NASDAQ: MFNC

Mackinac Financial CorporationAnnual MeetingMay 27, 2020

Forward-Looking Statements

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This presentation contains certain forward-looking statements. Words such as “anticipates,” “believes,” “estimates,”“expects,” “intends,” “should,” “will,” and variations of such words and similar expressions are intended to identifyforward-looking statements: as defined by the Private Securities Litigation Reform Act of 1995. These statements reflectmanagement’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 whatmay be expressed or forecasted in such forward-looking statements. Factors that could cause a difference includeamong others: the effects of the COVID-19 pandemic, particularly potentially negative effects on our customers,borrowers, third party service providers and our liquidity; changes in the national and local economies or marketconditions; 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, bankconsolidations, and other sources may not be fully realized at all or within specified time frames as well as other risksand uncertainties including but not limited to those detailed from time to time in filings of Mackinac with the Securitiesand Exchange Commission, including its Annual Report on Form 10-K filed on March 12, 2020 and its Quarterly Reporton Form 10-Q filed May 11, 2020. These and other factors may cause decisions and actual results to differ materiallyfrom 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 presentation.

Table of ContentsPage 4 Your Company

Page 11 COVID-19 Operating Update

Page 16 2020 1st Quarter Recap

Page 21 2019 Financial Recap

Page 26 Culture

Page 30 10-Year Review

Page 36 2020 Outlook

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Your Company

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Selected Financial Information

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All data as of 3/31/20

$1.4 billion

10,533,589

approximately 1,600

Steinhardt Capital Investors, LLLP

$10.45

$110 million

$1.1 billion

$1.3 billion

$999 million

$1.1 billion

Total assets:

Number of shares outstanding:

Number of shareholders:

Shareholders over 5%:

Stock price:

Market capitalization:

Total balance sheet loans:

Total loans under management:

Total bank deposits:

Total deposits:

Your CompanyMackinac Financial Corporation is a registered bank holding companyformed under the Bank Holding Company Act of 1956. The principalsubsidiary company is mBank. Headquartered in Manistique, MI, mBankhas a total of 29 branch locations throughout Michigan and NorthernWisconsin and current assets in excess of $1.4 billion. The company’sbanking services include commercial lending, asset-based lending,treasury management products, services geared toward small to mid-sizedbusinesses, and a full array of personal and business deposit products,consumer loans, mobile banking, online banking and bill pay.

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29 branch locations

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Our Markets

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mBankExecutive Management

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Board of Directors

Corporate Information

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COVID-19 Operating Update

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“The recent global health and economic related events,specifically the spread of the Coronavirus andsubsequent actions taken by the Federal Reserve,Treasury Department as well as Federal and Stategovernments, have led to a new level of challenges forall banks to navigate through in 2020. Both the primaryconcern regarding the health of our staff andcommunities and the financial aspect of maintainingappropriate balance sheet structure to achieve sustainedlevels of core earnings have become your managementteam’s daily focus. Simply put, with the health andsafety of our staff and communities at the forefront ofour operating decision making, we will diligentlycontinue to protect shareholder value while weoriginate good quality loans and provide timely andvalue added customer service to our clients and marketsthrough this uncertain and stressful period of economicunrest.”

COVID-19 Operating Update Upon the onset of the COVID-19 pandemic, management took proactive measures and moved quickly to implement protocols and adjust operations to continue to serve all constituencies.

i. When the Coronavirus crisis started to heighten around mid-March, we began to swiftly activate our pandemic response plan in each critical risk area of the bank.

ii. The initial step was to take precautionary health measures for the safety of our staff and clients at the banking centers given that our lobbies are where the most human interaction took place on a daily basis.

iii. We subsequently closed our lobby access in the middle of March and began serving clients who needed in-person transactions almost exclusively via drive-thru window.

iv. We are also heavily utilizing our phone, online and mobile service capacity as we engage in as little client and staff activity within the lobbies as possible and expect this protocol to continue into the near future.

