8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): November 5, 2010

MACKINAC FINANCIAL CORPORATION

(previous filings under the name NORTH COUNTRY FINANCIAL CORPORATION)
(Exact name of registrant as specified in its charter)

MICHIGAN	0-20167	38-2062816
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

130 SOUTH CEDAR STREET, MANISTIQUE, MICHIGAN	49854
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (888) 343-8147

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02 Results of Operations and Financial Condition
	ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
SIGNATURE
EXHIBIT INDEX
EX-99

Item 2.02 Results of Operations and Financial Condition.

On November 5, 2010, Registrant issued a press release announcing its results of operations for the quarter and nine months ended as of September 30, 2010. The press release is attached as Exhibit No. 99 and incorporated herein by reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits

The following exhibits are furnished herewith:

EXHIBIT
NUMBER		EXHIBIT DESCRIPTION
	99	Press Release of Mackinac Financial Corporation dated November 5, 2010

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MACKINAC FINANCIAL CORPORATION
Date: November 5, 2010	By:	/s/ Ernie R. Krueger
		Ernie R. Krueger
		EVP/CFO

3

EXHIBIT INDEX

EXHIBIT
NUMBER		EXHIBIT DESCRIPTION
	99	Press Release November 5, 2010

4

EX-99

Exhibit 99

PRESS RELEASE

For Release:	November 5, 2010
Nasdaq:	MFNC
Contact:	Investor Relations at (888) 343-8147
Website:	www.bankmbank.com

MACKINAC FINANCIAL CORPORATION
REPORTS THIRD QUARTER AND NINE MONTHS 2010 RESULTS

(Manistique, Michigan) — Mackinac Financial Corporation (Nasdaq: MFNC), the bank holding company for mBank (the “Bank”) today announced a third quarter 2010 loss of $.104 million or $(.03) per share compared to net income of $1.536 million, or $.45 per share for the third quarter of 2009. Net income for the first nine months of 2010 totaled $.934 million, or $.27 per share, compared to $2.087 million, or $.61 per share, for the same period in 2009.

The third quarter results include a provision for loan losses of $1.000 million compared to $.700 million for the three month period in 2009. Operating results for the nine month period in 2010 include a $4.700 million provision, $1.948 million in OREO write-downs, $.215 million in security gains and a $3.500 million deferred tax benefit. The nine month and three month results for 2009 include a $1.208 million gain from the sale of two branch offices and $.644 million in security gains.

Income before tax and loan loss provision for the third quarter of 2010 amounted to $1.111 million compared to $1.433 million in 2009 before tax, loan loss provision and also excluding the branch sale and security gains noted above. The 2010 nine month income before provision, taxes and nonrecurring items noted above, would total $3.330 million in compared to $3.100 million in 2009. Outside of the continuing impact of higher provisions and other costs associated with remediation of problem credits, the company continued its momentum in terms of strong core deposit growth and noninterest income generation from loan sales. Core deposits have increased by $77 million in 2010 and income from SBA and secondary mortgage loans totaled $.958 million thus far in 2010 compared to $.472 million in 2009, more than a 100% increase.

Nonperforming assets at the end of the third quarter of 2010 totaled $17.005 million, 3.41% of total assets, a reduction of $4.036 million from 2009 year end balances of $21.041 million. Nonaccrual loans represent 1.16% of total loans and loan delinquencies greater than 30 days have remained stable and continue to reside below peer levels and manageable. The company’s Texas Ratio remained satisfactory at 27.68%. Kelly George, President and Chief Executive Officer of mBank, commented, “We are pleased to record lower levels of nonperforming assets and we will continue our timely and aggressive efforts in the identification and resolution of nonperforming assets which should result in more normalized loan loss provisions and lowered credit related costs in future periods. However, we continue to be hindered from the impacts of reappraising problem assets due to the slow disposition process from an accommodating Michigan legal system for borrowers, but are encouraged that we are facing few new problem situations.”

