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): April 30, 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	(Commission	(IRS Employer
of incorporation)	File Number)	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))

Item 2.02 Results of Operations and Financial Condition.

On April 30, 2010, Registrant issued a press release announcing its results of operations for the three months ended March 31, 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 April 30, 2010

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.

Date: April 30, 2010	MACKINAC FINANCIAL CORPORATION
	By:	/s/ Ernie R. Krueger
		Ernie R. Krueger
		EVP/CFO

EXHIBIT INDEX

EXHIBIT
NUMBER	EXHIBIT DESCRIPTION
99	Press Release April 30, 2010

EX-99

Exhibit 99

PRESS RELEASE

For Release:	April 30, 2010
Nasdaq:	MFNC
Contact:	Investor Relations at (888) 343-8147
Website:	www.bankmbank.com

MACKINAC FINANCIAL CORPORATION
REPORTS FIRST QUARTER 2010 RESULTS

(Manistique, Michigan) — Mackinac Financial Corporation (Nasdaq: MFNC), the bank holding company for mBank (the “Bank”) today announced first quarter 2010 income of $3.526 million or $1.03 per share compared to net income of $.090 million, or $.03 per share for the first quarter of 2009. Operating results for the first quarter of 2010 included the recognition of a $3.500 million deferred tax benefit related to NOL carry-forwards. This deferred tax benefit was recognized in accordance with GAAP accounting which requires the benefit to be recognized when “it is more likely than not” that the NOL will be utilized within the carry-forward period.

In the first quarter of 2010 a provision for loan losses of $.900 million was booked in comparison to a provision of $.550 million in the first quarter of 2009. The 2010 first quarter also includes the preferred dividend expense of $.185 million. Weighted average shares outstanding amounted to 3,419,736 in both periods.

Net interest margin in the first quarter of 2010 increased to $4.022 million, 3.51%, compared to $3.495 million, or 3.35%, in the first quarter of 2009. The interest margin declined from 3.74% in the fourth quarter of 2009 largely due to the sale of approximately $40 million of investment securities late in 2009, the proceeds of which will be used to pay off brokered deposit maturities but is currently in overnight funds yielding .25%. Kelly W. George, President and Chief Executive Officer of mBank, stated, “ During 2009, we experienced margin improvement from decreased rates on wholesale funding and also benefitted from our disciplined loan pricing which included establishing interest rate floors on new and renewing loans. The temporary decline in our net interest margin is due to our decision, late in the 2009 fourth quarter, to deleverage our balance sheet in anticipation of narrowing interest rate spreads. We expect our margin to improve as we progress through the year reducing our current excess liquidity through the funding of new loans and payment of maturing brokered deposits.”

Noninterest income, at $.807 million in the first quarter of 2010, increased $.416 million from the first quarter 2009 level of $.391 million. The most significant reason for the increase between periods was the increased activity in the sale of loans, which totaled $.316 million in 2010 versus $.058 million in the same period in 2009. Noninterest income in the first quarter of 2010 also includes $.215 million of security gains.

Noninterest expense totaled $3.629 million in the first quarter of 2010, an increase of $.390 million, or $12.04%. Increased expenses in the first quarter reflect the added cost of aggressive nonperforming asset remediation, along with an increase in FDIC insurance premiums of $.097 million. The expenses related to nonperforming assets include increased legal costs and expenses associated with OREO, which contributed to the overall increase in this expense category from $.136 million in the first quarter of 2009 to $.395 million in the 2010 first quarter.

Total assets of the Corporation at March 31, 2010 were $502.427 million, up 7.73% from the $466.375 million reported at March 31, 2009. First quarter 2010 total assets were down 2.51% from the $515.377 million of total assets at year-end 2009.

Total loans at March 31, 2010 were $377.311 million, a 1.76% increase from the $370.776 million at March 31, 2009. Total loans at the end of the first quarter of 2010 were down $6.999 million from year-end 2009 total loans of $384.310 million. George stated, “Loan growth in the first quarter was impacted by $22.8 million in normal principal reduction and pay-downs.

The $22.8 million in reductions included $3.2 million in SBA loan sales, and the move of $2.1 million of nonperforming loans to OREO and a reduction of $4.5 million on another nonperforming loan relationship that was sold. Our first quarter new loan production was relatively strong at $15.0 million, with new production occurring in all regions, but strongest in the Upper Peninsula with $8.2 million. We are still seeing good loan growth opportunities and expect to continue our recent successes in SBA lending.”

