Exhibit 99.1

PRESS RELEASE

For Release:                                                                 August 2, 2018

Nasdaq:                                                                                           MFNC

Contact:                                                                                         Jesse A. Deering, (248) 290-5906 /jdeering@bankmbank.com

Paul D. Tobias, (248) 290-5900 / ptobias@bankmbank.com

Website:                                                                                        www.bankmbank.com

MACKINAC FINANCIAL CORPORATION REPORTS SECOND QUARTER 2018 RESULTS INCLUDING IMPACT OF ACQUSITION ACTIVITY AND CAPITAL RAISE

(Manistique, Michigan) – Mackinac Financial Corporation (Nasdaq: MFNC) (the “Corporation”), the bank holding company for mBank, today announced second quarter 2018 income of $396 thousand, or $.05 per share, compared to net income of $1.68 million, or $.27 per share, for the second quarter of 2017.  As expected, the 2018 second quarter results were impacted by expenses related to the acquisition of First Federal of Northern Michigan (FFNM) and pre-announcement diligence activity related to the pending Lincoln Community Bank (Lincoln) transaction.  Weighted average share count was increased by a common stock offering by the Corporation in June 2018 and the issuance of shares in the FFNM acquisition.

On May 18, 2018 the Corporation completed the acquisition of FFNM.  The Corporation issued 2,146,378 new shares as consideration for the purchase.   On June 15, 2018, the Corporation closed a common stock offering resulting in gross proceeds of roughly $34.50 million and net proceeds of roughly $32.40 million.  The Corporation issued 2,225,807 shares in connection with the stock offering.  As a result of the activities noted above, weighted average shares outstanding for the second quarter of 2018 were 7,041,010 compared to 6,294,930 for the same period of 2017 and 6,304,203 shares for the first quarter of 2018.

The Corporation still expects cost efficiencies from the FFNM acquisition and the pending Lincoln acquisition to be fully phased in by the end of 2018, however, the savings relating to FFNM were only partially integrated and realized in the second quarter of 2018. The Corporation completed a successful data processing conversion of FFNM over the weekend of July 13th. The Corporation expects the pending Lincoln acquisition to close end of third quarter or early in the fourth quarter subject to final regulatory approvals with a data conversion scheduled for mid-fourth quarter.

In connection with the acquisition, the Corporation had second quarter GAAP pre-tax transaction related expenses totaling $1.98 million.  These one-time costs reduced the reported net income for the quarter by $1.56 million on an after-tax basis.  The adjusted net income for the second quarter of 2018 (exclusive of the transaction related expenses) would equate to $1.96 million.   The majority of the expenses associated with the common stock offering were capitalized in accordance with GAAP.

Total assets of the Corporation at June 30, 2018 were $1.27 billion compared to $1.03 billion at June 30, 2017.  Shareholders’ equity at June 30, 2018 totaled $148.87 million, compared to $81.31 million on June 30, 2017. The tangible book value per share equated to $11.57 on June 30, 2018 compared to $11.72 per share a year ago.  Subsequent to receiving the proceeds from the stock offering, the Corporation paid down approximately $19.45 million in senior holding company debt in the second quarter.

The Corporation’s primary asset, mBank, recorded net income of $1.20 million in the second quarter of 2018, compared to $2.05 million for the same period in 2017.  Combined acquisition-related expenses totaled $1.45 million at the bank level, with an after-tax impact of $1.15 million. Adjusted core net income (exclusive of the expenses) for second quarter 2018 was $2.35 million.

Revenue

Total revenue of the corporation for the three months ended June 30, 2018 equated to $13.80 million compared to $11.66 million for the same period of 2017.  Total interest income was $12.94 million for the second quarter of 2018 and $10.87 for the same period in 2017.  The 2018 second quarter interest income included accretive yield of $284 thousand from combined credit mark accretion associated with acquisitions compared to 2017 same period of $351 thousand. The non-interest income portion of total revenue increased slightly year-over-year from $795 thousand in 2017 to $863 thousand in 2018, partially due to the positive impact of the FFNM acquisition.

Loan Production / Credit Risk

Total balance sheet loans at June 30, 2018 were $1.00 billion compared to June 30, 2017 balances of $811.08 million.  Total loans under management now reside at $1.34 billion which includes $334 million of service retained loans.  New loan production for the first half of 2018 was slightly behind previous year at $103 million with origination activity increasing in the second quarter, as expected.  Commercial originations accounted for $62 million, retail, predominantly mortgage, equated to $41 million. Commenting on new loan production and overall lending activities, Kelly W. George, President and CEO of mBank, stated, “Commercial loan production remains consistent with prior year with a continued competitive environment for the high-quality earning assets we originate. Based on steady deal flow since the FFNM acquisition date, we expect that the addition of the FFNM markets will have a positive impact on all types of originations for the second half of 2018 as the operational and cultural integration of this transaction has gone very well. Likewise, in-house mortgage production has ramped up in our more active summer months and is consistent with 2017 first half activity.  As we alluded to in our first quarter communications, we have seen the change in interest rates impact our secondary market origination, which is at about 70% of previous year levels.”

