,810 6,556
Federal funds sold 70,000 9,350
Securities available for sale
(cost of $280,470 and
$223,882) 284,550 227,145
Loans held for sale 10,266 7,698
Loans 1,058,340 1,176,595
Allowance for loan losses 24,014 24,918
------ ------
Net loans 1,034,326 1,151,677
Bank premises and equipment 42,919 44,642
Accrued interest receivable 7,598 9,832
Other real estate 23,578 11,061
Goodwill - 32,572
Other intangible assets 5,439 7,127
Other assets 57,036 41,467
------ ------
Total assets 1,662,968 1,596,865
Non-interest bearing
deposits 228,579 178,689
Interest bearing deposits 1,159,684 1,082,698
--------- ---------
Total deposits 1,388,263 1,261,387
Federal funds and
repurchase agreements 8,642 9,728
Other borrowings 122,510 151,547
Junior subordinated debt 30,928 30,928
Accrued interest payable 2,933 3,537
Other liabilities 5,062 3,770
----- -----
Total liabilities 1,558,338 1,460,897
Preferred stock, 30,000
shares issued and
outstanding 28,838 -
Common stock, 9,069,346 and
9,063,346 shares issued &
outstanding 45,347 45,317
Additional paid-in capital 31,926 30,447
Nonvested restricted
stock awards 734 780
Retained earnings (2,595) 60,133
Accumulated other
comprehensive income 379 (727)
--- ----
Total First M&F Corp
equity 104,629 135,950
Noncontrolling interests
in subsidiaries 1 18
--- ---
Total equity 104,630 135,968
------- -------
Total liabilities &
equity 1,662,968 1,596,865
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
2009 2008 2009 2008
---- ---- ---- ----
Interest and fees on loans 16,635 19,327 66,782 81,487
Interest on loans held
for sale 86 58 278 299
Taxable investments 2,213 2,130 9,531 9,023
Tax exempt investments 488 557 2,105 2,164
Federal funds sold 34 38 95 182
Interest bearing bank
balances 30 13 42 133
-- -- -- ---
Total interest income 19,486 22,123 78,833 93,288
Interest on deposits 5,452 7,119 23,701 32,255
Interest on fed funds and
repurchase agreements 14 68 97 327
Interest on other borrowings 1,329 1,682 5,449 6,717
Interest on subordinated debt 504 505 1,992 1,993
--- --- ----- -----
Total interest expense 7,299 9,374 31,239 41,292
------ ------ ------ ------
Net interest income 12,187 12,749 47,594 51,996
Provision for possible
loan losses 15,761 10,684 49,601 19,734
------ ------ ------ ------
Net interest income
(expense) after
loan loss (3,574) 2,065 (2,007) 32,262
Service charges on deposits 2,838 2,927 10,976 11,692
Mortgage banking income 395 188 1,823 1,202
Agency commission income 856 934 3,881 4,125
Fiduciary and brokerage income 117 132 489 585
Other income 622 650 3,174 3,521
Other-than-temporary
impairment on securities,
net of $1,503 and $2,715
charged to other
comprehensive income (417) - (829) -
Gains on AFS
securities 14 1 456 6
--- --- --- ---
Total noninterest
income 4,425 4,832 19,970 21,131
Salaries and employee
benefits 6,748 6,761 28,314 28,954
Net occupancy expense 1,306 1,095 4,614 4,210
Equipment expenses 682 923 2,877 3,594
Software and processing
expenses 440 597 1,898 2,072
FDIC insurance assessments 711 325 3,276 575
Foreclosed property expenses 4,493 1,106 7,283 1,913
Goodwill impairment 16,772 - 32,572 -
Intangible asset
amortization and impairment 107 121 1,688 485
Other expenses 3,617 3,313 13,350 12,481
----- ----- ------ ------
Total noninterest
expense 34,876 14,241 95,872 54,284
------- ------ ------- ----
Net income (loss)
before taxes (34,025) (7,344) (77,909) (891)
