FARMINGTON HILLS, Mich., July 27 /PRNewswire-FirstCall/ -- Michigan Heritage Bancorp, Inc. (OTC Bulletin Board: MHBC - News), the holding company for Michigan Heritage Bank, posted net income of $210,000 or $0.14 per diluted share for the first six months of 2007 compared to a net income of $506,000 or $0.33 per diluted share for the same six-month period of 2006. MHBC's net income for the second quarter of 2007 was $54,000 or $0.04 per diluted share compared to $252,000 or $0.16 per diluted share for the second quarter of 2006. Total assets for the quarter ended June 30, 2007 were $181,274,000, up $9,518,000 or 5.54% from the same quarter of 2006 and $1,232,000 above total assets as of December 31, 2006. Perry Driggs, Chairman, reported today.
Net interest margin has continued to compress due to the flat yield curve, the Bank's competitive market for quality loans and higher-costing deposits. As of June 30, 2007, the Bank's net interest margin was 3.99% compared to 4.17% for the same six-month period of 2006.
During the first half of 2007, the Bank added to its loan loss reserves by $120,000, compared to no provisions added for the same time period of 2006. During the second quarter of 2007 the Bank had a recovery of $154,000 from a previously charged-off loan, helping to increase the Bank's June 30, 2007 loan loss reserve ratio to 1.28% compared to a 1.14% for the same period ended 2006.
Mr. Driggs added, "During the first half of 2007 we limited asset growth in light of the current economic conditions in our market area. Raymond Biggs, the Bank's president and CEO, continued restructuring the Bank's organization and changing the bank's business model in order to create future profitable growth opportunities and improved earnings. These changes are building a solid foundation that will enable MHBC to achieve the earnings performance expected by our shareholders."
Raymond Biggs stated: "While MHB continues to feel margin pressure via competitive loan rates and intense competition for deposits, we remain optimistic about our markets and the changes we have made to transform our Bank. We have strengthened our lending and credit areas with the addition of Vince Borowski as our new Senior Lender in April of 2007 and Jan Donahue as our Credit Manager in the fourth quarter of 2006. Despite the economic conditions that exist in Michigan and specifically the Southeastern Michigan economy, we continue to be optimistic about our Bank's prospects. Opportunities have been helped by the merger announcements and other structural changes among the larger banks in our market. This kind of market turbulence creates opportunities for community banks and we plan to make the most of these situations."
Total assets as of June 30, 2007 were $181,274,000, compared to $180,042,000 at December 31, 2006, an increase of $1,232,000, or 0.68%.
Total net loans as of June 30, 2007 were $142,966,000, compared to $144,285,000, at December 31, 2006, a decrease of $1,319,000, or 0.91%.
Total deposits were $151,283,000 as of June 30, 2007 compared to $152,428,000 from December 31, 2006, a decrease of $1,145,000, or 0.75%.
Shareholders' equity was $16,908,000, a decrease of $315,000 or 1.83% compared to December 31, 2006. The primary reason for the decrease was Michigan Heritage Bancorp, Inc., the Bank's holding corporation, repurchased 29,390 shares of its stock for $352,000 during the first six months of 2007
Michigan Heritage Bank is a state chartered, full-service commercial bank and wholly owned subsidiary of Michigan Heritage Bancorp, Inc. A member of both the Federal Reserve System and the Federal Home Loan Bank, deposits are FDIC insured. Michigan Heritage operates from branch offices in Farmington Hills, Livonia, Novi, Troy and Wixom. Michigan Heritage Bancorp stock trades on the over-the-counter (OTC) market and quotations are reported on the OTC Bulletin Board under the symbol "MHBC".
Safe Harbor. This press release contains "forward looking statements" within the meaning of the federal securities law regarding proposed developments and operations of the Company. These statements represent the Company's expectations of beliefs concerning future events. Statements containing expressions such as "believes", "anticipates" or "expects" are intended to identify such forward-looking statements. All forward-looking statements involve risks and uncertainties. Although the Company believes its expectations are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not materially differ from expected results. The Company cautions that these and similar statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements, including regional and national economic conditions, substantial changes in levels of market interest rates, credit and other risks of lending and investment activities and competitive and regulatory factors. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statements, to reflect occurrences or unanticipated events of circumstances after the date of such statements.