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Other aspects of the pandemic response plan that were implemented or that we continue to refine are noted below:

v. Testing of various contingency funding sources and ensuring the Corporation is monitoring the inflows and outflows of cash throughout its balance sheet to make certain that adequate levels of liquidity are maintained.

vi. The establishment of a COVID-19 Task Force that meets several times a week. This task force is made up of executive-level managers and is designed to ensure that timely and prudent operating protocols are applied to enhance necessary oversight of mission critical risk areas and human resources.

vii. The rollout of a COVID-19 loan relief program consistent with prudent industry guidance to support our clients’ near term cash flow needs and assist both consumers and businesses, in various ways, that have been immediately adversely impacted. We have provided needed relief to approximately 20% of our loan base, with the majority of such relief supporting business clients in hospitality, tourism, gas stations and commercial real estate.

viii. Continual messaging and outreach to maintain staff and community confidence.

COVID-19 Operating Update

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COVID-19 Operating Update

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We had seen no signs of any adverse systemic issues or material deterioration in our loan portfolio prior to the COVID-19 pandemic. At the onset of COVID-19, we began to actively work to identify potential heightened industry and consumer exposure within the portfolio based on our footprint.

2020 1st Quarter Recap

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Financial Review

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i. The Corporation announced 2020 first quarter net income of $3.05 million, or $.28 per share.

ii. Weighted average shares outstanding for the first quarter of 2020 were 10,717,967. Total shares outstanding at the end of the first quarter were 10,533,589.

iii. mBank, the Corporation’s primary asset, recorded net income of $3.40 million for the first quarter of 2020.

iv. The Corporation repurchased 240,644 shares under its share repurchase program during the first quarter at an average price of $11.34. It has since paused its repurchase activity.

Financial Review

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v. Non-interest income was very solid for the quarter including secondary market mortgage fees of $538K and premiums on the sale of Small Business Administration (SBA) guaranteed loans of $710K.

vi. The residential mortgage pipeline resides at very robust levels and we expect strong output from this line of business as we look to upcoming quarters.

vii. Core operating margin, which is net of accretion from acquired loans that were subject to purchase accounting adjustments, was 4.32%.

viii. The first quarter provision for loan losses was $100 thousand. While this amount was consistent with past quarters, as a result of COVID-19, the qualitative factors for economic conditions were adjusted within the Allowance for Loan Losses (ALLL) calculation and methodology. The Corporation is not currently required to utilize CECL and management will actively refine the provision and loan reserves as client impact and broader economic data from the pandemic become more clear in the second quarter and beyond.

Financial Review

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ix. Both the Corporation and the Bank are “well-capitalized” with total risk-based capital to risk-weighted assets of 13.41% at the Corporation and 13.23% at the Bank and tier 1 capital to total tier 1 average assets at the Corporation of 10.20% and at the Bank of 10.06%.

x. The Corporation is monitoring the impact of the recent pandemic-associated market volatility on its Goodwill asset.

Payroll Protection Program Detail

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Though not reflected in the first quarter results, we once again demonstrated our commitment to our communities by being a state market leader in administering the SBA Payroll Protection Program (PPP) loans, where we funded approximately $164 million to over eleven hundred business’s to help ensure much needed continuity of the workforce in our more predominantly rural trade areas.

Footnote:

Average Loan Size: $139,500

Region Amount $ % of

Total $ # of

Clients% of Total #

of ClientsUpper Peninsula 62,985,260$ 38% 472 40%

Norther Lower Peninsula 49,430,840$ 30% 415 35%Southeast Michigan 32,543,950$ 20% 101 9%

Wisconsin 8,615,300$ 5% 175 15%mBank Business Credit 10,371,900$ 6% 12 1%

Total 163,947,250$ 100% 1175 100%

PPP Funded Loans: Breakdown by RegionAs of 5/15/20

2019 Financial Recap

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2019 Financial Recap

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Looking back at 2019, your company continued to execute its strategic plan:

• The Corporation successfully increased organic loan and deposit production andreduced reliance on more expensive wholesale funding.

• This collectively led to 2019 having our highest earnings of any year in the lastdecade, increased shareholder value and allowed for expansion of the dividend.

• Our earnings culminated with 2019 net income of $13.85 million and earnings pershare of $1.29.

Chart on next page

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Adjusted Earnings footnote:

2014 Peninsula Financial Corporation one-time transaction expenses. 2016 First National Bank of Eagle River and Niagara Bancorporation Inc. one-time transaction expenses. 2017 Deferred tax reallocation in light of new tax law. 2018 First Federal of Northern Michigan Bancorp, Inc. and Lincoln Community Bank one-time transaction expenses.