Income tax expense
(benefit) (6,715) (2,991) (18,104) (1,436)
------ ------ ------- ------
Net income (loss) (27,310) (4,353) (59,805) 545
Net income (loss)
attributable to
noncontrolling interests 1 4 (6) 19
--- --- --- ---
Net income (loss)
attributable to
First M&F Corp (27,311) (4,357) (59,799) 526
======= ====== ======= ===
Earnings Per Common
Share Calculations:
Net income (loss)
attributable to
First M&F Corp (27,311) (4,357) (59,799) 526
Dividends and accretion on
preferred stock 436 - 1,464 -
--- --- ----- ---
Net income (loss)
applicable to
common stock (27,747) (4,357) (61,263) 526
Earnings (loss)
attributable to
participating securities (259) (57) (608) 4
---- --- ---- ---
Net income (loss)
allocated to common
shareholders (27,488) (4,300) (60,655) 522
======= ====== ======= ===
Weighted average
shares (basic) 9,069,346 9,061,862 9,066,880 9,061,730
Weighted average
shares (diluted) 9,069,346 9,061,862 9,066,880 9,062,384
Basic earnings (loss)
per share ($3.03) ($0.47) ($6.69) $0.06
Diluted earnings
(loss) per share ($3.03) ($0.47) ($6.69) $0.06
====== ====== ====== =====
First M&F Corporation
Financial Highlights
QTD Ended QTD Ended QTD Ended QTD Ended
December 31 September 30 June 30 March 31
2009 2009 2009 2009
---- ---- ---- ----
Condensed Income Statements:
(in thousands)
Interest income 19,486 19,926 19,160 20,261
Interest expense 7,299 7,628 7,895 8,417
----- ----- ----- -----
Net interest income 12,187 12,298 11,265 11,844
Provision for loan losses 15,761 4,805 9,195 19,840
Noninterest revenues 4,425 5,381 4,976 5,188
Noninterest expenses 34,876 14,140 15,815 31,041
------ ------ ------ ------
Net income (loss)
before taxes (34,025) (1,266) (8,769) (33,849)
Income tax expense (benefit) (6,715) (1,137) (3,660) (6,592)
Noncontrolling interest 1 7 2 (16)
--- --- --- ---
Net income (loss) (27,311) (136) (5,111) (27,241)
Preferred dividends 436 435 439 154
--- --- --- ---
Net income (loss)
applicable to
common stock (27,747) (571) (5,550) (27,395)
Earnings (loss)
attributable to
participating
securities (259) 9 (52) (306)
---- --- --- ----
Net income (loss)
allocated to common
shareholders (27,488) (580) (5,498) (27,089)
Tax-equivalent net
interest income 12,537 12,670 11,654 12,216
Earnings Excluding Effects
of Intangible Asset
Write Offs: (in thousands)
Net income (loss) (27,311) (136) (5,111) (27,241)
Goodwill impairments 16,772 - - 15,800
Other intangible asset
impairments, net of taxes - - - 781
Intangible asset amortization
that would have been incurred
given no impairment
write-offs, net of tax (9) (9) (9) -
--- --- --- ---
Adjusted net income
(loss) (10,548) (145) (5,120) (10,660)
Preferred dividends 436 435 439 154
--- --- --- ---
Net income (loss)
applicable to
common stock (10,984) (580) (5,559) (10,814)
Earnings (loss)
attributable to
participating
securities (102) 2 (57) (122)
---- --- --- ----
Net income (loss)
allocated to common
shareholders (10,882) (582) (5,502) (10,692)
Weighted average shares
(basic and diluted) 9,069,346 9,069,346 9,065,390 9,063,346
Earnings (loss) per
share (basic and
diluted) (1.20) (0.06) (0.61) (1.18)
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 2009 (27,311) (27,747) (27,488) (3.03)
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) (0.47)
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
SOURCE First M&F Corp.
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