KOSCIUSKO — First M&F Corp. reported preliminary results for 2009 of a net loss of $44.048 million attributable to common shareholders, or $4.86 basic and diluted earnings per share, compared to earnings of $522,000, or $0.06 basic and diluted earnings per share, for 2008.
The company’s final results are pending the completion of a review for potential impairment of goodwill as required by FASB ASC 350. First M&F expects to complete this review and report its final results before March 16, 2010, the filing date for its 10-K with the Securities and Exchange Commission. The reported preliminary results do not include any fourth quarter impairment charge, which may be required by the goodwill impairment study now underway. Any goodwill impairment will result in a non-cash charge to earnings, reducing goodwill and equity but will have no effect on regulatory capital since it is excluded from regulatory capital.
The fall in earnings was largely due to real estate loan impairments, which led to extraordinary provision expense primarily in the first and fourth quarters. Hugh Potts Jr., chairman and CEO, said, “Our 2009 loss is disappointing to say the least. The recognition of appropriate marks in our loan and other real estate portfolio has been painful in the effect on earnings and capital but should pave the way for an improved 2010 when positive earnings and capital retention are expected. We remain well-capitalized in spite of the toll of 2009. The intense scrutiny applied to our loan portfolio, while extraordinary by historical norms, was necessary and is now woven into the fabric of our risk management. We believe that risk management in the company continues to improve including the reduction of portfolio concentrations and a redistribution of risk based on portfolio diversification and tighter underwriting standards.”
“We have reported in previous periods some signs of a lessening of the pace of extraordinary impairments. This is still our outlook for 2010. The deterioration of acquisition, construction and development loans has begun to somewhat stabilize and our fourth quarter provisioning and charge-offs reflects the fine-tuning of our risk measurement process.”
Net income for the quarter ended Dec. 31, 2009, was a loss of $10.881 million attributable to common shareholders, or $1.20 basic and diluted earnings per share, compared to a loss of $4.3 million, or $.47 basic and diluted earnings per share, for the fourth quarter of 2008.