MANISTIQUE, Mich., April 16 /PRNewswire-FirstCall/ --
North Country Financial Corporation (Nasdaq: NCFC), the holding company for
North Country Bank and Trust, has reported a net loss of $26.7 million, or
$3.81 per share, for the year ended December 31, 2002, compared to net income
of $5.8 million, or $.82 per share, for 2001.
For the fourth quarter of 2002, the net loss was $18.1 million, or $2.59
per share, and for the quarter ended December 31, 2001, net income was
$673,000, or $.09 per share.
The losses resulted from a sizable provision for loan loss recorded of
$26.7 million in 2002 due to a substantial increase in non-performing loans to
$27.2 million. The allowance for loan losses totaled $24.9 million at
December 31, 2002, which represent 5.7% of total loans.
"The year has been an extremely difficult one financially for the
corporation," commented Sherry Littlejohn, President and C.E.O. "We are
proceeding with rigorous collection efforts on non-performing and charged-off
loans."
Effective April 5, 2003, the FDIC and the Michigan Office of Financial and
Insurance Services, with the consent of the Bank, entered a formal Cease and
Desist Order. The Order identifies deficiencies in the Bank's policies and
procedures for safe and sound operation, including its directorate and
management personnel and practices, credit underwriting, credit
administration, and policies regarding asset/liability management, liquidity,
funds management and investment, and its compliance with applicable laws and
regulations. The Order requires the Bank to take a series of corrective
actions within time periods specified in the Order, and to maintain capital
ratios at levels set forth in the Order, or take action to restore such ratios
within 60 days. The Bank's regulatory capital ratios currently do not satisfy
the requirements of the Order. On April 11, 2003, North Country Financial
Corporation filed a copy of the Order with a current report on Form 8-K that
it filed with the SEC.
Littlejohn stated, "Management and the Board of Directors are diligently
working to address and comply with the issues cited in the Order and are
developing new strategic, financial, and operating plans to address the
regulatory issues the Bank faces and to help achieve profitability and
increase shareholder value."
Total deposits decreased $45 million or 9.3% to $437.5 million at
December 31, 2002, and total loans declined $69.4 million or 13.8% to $435
million as of the end of the year. Shareholders' equity decreased $27.4
million to $20.5 million at December 31, 2002.
Headquartered in Manistique, Michigan, North Country Financial Corporation
is a financial services company providing a full range of commercial,
consumer, and mortgage banking services to a client base throughout northern
Michigan. North Country Bank and Trust, its primary subsidiary, currently has
26 branch locations conveniently located throughout Michigan's Upper Peninsula
and northern Lower Michigan.
North Country Financial Corporation
Consolidated Balance Sheets
December 31, December 31,
(In thousands) 2002 2001
ASSETS
Cash and due from banks $17,542 $25,163
Federal funds sold 26,250 10,700
Total cash and cash equivalents 43,792 35,863
Interest-bearing deposits in other
financial institutions 2,010 1,518
Securities available for sale 67,955 61,885
Federal Home Loan Bank stock 4,375 4,375
Loans 435,043 504,412
Allowance for loan losses (24,908) (10,444)
Net loans 410,135 493,968
Premises and equipment 15,592 18,637
Other real estate held for sale 5,409 4,211
Other assets 16,038 16,172
TOTAL ASSETS $565,306 $636,629
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing deposits $40,797 $46,342
Interest-bearing deposits 396,697 436,182
Total deposits 437,494 482,524
Borrowings 87,815 88,549
Other liabilities 7,044 5,217
Guaranteed preferred beneficial
interests in the Corporation's
subordinated debentures 12,450 12,450
SHAREHOLDERS' EQUITY
Preferred stock - no par value,
500,000 shares authorized,
no shares outstanding -- --
Common stock - no par value,
18,000,000 shares authorized;
7,019,152, issued and
outstanding 16,175 16,175
Retained earnings 3,086 31,554
Accumulated other comprehensive
income 1,242 160
TOTAL SHAREHOLDERS' EQUITY 20,503 47,889
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $565,306 $636,629
North Country Financial Corporation
Consolidated Statements of Operations
Quarter Ended Year to Date
December 31, December 31,
(In thousands, except per share 2002 2001 2002 2001
information)
Interest income:
Interest and fees on loans:
Taxable $6,416 $8,622 $29,615 $41,178
Tax-exempt 521 646 2,256 3,405
Interest on securities:
Taxable 579 911 3,360 4,725
Tax-exempt 66 79 266 327
Other interest income 328 380 472 840
Total interest income 7,910 10,638 35,969 50,475
Interest expense:
Deposits 2,918 3,912 12,444 21,205
Borrowings 1,269 1,234 5,100 4,814
Subordinated debentures 131 143 545 823
Total interest expense 4,318 5,289 18,089 26,842
Net interest income 3,592 5,349 17,880 23,633
Provision for loan losses 9,607 1,300 26,658 3,200
Net interest income (loss) after
provision for loan losses (6,015) 4,049 (8,778) 20,433
Other income:
Service fees 504 462 1,899 1,851
Net securities gains 77 560 746 1,073
Net gains on sale of loans 59 170 506 549
Gain on sale of branches 464 885 464 1,386
Other loan and lease income 217 227 1,095 5,540
Other 31 (81) 548 37
Total other income 1,352 2,223 5,258 10,436
Other expenses:
Salaries, commissions,
and related benefits 1,911 2,266 7,589 11,882
Occupancy and equipment
expense 755 892 3,066 3,393
Impairment loss on intangible
and other real estate
assets 6,065 0 6,065 0
Other 2,955 2,353 10,343 9,032
Total other expense 11,686 5,511 27,063 24,307
Income (loss) before income
tax (16,349) 761 (30,583) 6,562
Provision (credit) for income
tax 1,778 88 (3,870) 788
Net income (loss) $(18,127) $673 $(26,713) $5,774
Earnings (loss) per share:
Basic $(2.59) $0.09 $(3.81) $0.82
Diluted $(2.59) $0.09 $(3.81) $0.82
Dividends declared per
common share $0.00 $0.00 $0.25 $0.30
SOURCE North Country Financial Corporation
back to top