Total deposits of $405.212 million at March 31, 2010 were up 5.04% percent from deposits of $385.757 million on March 31, 2009. First quarter 2010 deposits were down $16.177 million from year-end 2009 deposits of $421.389 million. The overall reduction in deposits for the first quarter of 2010 is comprised of a decrease in noncore deposits of $42.576 million which was partially offset with increased core deposits of $26.399 million. George, commenting on the increased core deposits, stated, “In 2009, one of our primary objectives and accomplishments was core deposit growth. In the first quarter of 2010, we continued to grow core deposits and will remain focused on this growth to reduce our overall dependency on wholesale deposits. We developed an aggressive 2010 plan for increasing deposits by actively promoting extremely attractive transactional deposit products along with competitive core deposit pricing on our CD products. We have been quite successful thus far in 2010 and expect continued deposit growth for the remainder of the year.”

Nonperforming assets at the end of the first quarter of 2010 totaled $17.619 million, a reduction of $3.422 million from 2009 year end balances. Nonperforming loans were reduced $5.341 million. This decrease in nonperforming assets in the first quarter is the result of an aggressive nonperforming asset remediation program. George, commenting on credit quality, stated, “We are working diligently to reduce nonperforming assets. Our first quarter reductions are a result of aggressive remediation tactics that we deployed to mitigate longer term carrying costs associated with nonperforming assets. In addition to current period reductions, we also entered into a forward contract for the sale of a $3.2 million commercial property that should occur in the third quarter further reducing nonperforming assets.”

Common Shareholders’ equity at March 31, 2010 totaled $48.160 million, or $14.08 per share, compared to $41.864 million, or $12.24 per share on March 31, 2009.

Paul D. Tobias, Chairman and Chief Executive Officer concluded, “We look for 2010 to be another year in which we position MFNC for continued profitability improvement and core deposit growth which will continue to enhance shareholder value. In the 2010 first quarter we again made progress through the recognition of the $3.5 million in deferred tax benefit, a reduction in our balances of nonperforming assets through aggressive remediation, and by increasing core deposits.”

Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $500 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 10 branch locations; six in the Upper Peninsula, three in the Northern Lower Peninsula and one in Oakland County, Michigan. The Company’s banking services include commercial 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.

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share data)

	For The Period Ended
	March 31,			December 31,			March 31,
	2010			2009			2009
	(Unaudited)			(Unaudited)			(Unaudited)
Selected Financial Condition Data (at end of period):
Assets	$	502,427		$	515,377		$	466,375
Loans		377,311			384,310			370,776
Investment securities		36,841			46,513			51,071
Deposits		405,212			421,389			385,757
Borrowings		36,140			36,140			36,210
Shareholders’ Equity		58,722			55,299			41,864
Selected Statements of Income Data:
Net interest income	$	4,022		$	16,287		$	3,495
Income before taxes and preferred dividend		300			3,536			97
Net income		3,526			1,907			90
Income per common share — Basic		1.03			.56			.03
Income per common share — Diluted		1.03			.56			.03
Weighted average shares outstanding		3,419,736			3,419,736			3,419,736
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin		3.51	%		3.59	%		3.35	%
Efficiency ratio		78.12			73.37			82.36
Return on average assets		2.81			.39			.08
Return on average equity		25.95			3.77			.87
Average total assets	$	508,495		$	493,652		$	454,741
Average total shareholders’ equity		55,109			50,531			41,813
Average loans to average deposits ratio		92.93	%		92.99	%		99.54	%
Common Share Data (at end of period):
Market price per common share	$	4.72		$	4.64		$	4.00
Book value per common share	$	14.08		$	13.10		$	12.24
Common shares outstanding		3,419,736			3,419,736			3,419,736
Other Data (at end of period):
Allowance for loan losses	$	4,737		$	5,225		$	4,793
Non-performing assets	$	17,619		$	21,041		$	15,252
Allowance for loan losses to total loans		1.26	%		1.36	%		1.29	%
Non-performing assets to total assets		3.51	%		4.08	%		3.27	%
Number of:
Branch locations		10			10			13
FTE Employees		103			100			101

