Mackinac Financial Corporation (NasdaqCM:MFNC) entered into a letter of intent to acquire of First Federal of Northern Michigan Bancorp, Inc. (OTCPK:FFNM) for $34.1 million on October 23, 2017. An agreement was signed on January 16, 2018. Under the terms of the transaction, the shareholders of First Federal of Northern Michigan Bancorp will receive 0.576 shares of Mackinac Financial as a consideration and a special cash dividend immediately prior to closing of the transaction of $8 million, subject to maintenance of a minimum equity requirement. Post-acquisition, First Federal of Northern Michigan (“FFNM”), a wholly-owned subsidiary of First Federal of Northern Michigan Bancorp, will merge with and into mBank, a wholly-owned subsidiary of Mackinac. In case of termination, FFNM will be obligated to pay Mackinac a termination fee of $1.5 million. Upon the closing of the transaction, Michael W. Mahler, Chief Executive Officer of First Federal of Northern Michigan, will remain with mBank as Executive Vice President of Community Banking and Administration. In addition, one mutually agreeable Director from FFNM will join the Mackinac’s and mBank’s Board. As of March 29, 2018, Martin A. Thomson, Chairman of the Board of Directors of First Federal of Northern Michigan, has been nominated for appointment to the Board of Directors of Mackinac Financial Corporation. The transaction is subject to approval by FFNM and Mackinac shareholders, recommendation by the Board of Directors of FMNB and Mackinac, approval of the listing on the Nasdaq of Mackinac common stock to be issued in the transaction, the effectiveness of the registration statement for Mackinac common stock to be issued in the transaction and approval by federal and state regulatory authorities. As of January 19, 2018, the transaction was unanimously approved by the Boards of First Federal and Mackinac. Mackinac received approval of the transaction from the Board of Governors of the Federal Reserve on March 30, 2018. on May 3, 2018, the transaction received all regulatory approvals. As of May 10, 2018, shareholders of Mackinac approved the issuance of its shares to First Federal of Northern Michigan Bancorp. The transaction is expected to close in the second quarter of 2018. As of March 16, 2018, the transaction is expected to close late in second quarter, 2018. As on May 3, 2018, the deal is expected to close on May 18, 2018. Mackinac anticipates the transaction to be accretive to earnings per share, exclusive of transaction related costs, for 2018 of 8% with increasing accretion estimated of 16% for 2019 and 18% for 2020. Piper Jaffray & Co. acted as financial advisor and Jeffrey H. Kuras of Honigman Miller Schwartz and Cohn LLP acted as legal advisor for Mackinac. Austin Associates LLC acted as financial advisor and provided fairness opinion, Rick Maroney of ProBank Austin acted as financial advisor and Martin D. Werner of Shumaker, Loop & Kendrick, LLP acted as legal advisor for First Federal of Northern Michigan Bancorp.