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About Old Mission Bank

SAULT STE. MARIE - For a denovo, Old Mission Bank has a wealth of experience on staff, which is paying off at the bottom line. The bank's 18 employees have 265 combined years in banking.

Old Mission Bank opened on Feb. 7, 2000, and was capitalized at $5 million. As of April 30, the bank had assets of $36 million, deposits of $31.7 million and loans of $21 million, all originated in the local market area. The loan portfolio includes $13.75 million in commercial loans, $4.65 million in residential loans and $2.0 million in consumer loans. During its initial eleven months of operation, its lenders produced in excess of $24 million in new loans and lines, the largest portion being commercial. The bank also has a serviced loan portfolio consisting of secondary market residential loans and participated commercial credits.

"The most rewarding experience has been the acceptance we have received from customers in the Eastern Upper Peninsula," said President/CEO David E. Firack, a 30 year Upper Peninsula banker who was born and raised in nearby DeTour. "Response after response, customers are telling us they like the friendly, warm and happy atmosphere here. We treat them well and they enjoy banking here."

In addition to being a Small Business Administration-approved lender, Old Mission Bank was only about a month old when it received the go-head from Freddie Mac to sell loans in the secondary market. The bank had $6.6 million in its secondary loan portfolio as of April 30. "When our initial application to Freddie Mac was returned with a statement that denovo banks were not considered for approval, we put our experience on the line and Freddie listened," Firack said. "We're not novice bankers."

Firack said the bank reached profitability in April, two months ahead of schedule. "We're significantly ahead of our projections," he said. "Our assets at the end of April equal what we had projected for July. Deposits are up nicely and our lenders have closed on over $11.2 million in new credit since year-end as well. Business has blossomed tremendously fast here this year. We've grown over 50 percent in four months time."

The bank's primary market area is Chippewa and Mackinac counties in the eastern U.P. Its secondary market in the U.P. is eastern Luce County, which includes Newberry, and the northern Lower Peninsula. "In our past banking experiences, we had good relationships with people in those areas and we're glad to be doing business with them again," he said. "We have a very good understanding of our market. We are conservative, but we have been aggressive."

Since its opening, Firack said the bank has undergone six examinations, five by state and federal regulators, in addition to its own audited examination by Plante & Moran, and passed with flying colors each time. "Our loan portfolio, deposit structure and sources, our initial projections and business plan have been scrutinized each time," he said. "Examination exit interviews commend our plain vanilla business plan, and our ability to raise deposits and meet our loan goals locally. Our asset quality has received consistently high ratings. Although time-consuming, the review process has its rewards."

Among the bank's short-term goals is establishing a branch office in southeastern Mackinac County to build on the business the bank is currently doing in that area. "Loan production from the out-county area has been strong," Firack said. "Deposit growth is key to our success and an office in the out-county area will definitely benefit our core growth. It's a strong area for mortgages, loans and deposits."

Old Mission's long-term goal is to remain profitably independent. "We are a locally owned and controlled community bank that serves the eastern U.P. and puts customers first," he said. "We want to grow our staff and take care of them as they grow our bank. I take my hat off to the outstanding job our employees have done. They are a first-class group of people, who truly enjoy their jobs. A majority of our employees are shareholders in the bank and take great pride in serving our area. Most of our employees came from larger banking organizations and they are glad to be back in an independent-bank setting."

Firack said he foresees a day when the bank may diversify into selling insurance and providing financial investment services for customers. "I see a need for us to provide financial advice to clients, to include financial and estate planning" he said. "People trust their bankers and continually look to us first for advice and direction and we want to serve the area's financial needs."

Soon after opening, Old Mission Bank joined the American Bankers Association's Banks of Promise program. Over 2,300 banks nationally and 45 banks in Michigan, as well as 47 state bankers associations, including the Michigan and Illinois bankers associations, have signed up for the ABA program by being involved in various programs that help youth in their market areas. In addition to having a number of employees volunteer recently to help construct a playground area for local children, Old Mission Bank provides weekly deliveries of The Wall Street Journal Classroom Edition to high school juniors in Sault Ste. Marie, Pickford and Cedarville. The publication helps teach students about business, the economy, the stock market and investments. Their teachers, meanwhile, received the regular daily version of the national financial newspaper.

Old Mission Bancorp Inc., the bank's holding company, held a private stock offering in 1999 and raised approximately $5.7 million to capitalize the bank and holding company. The bank's 12 directors were personally responsible for the stock sale, garnering 319 Michigan shareholders, the vast majority residing in the eastern U.P. Shares that originally sold for $10 in the initial offering brought $11 in a recent sale of shares among shareholders, Firack noted.  -MB 

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