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,			March 31,
(Dollars in thousands)	2010			2009			2009
	(unaudited)						(unaudited)
ASSETS
Cash and due from banks	$	19,359		$	18,433		$	21,394
Federal funds sold		36,000			27,000			—
Cash and cash equivalents		55,359			45,433			21,394
Interest-bearing deposits in other financial institutions		700			678			569
Securities available for sale		36,841			46,513			51,071
Federal Home Loan Bank stock		3,794			3,794			3,794
Loans:
Commercial		296,271			305,670			295,595
Mortgage		76,996			74,350			71,554
Installment		4,044			4,290			3,627
Total Loans		377,311			384,310			370,776
Allowance for loan losses		(4,737	)		(5,225	)		(4,793	)
Net loans		372,574			379,085			365,983
Premises and equipment		10,060			10,165			11,134
Other real estate held for sale		7,723			5,804			2,199
Other assets		15,376			23,905			10,231
TOTAL ASSETS	$	502,427		$	515,377		$	466,375
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest bearing deposits	$	30,356		$	35,878		$	31,541
NOW, money market, checking		109,374			95,790			75,026
Savings		20,675			18,207			19,585
CDs<$100,000		75,822			59,953			70,708
CDs>$100,000		30,173			36,385			26,886
Brokered		138,812			175,176			162,011
Total deposits		405,212			421,389			385,757
Borrowings:
Federal Home Loan Bank		35,000			35,000			—
Other		1,140			1,140			36,210
Total borrowings		36,140			36,140			36,210
Other liabilities		2,353			2,549			2,544
Total liabilities		443,705			460,078			424,511
Shareholders’ equity:
Preferred stock — No par value:
Authorized 500,000 shares, 11,000 shares issued and outstanding		10,562			10,514			—
Common stock and additional paid in capital — No par value
Authorized — 18,000,000 shares
Issued and outstanding — 3,419,736 shares		43,502			43,493			42,833
Accumulated earnings (deficit)		3,724			199			(1,618	)
Accumulated other comprehensive income		934			1,093			649
Total shareholders’ equity		58,722			55,299			41,864
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	502,427		$	515,377		$	466,375

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended
	March 31,
	2010			2009
(Dollars in thousands except per share data)	(Unaudited)			(Unaudited)
INTEREST INCOME:
Interest and fees on loans:
Taxable	$	5,191		$	5,002
Tax-exempt		52			90
Interest on securities:
Taxable		397			459
Tax-exempt		7			1
Other interest income		40			2
Total interest income		5,687			5,554
INTEREST EXPENSE:
Deposits		1,457			1,778
Borrowings		208			281
Total interest expense		1,665			2,059
Net interest income		4,022			3,495
Provision for loan losses		900			550
Net interest income after provision for loan losses		3,122			2,945
OTHER INCOME:
Service fees		223			243
Net security gains		215			—
Net gains on sale of secondary market loans		316			58
Other		53			90
Total noninterest income		807			391
OTHER EXPENSE:
Salaries and employee benefits		1,720			1,597
Occupancy		345			378
Furniture and equipment		194			189
Data processing		189			220
Professional service fees		173			153
Loan and deposit		395			136
FDIC insurance assessment		222			125
Telephone		47			43
Advertising		72			78
Other		272			320
Total noninterest expense		3,629			3,239
Income before provision for income taxes		300			97
Provision for income taxes		(3,411	)		7
NET INCOME		3,711			90
Preferred dividend and accretion of discount		185			—
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		3,526			90
INCOME PER COMMON SHARE:
Basic	$	1.03		$	.03
Diluted	$	1.03		$	.03

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
LOAN PORTFOLIO AND CREDIT QUALITY

(Dollars in thousands)

Loan Portfolio Balances (at end of period):

	March 31,		December 31,		March 31,
	2010		2009		2009
Commercial Loans
Real estate — operators of nonresidential buildings	$	49,753	$	48,689	$	40,457
Hospitality and tourism		44,820		45,315		35,224
Real estate agents and managers		21,529		24,242		28,012
Operators of nonresidential buildings		13,170		12,619		13,512
Other		138,964		150,214		151,732
Total Commercial Loans		268,236		281,079		268,937
1-4 family residential real estate		70,087		67,232		65,792
Consumer		4,044		4,290		3,627
Construction
Commercial		28,035		24,591		26,658
Consumer		6,909		7,118		5,762
Total Loans	$	377,311	$	384,310	$	370,776

Credit Quality (at end of period):