Nonperforming loans totaled $5.03 million, .50% of total loans at June 30, 2018 compared to $3.75 million, or .47%, of total loans at June 30, 2017.  The dollar amount increase in non-performing loans is the result of credits acquired in the FFNM transaction which were marked to market as part of the credit due diligence process.  Total loan delinquencies greater than 30 days resided at a nominal .89%, compared to .59% in the second quarter of 2017. Commenting on overall credit risk, Mr. George stated, “As expected, we saw a slight increase in our non-performing credit ratios following the FFNM acquisition.  Similar to previous transactions, we anticipate this will normalize over the coming quarters as we work to quickly resolve some of these acquired credits.  Overall, loan portfolio performance, both legacy mBank and acquired FFNM, remains strong with no material credit issues within any of the business segments. Purchase accounting marks from the previously acquired banks have continued to prove accurate, attaining expected accretion levels. The acquired loan portfolio from FFNM should provide accretive results to our bottom line and support in overall granularity and concentration levels from a macro perspective.”

Margin Analysis / Funding

Net interest income in the second quarter of 2018 resided at $10.81 million, or 4.26%, compared to $9.32 million, or 4.24%, in the second quarter of 2017.  Second quarter 2018 total interest expense was $2.13 million versus $1.55 million for the same period of 2017.  Of the $578 thousand interest expense increase from previous year, $333 thousand was attributable to interest on brokered CDs due to repricing experienced from normal maturities and renewals at market rates.  An additional $167 thousand of the total was a result of increased expense on our CD & IRA products due to some slightly higher rates offered for competitive reasons.  Total brokered deposits were $152 million at the end of June 2018, down from $217 million at June 30, 2017.  FHLB borrowings were up from $71 million to $92 million year-over-year as a result of liabilities acquired from FFNM.  The Corporation expects to opportunistically reduce these borrowings as they mature.  The collective $44 million net improvement in these combined wholesale funding categories was partially made possible by the complementary balance sheet and deposit base of FFNM.  Following the close of the FFNM acquisition, the Corporation sold roughly $46 million of the acquired investment portfolio to decrease its wholesale funding.

Mr. George stated, “We have been successful in maintaining our strong net interest margin in the rising rate environment, and each rate increase should have positive impact on the income generated from our loan portfolio.  With the lower cost core deposit base we acquired from FFNM, we have begun to reposition the balance sheet and remove some of the more volatile and higher cost wholesale funding sources that we have utilized in the past.  This repositioning should further stabilize our funding and position us very well on the liability side for the remainder of 2018 and decrease our relative funding costs. We will also continue to proactively monitor as to when a need could occur to move pricing up on our core transactional accounts due to expected market pressures, a challenge all banks will face this year. We have pivoted to a more offensive posture in terms of overall core deposit gathering initiatives within our branch network. At this time, our deposit beta remains strong at .08 when comparing the movement in the federal funds rate to the movement on our blended interest-bearing deposit rate.”

Noninterest Expense

Noninterest expense, at $11.08 million in the second quarter of 2018, increased $3.56 million from the second quarter 2017 total of $7.52 million. The expense variance from the second quarter of 2017 was heavily impacted by the $1.98 million in pre-tax transaction related expenses as well as the additional expense related to the larger bank platform following the FFNM closing, including additional salary, benefits and occupancy costs.  The Corporation still expects to realize the 40% cost efficiencies from the FFNM acquisition as originally projected and believes they will be fully phased in by the end of 2018.

Assets and Capital

Total assets of the Corporation at June 30, 2018 were $1.27 billion compared to $1.03 billion at June 30, 2017.  Shareholders’ equity at June 30, 2018 totaled $148.87 million, compared to $81.31 million on June 30, 2017. The tangible book value per share equated to $11.57 on June 30, 2018 compared to $11.72 per share a year ago.  Both the common stock offering and the FFNM acquisition had positive impacts on the Corporation’s overall capitalization and regulatory capital ratios.  Of the $32.4 net proceeds from the June 2018 common stock offering, the corporation utilized $19.45 million to retire senior holding company debt.  The Corporation is “well-capitalized” and the Bank is “well-capitalized” with total risk-based capital to risk weighted assets of 11.06% and 12.39%, respectively.

Paul D. Tobias, Chairman and Chief Executive Officer of the Corporation concluded, “We had a very busy and productive quarter with the closing of the FFNM transaction, the announcement of the Lincoln Community Bank acquisition and the successful common stock offering.  All three of these events are representative of our consistent strategy of asset growth and balance sheet strength while driving continually improving earnings metrics.  Both FFNM and Lincoln are accretive transactions that add strategic and complementary markets where we can grow organically.  The stock offering was completed at a minimal market price discount, strengthening our balance sheet and providing the capital we need to continue to execute our growth plans.  Further, the ability to put a considerable portion of the new capital to work through the reduction of senior holding company debt and the purchase of Lincoln allows us to quickly hurdle our cost of capital with the expected yield and savings from the activities.”

Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $1.25 billion 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 29 branch locations; eleven in the Upper Peninsula, ten in the Northern Lower Peninsula, one in Oakland County, Michigan, and seven in Northern Wisconsin.  The Corporation’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,” “view,” 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.

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LOAN PORTFOLIO AND CREDIT QUALITY

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MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES QUARTERLY FINANCIAL HIGHLIGHTS