NEW BERLIN, Wis., Aug. 14 /PRNewswire-FirstCall/ — Merchants & Manufacturers Bancorporation, Inc. (“Merchants”) (BULLETIN BOARD: MMBI) announced net income of $920,000, or $0.25 per diluted share, for the three months ended June 30, 2007 compared to $1.4 million, or $0.37 per diluted share, for the three months ended June 30, 2006, representing a 32.7% decrease in net income and a 32.4% decrease per diluted share. For the six months ended June 30, 2007, the Corporation had net income of $2.2 million, or $0.60 per diluted share, compared to $2.4 million, or $0.65 per diluted share, for the six months ending June 30, 2006, representing an 8.2% decrease in net income and a 7.7% decrease in diluted earnings per share.
Net income from continuing operations was $611,000, or $0.17 per diluted share, for the three months ended June 30, 2007 compared to $1.2 million, or $0.31 per diluted share, for the three months ended June 30, 2006, representing a 47.3% decrease in net income and a 45.2% decrease per diluted share. For the six months ended June 30, 2007, the Corporation had net income from continuing operations of $1.7 million, or $0.46 per diluted share, compared to $2.0 million, or $0.55 per diluted share, for the six months ending June 30, 2006, representing a 17.4% decrease in net income and a
16.4% decrease in diluted earnings per share.
Net income from discontinued operations was $309,000, or $0.08 per diluted share, for the three months ended June 30, 2007 compared to $207,000, or $0.06 per diluted share, for the three months ended June 30, 2006, representing a 49.3% increase in net income and a 33.3% increase per diluted share. For the six months ended June 30, 2007, the Corporation had net income from discontinued operations of $508,000, or $0.14 per diluted share, compared to $350,000, or $0.10 per diluted share, for the six months ending June 30, 2006, representing a 45.1% increase in net income and a 40.0% increase in diluted earnings per share.
The decrease in earnings for the three and six months ended June 30, 2007 compared to the same periods in 2006 is attributable to a decrease in net interest income partially offset by an increase in noninterest income and a decrease in noninterest expense. Earnings were also negatively affected by a decline in the net interest margin to 3.22% for the six months ended June 30, 2007 compared to 3.38% for the same period in the prior year. The decrease in our net interest margin is due to an increased cost of funds as a result of growth in relatively high cost deposits as well as additional competitive pressure on loan pricing which has made it difficult to increase loan volume.
Total assets decreased $38.8 million, or 2.6%, to $1.47 billion at June 30, 2007 compared to $1.51 billion at December 31, 2006. The decline in assets can be primarily attributed to a decrease in loans and investment securities partially offset by an increase in cash and cash equivalents due to the sale of Fortress Bank Minnesota.
On June 7, 2007, the Corporation closed on the sale of substantially all of the assets of Fortress Bank Minnesota to Eastwood Bank. Eastwood Bank purchased $23.0 million in loans, $41.3 million in deposits and $1.0 million of fixed assets. Total net income after tax from Fortress Bank Minnesota included in discontinued operations, was $164,000, or $0.04 per diluted share, for the three months ended June 30, 2007 compared to $81,000, or $0.02 per diluted share, for the three months ended June 30, 2006. For the six months ended June 30, 2007, Fortress Bank Minnesota had net income of $239,000, or $0.07 per diluted share, compared to $132,000, or $0.04 per diluted share, for the six months ending June 30, 2006.
In addition, we were engaged in negotiations to sell Fortress Bank of Cresco during the second quarter, and subsequently entered into a definitive agreement to sell Fortress Bank of Cresco to Security Agency, Incorporated on July 13, 2007. As a result, the assets and liabilities of Fortress Bank of Cresco have been classified as held for sale in the accompanying balance sheets with the related operations reported in discontinued operations. Thus, total assets and liabilities held for sale were $81.1 million and 71.5 million, respectively, as of June 30, 2007. Total net income after tax from Fortress Bank of Cresco included in discontinued operations, was $145,000 or $0.04 per diluted share, for the three months ended June 30, 2007 compared to $126,000, or $0.04 per diluted share, for the three months ended June 30, 2006. For the six months ended June 30, 2007, Fortress Bank of Cresco had net income of $269,000, or $0.07 per diluted share, compared to $218,000, or $0.06 per diluted share, for the six months ending June 30, 2006.