	March 31,			December 31,			March 31,
	2010			2009			2009
Nonperforming Assets :
Nonaccrual loans	$	9,027		$	14,368		$	12,461
Loans past due 90 days or more		—			—			—
Restructured loans		869			869			592
Total nonperforming loans		9,896			15,237			13,053
Other real estate owned		7,723			5,804			2,199
Total nonperforming assets	$	17,619		$	21,041		$	15,252
Nonperforming loans as a % of loans		2.62	%		3.96	%		3.52	%
Nonperforming assets as a % of assets		3.51	%		4.08	%		3.27	%
Reserve for Loan Losses:
At period end	$	4,737		$	5,225		$	4,793
As a % of loans		1.26	%		1.39	%		1.29	%
As a % of nonperforming loans		47.87	%		34.29	%		36.72	%
As a % of nonaccrual loans		52.48	%		36.37	%		38.46	%
Charge-off Information (year to date):
Average loans		384,640			374,796			370,943
Net charge-offs		1,389			2,752			34
Charge-offs as a % of average loans		.36	%		.73	%		.01	%

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS

	QUARTER ENDED
	(Unaudited)
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
BALANCE SHEET (Dollars in thousands)
Total loans	$	377,311		$	384,310		$	384,100		$	372,004		$	370,776
Allowance for loan losses		(4,737	)		(5,225	)		(4,081	)		(4,119	)		(4,793	)
Total loans, net		372,574			379,085			380,019			367,885			365,983
Intangible assets		—			—			—			6			26
Total assets		502,427			515,377			513,180			506,304			466,375
Core deposits		236,227			209,828			200,541			202,892			196,860
Noncore deposits (1)		168,985			211,561			218,040			210,260			188,897
Total deposits		405,212			421,389			418,581			413,152			385,757
Total borrowings		36,140			36,140			36,140			36,210			36,210
Total shareholders’ equity		58,722			55,299			55,766			53,939			41,864
Total shares outstanding		3,419,736			3,419,736			3,419,736			3,419,736			3,419,736
AVERAGE BALANCES (Dollars in thousands)
Assets	$	508,495		$	514,102		$	513,687		$	491,205		$	454,740
Loans		384,640			386,203			370,310			371,609			370,943
Deposits		413,897			418,280			419,102			401,510			372,669
Equity		55,109			55,665			54,594			49,855			41,813
INCOME STATEMENT (Dollars in thousands)
Net interest income	$	4,022		$	4,431		$	4,310		$	4,051		$	3,495
Provision for loan losses		900			2,300			700			150			550
Net interest income after provision		3,122			2,131			3,610			3,901			2,945
Total noninterest income		807			1,503			2,418			439			391
Total noninterest expense		3,629			3,650			3,443			3,470			3,239
Income before taxes		300			(16	)		2,585			870			97
Provision for income taxes		(3,411	)		(22	)		864			271			7
Net income		3,711			6			1,721			599			90
Preferred dividend expense		185			186			185			138			—
Net income available to common shareholders	$	3,526		$	(180	)	$	1,536		$	461		$	90
PER SHARE DATA
Earnings	$	1.03		$	(.05	)	$	.45		$	.13		$	.03
Book value per common share		14.08			13.10			13.25			12.73			12.24
Market value, closing price		4.72			4.64			4.10			4.50			4.00
ASSET QUALITY RATIOS
Nonperforming loans/total loans		2.62	%		3.96	%		3.00	%		2.66	%		3.52	%
Nonperforming assets/total assets		3.51			4.08			3.38			2.93			3.27
Allowance for loan losses/total loans		1.26			1.36			1.06			1.11			1.29
Allowance for loan losses/nonperforming loans		47.87			34.29			35.40			41.71			36.72
PROFITABILITY RATIOS
Return on average assets		2.81	%		(.14	)%		1.19	%		.38	%		.08	%
Return on average equity		25.95			(1.28	)		11.16			3.71			.87
Net interest margin		3.51			3.74			3.66			3.58			3.35
Efficiency ratio		78.12			71.03			70.09			76.55			82.36
Average loans/average deposits		92.93			92.33			88.36			92.55			99.54
CAPITAL ADEQUACY RATIOS
Tier 1 leverage ratio		9.85	%		9.75	%		9.74	%		9.65	%		7.86	%
Tier 1 capital to risk weighted assets		12.48			11.92			12.18			11.94			9.31
Total capital to risk weighted assets		13.69			13.17			13.19			13.00			10.56
Average equity/average assets		10.84			10.83			10.63			10.15			9.19
Tangible equity/tangible assets		10.84			10.83			10.87			10.65			8.97

⁽¹⁾ Noncore deposits includesInternet CDs, brokered deposits and CDs greater than $100,000

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS