First Federal of Northern Michigan Bancorp, Inc. Announces Adjustment to Earnings Due to Subsequent Events

First Federal of Northern Michigan Bancorp, Inc. FFNM adjusted its previously reported net income downward by $435,000 to a net loss of $355,000, or $0.12 per basic and diluted share, and to net income of $238,000, or $0.08 per basic and diluted share, for the quarter and year ended December 31, 2010, respectively, due to events which occurred subsequent to year-end. The downward adjustment was due primarily to the entry into a contract to sell the Company's largest piece of commercial REO property at a price $265,000 below the previously established book value at December 31, 2010. The Company expects that the sale of this property will close during the second quarter of 2011. Additionally, the adjustment to earnings reflected the following: information obtained in February 2011 pertaining to a property in non-accrual on December 31, 2010 resulted in a $75,000 addition to the provision for loan losses; a receivable recorded at December 31, 2010 was deemed to be uncollectible which required a charge to income of $45,000; and attorney fees were determined to be under-accrued by $50,000 as of December 31, 2010.