Durham-based M&F reports continued profitability
The Durham-based parent company for Mechanics and Farmers Bank reported Friday that the bank continued its long history of profitability last year with earnings of about $104,000.
The company’s net income available to common stockholders was down about 72 percent compared with the prior year. Its total loans, net interest income and total assets were also down year-over-year.
“2012 was a challenging year due to the weak but improving economy,” Kim D. Saunders, the company’s president and CEO, said in a news release. “Our talented team of bankers worked diligently to remain focused on managing problem loans, seeking opportunities for lending to qualified borrowers, managing costs, and delivering unparalleled customer service, which resulted in our ability to continue or legacy of profitability.”
The company reported that it had $175.2 million in total loans outstanding as of Dec. 31. The total was down about 6.9 percent from the prior year.
The decline was due to normal runoff, a lack of demand for new loans, and increased pressure from other banks to refinance existing loan relationships, according to the release.
The company reported that its interest income was $11.55 million in the year, which was down about 6.7 percent from the prior year’s $12.385 million.
According to the release, the decrease reflected lower average loan balances outstanding combined with lower yields on loans and investments.
The company’s total assets as of Dec. 31 were down 2.7 percent to $296 million.
Its net income available to common stockholders reflected about $237,000 in preferred dividends and accretion.
The company pays preferred dividends after it sold $11.7 million worth of stock in 2009 to the U.S. Department of the Treasury through the Capital Purchase Program of the Troubled Asset Relief Program, also known as TARP.
Treasury launched the program in 2008 to stabilize the U.S. financial system.
In 2010, the company exchanged its stock under another TARP program called the Community Development Capital Initiative, which allowed financial institutions that serve low-income urban and rural communities to pay a 2 percent - rather than a 5 percent - interest rate.
Based in Durham, the commercial bank was organized in 1907, and began operations in 1908. It has a total of seven offices in the state in Raleigh, Charlotte, Winston-Salem, and in Greensboro.
As of Dec. 31, the company and bank had 80 employees, 75 of them full-time, according to its annual report.