4

Loans at September 30, 2010 totaled $382.727 million down slightly from the $384.100 million at September 30, 2009 and from 2009 year end balances of $384.310 million. Loan balances have been impacted by normal principal runoff of $38.0 million along with pay-offs of $17.8 million and SBA sales. Mr. George stated, “Although our outstanding loan balances have not increased, we are pleased with current year to date production which totaled $58.0 million, with 72% originating in the Upper Peninsula. Our fourth quarter pipeline is strong with continued success with the SBA and USDA loan guarantee programs. Thus far in 2010 we have sold $8.9 million of these loan balances and recognized $.647 million in gains.”

Total assets of the Corporation at September 30, 2010 were $499.066 million, down $14.174 million, or 2.76% from the $513.180 million in total assets reported at September 30, 2009 and down $16.371 million, or 3.18%, from total assets of $515.377 million at year-end 2009. Asset totals at September 30, 2010 reflect the decrease of $9.063 million in securities.

Total shareholders’ equity at September 30, 2010 totaled $55.987 million, compared to $55.766 million on September 30, 2009, an increase of $.221 million, or .40%. The capital levels at the bank and on a consolidated basis are strong with Tier 1 above 8% and total risk based capital above 11%. Book value of common shareholders’ equity was $13.26 per share at September 30, 2010 compared to $13.25 per share at September 30, 2009.

Total deposits of $404.524 were lower than deposit totals reported at September 30, 2009 of $418.581 million and 2009 year-end deposits of $421.389 million. The decreased deposit level was due entirely to lower levels of brokered deposits, a very positive initiative given the current regulatory climate for this type of funding source, which totaled $94.660 million at September 30, 2010 compared to $175.176 million at 2009 year end and $192.631 million at September 30, 2009.

Noninterest income, totaled $.648 million in the third quarter of 2010, compared to $2.418 million in the same period in 2009. Noninterest income for the 2010 nine month period totaled $2.048 million compared to $3.248 million in 2009. Noninterest income for the third quarter and nine month periods of 2009 included $1.208 million of branch sale gains and $.644 million of security gains. The Corporation also recognized $.215 million in gains from the sale of securities which was recorded in the first quarter of 2010.

Noninterest expense totaled $3.601 million in the third quarter, an increase of $.158 million from the third quarter of 2009. On a year to date basis 2010 noninterest expense totaled $12.560 million, an increase of $2.408 million when compared to the nine months ended September 30, 2009. The increase in expenses is primarily attributed to costs associated with nonperforming assets which were $2.2 million higher in 2010 and included OREO write-downs of $1.948 million. Noninterest expenses, excluding the extraordinary costs incurred for remediation of nonperforming assets, are well managed and below peer averages.

MFNC Chairman and CEO Paul Tobias concluded, “Thus far in 2010, we have focused our efforts on preserving shareholders’ equity with extensive efforts in nonperforming asset remediation. Our results through the first nine months reflect the costs associated with this effort. We are confident that the worst is behind us and pleased to report that our core earnings are increasing. We will continue to look for opportunities that will enhance the franchise value while improving our current platform to increase core earnings.”

Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $450 million and whose common stock is traded on the NASDAQ stock market as “MFNC.” The principal subsidiary of the Corporation is mBank. Headquartered in Manistique, Michigan, mBank has 11 branch locations in Michigan; seven in the Upper Peninsula, three in the Northern Lower Peninsula and one in Oakland County. The Company’s banking services include commercial

5

lending and treasury management products and services geared toward small to mid-sized businesses, as well as a full array of personal and business deposit products and consumer loans.

Forward-Looking Statements

This release contains certain forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “should,” “will,” and variations of such words and similar expressions are intended to identify forward-looking statements: as defined by the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current beliefs as to expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Factors that could cause a difference include among others: changes in the national and local economies or market conditions; changes in interest rates and banking regulations; the impact of competition from traditional or new sources; and the possibility that anticipated cost savings and revenue enhancements from mergers and acquisitions, bank consolidations, branch closings and other sources may not be fully realized at all or within specified time frames as well as other risks and uncertainties including but not limited to those detailed from time to time in filings of the Company with the Securities and Exchange Commission. These and other factors may cause decisions and actual results to differ materially from current expectations. Mackinac Financial Corporation undertakes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