Merchants & Manufacturers Bancorporation, Inc. is a financial holding company headquartered in New Berlin, Wisconsin, a suburb of Milwaukee. Through our Community Financial Group network, we operate six banks in Wisconsin (Community Bank Financial, Fortress Bank, Grafton State Bank, Lincoln State Bank, The Reedsburg Bank and Wisconsin State Bank) and one bank in Iowa (Fortress Bank of Cresco). Our banks are separately chartered with each having its own name, management team, board of directors and community commitment. Together, our banks operate 50 offices in the communities they serve with more than 100,000 clients and total assets of $1.5 billion. In addition to traditional banking services, our Community Financial Group network also provides our clients with a full range of financial services including investment and insurance products, residential mortgage services, private banking capabilities and tax consultation and tax preparation services. Merchants’ shares trade on the Over-the-Counter Bulletin Board under the symbol “MMBI”.
Certain statements contained in this press release constitute or may constitute forward-looking statements about Merchants which we believe are covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
This release contains forward-looking statements concerning the Corporation’s prospects that are based on the current expectations and beliefs of management. When used in written documents, the words anticipate, believe, estimate, expect, objective and similar expressions are intended to identify forward-looking statements. The statements contained herein and such future statements involve or may involve certain assumptions, risks and uncertainties, many of which are beyond the Corporation’s control, that could cause the Corporation’s actual results and performance to differ materially from what is expected. In addition to the assumptions and other factors referenced specifically in connection with such statements, the following factors could impact the business and financial prospects of the Corporation: general economic conditions; legislative and regulatory initiatives; monetary and fiscal policies of the federal government; deposit flows; disintermediation; the cost of funds; general market rates of interest; interest rates or investment returns on competing investments; demand for loan products; demand for financial services; changes in accounting policies or guidelines; changes in the quality or composition of the Corporation’s loan and investment portfolio; and the satisfaction of the closing conditions for the sale of Fortress Bank of Cresco, including regulatory approval, and risk that the transaction does not close. Such uncertainties and other risk factors are discussed further in the Corporation’s filings with the Securities and Exchange Commission. The Corporation undertakes no obligation to make any revisions to forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release.
June 30, December 31, June 30,
2007 2006 2006
(Dollars in Thousands, Except
Share and Per Share Amounts)
ASSETS
Cash and due from banks $38,280 $33,851 $42,858
Interest bearing deposits in banks 1,784 907 4,018
Federal funds sold 11,848 6,023 259
Cash and cash equivalents 51,912 40,781 47,135
Available-for-sale securities 127,767 144,581 156,672
Loans, less allowance for loan losses of
$11,515 at June 30, 2007, $12,311 at
December 31, 2006 and $11,382 at
June 30, 2006 1,106,795 1,137,954 1,135,632
Assets held for sale 81,130 81,703 81,491
Accrued interest receivable 6,550 6,881 6,566
FHLB stock 11,446 11,437 14,299
Premises and equipment 28,948 30,600 29,088
Goodwill 27,320 28,798 28,723
Intangible assets 1,960 2,473 2,680
Other assets 23,345 20,732 20,016
Total assets $1,467,173 $1,505,940 $1,522,302LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Deposits:
Non-interest bearing $113,756 $133,623 $129,546
Interest bearing 955,829 972,853 955,541
Total deposits 1,069,585 1,106,476 1,085,087
Short-term borrowings 53,895 55,388 95,155
Long-term borrowings 109,152 109,906 115,822
Junior subordinated debt owed to
unconsolidated trusts 53,611 53,611 46,394
Liabilities held for sale 71,480 72,163 72,420
Accrued interest payable 3,747 4,213 3,878
Other liabilities 12,172 9,886 11,112
Total liabilities 1,373,642 1,411,643 1,429,868Stockholders’ equity
Preferred stock, $1.00 par value;
250,000 shares authorized, shares
issued and shares outstanding – none – – –
Common stock $1.00 par value;
25,000,000 shares authorized;
shares issued: 3,770,251 at June 30,
2007, December 31, 2006 and June 30,
2006; shares outstanding: 3,662,416 at
June 30, 2007, 3,677,180 at December
31, 2006 and 3,687,180 at June 30, 2006 3,770 3,770 3,770
Additional paid-in capital 53,666 53,684 53,673
Retained earnings 41,147 40,259 39,991
Accumulated other comprehensive loss (2,049) (881) (2,781)
Treasury stock, at cost (107,835 shares
at June 30, 2007, 93,071 shares at
December 31, 2006 and 83,071 shares
at June 30, 2006) (3,003) (2,535) (2,219)
Total stockholders’ equity 93,531 94,297 92,434
Total liabilities and stockholders’
equity $1,467,173 $1,505,940 $1,522,302Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
(Dollars In Thousands, Except Per Share Amounts)
Interest income:
Interest and fees on loans $19,928 $19,204 $39,921 $36,986
Interest and dividends on
securities:
Taxable 209 249 412 535
Tax-exempt 521 585 1,032 1,170
Interest on mortgage-backed
securities 779 855 1,579 1,654
Interest on interest
bearing deposits in banks
and federal funds sold 265 43 495 98
Total interest income 21,702 20,936 43,439 40,443Interest expense:
Interest on deposits 8,898 7,049 17,379 13,411
Interest on short-term
borrowings 534 1,302 1,331 2,338
Interest on long-term
borrowings 1,298 1,183 2,550 2,190
Interest on junior
subordinated debt owed to
unconsolidated trusts 1,058 903 2,104 1,766
Total interest expense 11,788 10,437 23,364 19,705Net interest income 9,914 10,499 20,075 20,738
Provision for loan losses 450 390 900 780
Net interest income after
provision for loan losses 9,464 10,109 19,175 19,958Non-interest income:
Service charges on deposit
accounts 967 960 1,864 1,892
Service charges on loans 588 804 1,466 1,519
Securities gains, net – – – –
Gain on sale of loans, net 9 39 33 54
Gain on sale of fixed
assets, net 162 – 161 175
Tax fees, brokerage and
insurance commissions 535 461 1,412 1,265
Other 681 758 1,280 1,703
Total noninterest
income 2,942 3,022 6,216 6,608Noninterest expenses:
Salaries and employee
benefits 6,633 6,821 13,194 14,081
Premises and equipment 1,781 1,564 3,691 3,300
Data processing fees 848 770 1,653 1,582
Marketing and business
development 449 416 867 865
Other 1,824 1,890 3,493 3,832
Total noninterest
expense 11,535 11,461 22,898 23,660Income from continuing
operations before
income taxes 871 1,670 2,493 2,906
Income taxes 260 510 803 861
Income from continuing
operations 611 1,160 1,690 2,045Discontinued operations
Income from discontinued
operations before
income tax expense 1,695 306 1,993 509
Income tax expense 1,386 99 1,485 159
Income from discontinued
operations 309 207 508 350
Net income $920 $1,367 $2,198 $2,395Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
(Dollars In Thousands, Except Per Share Amounts)Basic earnings per share from
continuing operations $0.17 $0.31 $0.46 $0.55
Basic earnings per share from
discontinued operations $0.08 $0.06 $0.14 $0.10
Basic earnings per share $0.25 $0.37 $0.60 $0.65Diluted earnings per share
from continuing operations $0.17 $0.31 $0.46 $0.55
Diluted earnings per share
from discontinued operations $0.08 $0.06 $0.14 $0.10
Diluted earnings per share $0.25 $0.37 $0.60 $0.65Dividends per share $0.18 $0.18 $0.36 $0.36
First Call Analyst:
FCMN Contact:
Source: Merchants & Manufacturers Bancorporation, Inc.
CONTACT: Michael J. Murry, Chairman of the Board of Directors,
+1-414-425-5334, or Frederick R. Klug, Executive Vice President and Chief
Financial Officer, +1-262-827-5632, both of Merchants & Manufacturers
Bancorporation, Inc.
Profile: Wisconsin News
