FBMI » Topics » Events Occurring in the Third Quarter 2008

This excerpt taken from the FBMI 10-Q filed Nov 6, 2008.

Events Occurring in the Third Quarter 2008

On September 7, the federal government placed the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) into receivership. As a result, the value of certain of our investments in Freddie Mac were determined to be significantly impaired and resulted in an other than temporary pre-tax impairment charge to earnings of $1,632,000. Because the underlying security of the investment was an equity security, that loss is characterized as a capital loss on September 30.

This excerpt taken from the FBMI 10-Q filed Aug 8, 2008.

Events Occurring in the Second Quarter 2008

In the second quarter of 2008, we completed our previously announced merger of our Mt. Pleasant and Lakeview affiliates into one entity. While we still remain committed to our multi-charter structure, these two affiliates already shared many resources and had overlapping geographic markets. The merger of these two affiliates is expected to provide greater efficiency in serving these markets and will allow us to better serve our customers in those markets.

We also closed the loan origination component of our Austin Mortgage Company affiliate (acquired in the Ionia County National Bank acquisition in 2007) in the second quarter of the year. The balance sheet of the entity retained a small loan portfolio of under $635,000, which will remain on the books of the company. Current market conditions and the state of the economy in Michigan no longer provide a profitable business climate for the lending activities in which this affiliate participates. We recorded $106,000 of pre-tax expense associated with severance and lease facility expenses in the second quarter associated with the closing of this business unit.

This excerpt taken from the FBMI 10-Q filed May 9, 2008.

Events Occurring in the First Quarter 2008

In the first quarter of 2008, we announced our intention to merge our Mt. Pleasant and Lakeview affiliates into one entity. While we still remain committed to our multi-charter structure, these two affiliates already share many resources and have overlapping geographic markets. The merger of these two affiliates is expected to provide greater efficiency in serving these markets and will allow us to better serve our customers in those markets. The proposed merger is subject to regulatory approval. We recorded $52,000 in pre-tax expense during the first quarter associated with the pending merger. Additional costs will be incurred in the second and third quarter as we complete the regulatory approval and systems conversion processes.

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