6

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS

	For The Period Ended
	September 30,			December 31,			September 30,
	2010			2009			2009
(Dollars in thousands, except per share data)	(Unaudited)						(Unaudited)
Selected Financial Condition Data (at end of period):
Assets	$	499,006		$	515,377		$	513,180
Loans		382,727			384,310			384,100
Investment securities		37,450			46,513			80,203
Deposits		404,524			421,389			418,581
Borrowings		36,069			36,140			36,140
Shareholders’ Equity		55,987			55,299			55,766
Selected Statements of Income Data (nine months and year ended):
Net interest income	$	12,109		$	16,287		$	11,856
Provision for loan losses		4,700			3,700			1,400
Income (Loss) before taxes and preferred dividend		(3,103	)		3,536			3,552
Net income		934			1,907			2,087
Income per common share — Basic		.27			.56			.61
Income per common share — Diluted		.27			.56			.61
Three Months Ended:
Net interest income	$	4,064		$	4,431		$	4,310
Income (Loss) before taxes and preferred dividend		111			(16	)		2,585
Net income (Loss)		(104	)		(180	)		1,536
Income (Loss) per common share — Basic		(.03	)		(.05	)		.45
Income (Loss) per common share — Diluted		(.03	)		(.05	)		.45
Weighted average shares outstanding		3,419,736			3,419,736			3,419,736
Selected Financial Ratios and Other Data (nine months and year ended):
Performance Ratios:
Net interest margin		3.59	%		3.59	%		3.54	%
Efficiency ratio		74.12			73.37			77.71
Return on average assets		.25			.39			.57
Return on average equity		2.21			3.77			5.72
Average total assets	$	507,938		$	493,652		$	486,760
Average total shareholders’ equity	$	56,561		$	50,531		$	48,801
Average loans to average deposits ratio		93.19	%		92.99	%		93.22	%
Common Share Data (at end of period):
Market price per common share	$	5.10		$	4.64		$	4.10
Book value per common share	$	13.26		$	13.10		$	13.25
Common shares outstanding		3,419,736			3,419,736			3,419,736
Other Data (at end of period):
Allowance for loan losses	$	5,437		$	5,225		$	4,081
Non-performing assets	$	17,005		$	21,041		$	17,349
Allowance for loan losses to total loans		1.42	%		1.36	%		1.06	%
Non-performing assets to total assets		3.41	%		4.08	%		3.38	%
Texas Ratio*		27.68	%		34.77	%		28.99	%
Number of:
Branch locations		11			10			10
FTE Employees		98			100			97

* Texas Ratio: Non-performing Assets divided by Total Equity plus Allowance for Loan Losses

7

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,			September 30,
(Dollars in thousands)	2010			2009			2009
	(Unaudited)						(Unaudited)
ASSETS
Cash and due from banks	$	36,561		$	18,433		$	23,249
Federal funds sold		12,000			27,000			—
Cash and cash equivalents		48,561			45,433			23,249
Interest-bearing deposits in other financial institutions		692			678			662
Securities available for sale		37,450			46,513			80,203
Federal Home Loan Bank stock		3,794			3,794			3,794
Loans:
Commercial		295,262			305,670			306,590
Mortgage		82,312			74,350			73,116
Installment		5,153			4,290			4,394
Total Loans		382,727			384,310			384,100
Allowance for loan losses		(5,437	)		(5,225	)		(4,081	)
Net loans		377,290			379,085			380,019
Premises and equipment		9,843			10,165			10,281
Other real estate held for sale		5,758			5,804			5,821
Other assets		15,618			23,905			9,151
TOTAL ASSETS	$	499,006		$	515,377		$	513,180
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest bearing deposits	$	44,402		$	35,878		$	33,254
NOW, money market, checking		127,828			95,790			88,843
Savings		20,265			18,207			18,807
CDs<$100,000		94,560			59,953			59,637
CDs>$100,000		22,809			36,385			25,409
Brokered		94,660			175,176			192,631
Total deposits		404,524			421,389			418,581
Borrowings:
Federal Home Loan Bank		35,000			35,000			35,000
Other		1,069			1,140			1,140
Total borrowings		36,069			36,140			36,140
Other liabilities		2,426			2,549			2,693
Total liabilities		443,019			460,078			457,414
TOTAL SHAREHOLDERS’ EQUITY		55,987			55,299			55,766
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	499,006		$	515,377		$	513,180

8

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(Dollars in thousands except per share data)	2010			2009		2010			2009
	(Unaudited)					(Unaudited)
INTEREST INCOME:
Interest and fees on loans:
Taxable	$	5,300		$	5,106	$	15,718		$	15,212
Tax-exempt		46			63		145			237
Interest on securities:
Taxable		324			888		1,077			2,020
Tax-exempt		7			7		21			11
Other interest income		23			28		100			44
Total interest income		5,700			6,092		17,061			17,524
INTEREST EXPENSE:
Deposits		1,414			1,550		4,309			4,894
Borrowings		222			232		643			774
Total interest expense		1,636			1,782		4,952			5,668
Net interest income		4,064			4,310		12,109			11,856
Provision for loan losses		1,000			700		4,700			1,400
Net interest income after provision for loan losses		3,064			3,610		7,409			10,456
OTHER INCOME:
Service fees		264			235		737			750
Net security gains		(1	)		644		215			644
Net gains on sale of secondary market loans		322			247		897			389
Other		63			1,292		199			1,465
Total other income		648			2,418		2,048			3,248
OTHER EXPENSES:
Salaries and employee benefits		1,779			1,603		5,281			4,761
Occupancy		358			336		1,048			1,069
Furniture and equipment		202			193		593			604
Data processing		193			221		587			665
Professional service fees		168			161		502			458
Loan and deposit		441			402		3,297			1,175
Telephone		53			50		145			139
Advertising		77			80		220			238
Other		330			397		887			1,043
Total other expenses		3,601			3,443		12,560			10,152
Income (Loss) before provision for income taxes		111			2,585		(3,103	)		3,552
Provision for (benefit of) income taxes		30			864		(4,593	)		1,142
NET INCOME (LOSS)		81			1,721		1,490			2,410
Preferred dividend expense		185			185		556			323
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	(104	)	$	1,536	$	934		$	2,087
INCOME (LOSS) PER COMMON SHARE:
Basic	$	(0.03	)	$	.45	$	.27		$	.61
Diluted	$	(0.03	)	$	.45	$	.27		$	.61

9

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
LOAN PORTFOLIO AND CREDIT QUALITY

(Dollars in thousands)

Loan Portfolio Balances (at end of period):

	September 30,		December 31,		September 30,
	2010		2009		2009
Commercial Loans
Real estate — operators of nonresidential buildings	$	52,192	$	48,689	$	47,007
Hospitality and tourism		39,998		45,315		45,867
Commercial construction		25,718		24,591		24,076
Real estate agents and managers		19,675		24,242		23,996
Other		157,679		162,833		165,644
Total Commercial Loans		295,262		305,670		306,590
1-4 family residential real estate and construction		82,312		74,350		73,116
Consumer		5,153		4,290		4,394
Total Loans	$	382,727	$	384,310	$	384,100

Credit Quality (at end of period):

	September 30,			December 31,			September 30,
	2010			2009			2009
Nonperforming Assets :
Nonaccrual loans	$	4,447		$	14,368		$	10,655
Loans past due 90 days or more		—			—			—
Restructured loans		6,800			869			873
Total nonperforming loans		11,247			15,237			11,528
Other real estate owned		5,758			5,804			5,821
Total nonperforming assets	$	17,005		$	21,041		$	17,349
Nonperforming loans as a % of loans		2.94	%		3.96	%		3.00	%
Nonperforming assets as a % of assets		3.41	%		4.08	%		3.38	%
Reserve for Loan Losses:
At period end	$	5,437		$	5,225		$	4,081
As a % of average loans		1.42	%		1.39	%		1.10	%
As a % of nonperforming loans		48.34	%		34.29	%		35.40	%
As a % of nonaccrual loans		122.26	%		36.37	%		38.30	%
Charge-off Information (year to date):
Average loans	$	384,028		$	374,796		$	370,952
Net charge-offs	$	4,488		$	2,752		$	1,596
Charge-offs as a % of average loans		1.17	%		.73	%		.43	%

10

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS

	QUARTER ENDED
	(Unaudited)
	September 30,			June 30,			March 31,			December 31,			September 30,
	2010			2010			2010			2009			2009
BALANCE SHEET (Dollars in thousands)
Total loans	$	382,727		$	384,839		$	377,311		$	384,310		$	384,100
Allowance for loan losses		(5,437	)		(6,371	)		(4,737	)		(5,225	)		(4,081	)
Total loans, net		377,290			378,468			372,574			379,085			380,019
Intangible assets		—			—			—			—			—
Total assets		499,006			500,774			502,427			515,377			513,180
Core deposits		287,055			271,026			236,227			209,828			200,541
Noncore deposits (1)		117,469			134,758			168,985			211,561			218,040
Total deposits		404,524			405,784			405,212			421,389			418,581
Total borrowings		36,069			36,140			36,140			36,140			36,140
Total shareholders’ equity		55,987			56,231			58,722			55,299			55,766
Total shares outstanding		3,419,736			3,419,736			3,419,736			3,419,736			3,419,736
AVERAGE BALANCES (Dollars in thousands)
Assets	$	512,335		$	502,942		$	508,495		$	514,102		$	513,687
Loans		385,268			382,169			384,640			386,203			370,310
Deposits		416,847			405,449			413,897			418,280			419,102
Equity		56,668			57,889			55,109			55,665			54,594
INCOME STATEMENT (Dollars in thousands)
Net interest income	$	4,064		$	4,023		$	4,022		$	4,431		$	4,310
Provision for loan losses		1,000			2,800			900			2,300			700
Net interest income after provision		3,064			1,223			3,122			2,131			3,610
Total noninterest income		648			593			807			1,503			2,418
Total noninterest expense		3,601			5,330			3,629			3,650			3,443
Income (Loss) before taxes		111			(3,514	)		300			(16	)		2,585
Provision for (benefit of) income taxes		30			(1,212	)		(3,411	)		(22	)		864
Preferred dividend expense		185			186			185			186			185
Net income (loss) available to common shareholders	$	(104	)	$	(2,488	)	$	3,526		$	(180	)	$	1,536
PER SHARE DATA
Earnings (Losses) — basic	$	(.03	)	$	(.73	)	$	1.03		$	(.05	)	$	.45
Earnings (Losses)— diluted		(.03	)		(.73	)		1.03			(.05	)		.45
Book value per common share		13.26			13.34			14.08			13.10			13.25
Market value, closing price		5.10			6.50			4.72			4.64			4.10
ASSET QUALITY RATIOS
Nonperforming loans/total loans		2.94	%		2.87	%		2.62	%		3.96	%		3.00	%
Nonperforming assets/total assets		3.41			3.34			3.51			4.08			3.38
Allowance for loan losses/total loans		1.42			1.66			1.26			1.36			1.06
Allowance for loan losses/nonperforming loans		48.34			57.69			47.87			34.29			35.40
Texas Ratio(2)		27.68			26.71			27.76			34.77			28.99
PROFITABILITY RATIOS
Return on average assets		(.08)	%		(1.98	)%		2.81	%		(.14	)%		1.19	%
Return on average equity		(0.73	)		(17.24	)		25.95			(1.28	)		11.16
Net interest margin		3.69			3.56			3.51			3.74			3.66
Efficiency ratio		75.98			76.04			78.12			71.03			70.09
Average loans/average deposits		92.42			94.26			92.93			92.33			88.36
CAPITAL ADEQUACY RATIOS
Tier 1 leverage ratio		9.22	%		9.38	%		9.85	%		9.75	%		9.74	%
Tier 1 capital to risk weighted assets		11.73			11.65			12.48			11.92			12.18
Total capital to risk weighted assets		12.98			12.91			13.69			13.17			13.19
Average equity/average assets		11.06			11.51			10.84			10.83			10.63
Tangible equity/tangible assets		11.06			11.51			10.84			10.83			10.87

(1)	Noncore deposits includes Internet CDs, brokered deposits and CDs greater than $100,000
(2)	Texas Ratio: Nonperforming Assets divided by Total Equity plus Allowance for Loan Losees

8

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS

9