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Our net interest margin has continued to generally outperform peers at 4.39%... mainly attributed to our discipline and in-market pricing power of both loans and deposits. These dynamics, coupled with a high loan-to-deposit ratio of approximately 95%, allow for continued margin performance.

Margin Analysis 2019

Credit Quality 2019

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• Credit quality of the Corporation remains very solid.

• We remain vigilant to ensure continued stringent underwriting standards that are not influenced by competitor activities.

• We take great pride in building lastingrelationships with our loan clients to provide the best service and products fortheir unique companies in variouseconomic environments and stages of their business cycle.

• Government agencies such as the SBA andUSDA continue to play a role in helping usprovide capital to our communities tosupport new business activities andexpansion.

• These activities augment overall job growthand economic development initiativeswithin these predominantly rural andtraditionally underserved markets.

Culture

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Strengthening Our PresenceThrough building community

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Our focus shifted organically in 2019 to improving customers’ digital experience and strengthening our existing customer and community relationships through improved communication channels. This resulted in strengthening our overall presence to better serve all our communities throughout Michigan and Wisconsin.

WEBSITE REDESIGNIn June of 2019, we launched a new website.

CULTIVATING COMMUNITY ON SOCIAL MEDIAGreat progress was made bolstering and utilizing our social media channels, including Facebook and LinkedIn.

INCREASED FOCUS ON TREASURY MANAGEMENTConcentrated on cultivating and growing our Treasury Management services through investments in technology and leadership.

ADDED CUSTOMER CONVENIENCEmBank partnered with the Allpoint ATM network, adding over 55,000 surcharge-free ATMs to the mBank network.Continued efforts to increase mobile app adoption were successful in2019, giving customers a better banking experience on mobile devices.

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At mBank, we firmly believe in reinvesting in the areaswe serve. We are proud to support the hardworking people, businesses and communities we call home, through sponsorships, donations and our dedicated staff who volunteer hundreds of hours each year.

• Acquired for donation a historical building in downtown Manistique to find a new home for Lake Effects Arts, a 501(c)(3).

• Partnering with the Wisconsin Bankers Association for the Power of Community week, collecting non-perishable food items for donation and providing meals to individuals in need.

• Creating a “Home Sweet Home” campaign with UPAWS including making a donation to the organization for its new animal shelter, providing free adoption days to place animals in loving homes, and collecting hundreds of needed items to help care for animals in the shelter.

Reinvesting in our Communities

In 2019, we committed our time and resources to many causes, including:

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• Sponsoring the building of the Hematite Art Park to enhance student creativity in Ishpeming, MI.

• Sponsoring Thunder Bay Theatre with a corporate sponsorship allowing professional actors to give educational performances and workshops to schools throughout Northern Michigan free of charge.

• Sponsoring the UP200, one of American’s premier sled dog races, as a Lead Dog Sponsor. This event draws people from across the country and Canada to the Upper Peninsula and is an important part of its economy.

Reinvesting in our Communities

10-Year Review

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As we closed out 2019 and moved into a new decade, we wanted to reflect on theprevious ten years of performance given the large change in scale, ownership andnumber of communities that the Corporation serves. Your company was able to expand,both organically and through five whole-bank acquisitions, and drive significantlyimproved financial operating metrics while building a strong, well-capitalized balancesheet.

Key Highlights from 10-Year Performancei. Successful pivot from defensive sales and credit posture to offensive following therecession from 2008–2011 in terms of building scale.

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ii. Strong value creation over this 10-year period while minimizing and managing risk for overall sound governance.

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iii. Shareholder returns continue to grow in terms of tangible book value and dividend yields.

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iv. Organic drivers of value continue to remain consistent with new loan production and core deposit growth consistently reaching record levels.

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v. Strong balance sheet characteristics and solid operating fundamentals creating sustained earnings to mitigate loss of capital within another downturn.

2020 Outlook

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a. Understanding that capital planning and funds management have moved to the forefront with even greater emphasis to ensure shareholder value is protected.

b. A strict focus on maintaining the structural integrity of our balance sheet to sustain our strong margin and minimize earnings impact.

c. Protecting our credit book with proactive engagement with our loan clients utilizing all the internal resourceswe have available, as well as the external governmental sources that have been created through the recentpassing of various bills and legislation.

d. Continuing investment into technology to ensure our client data and overall information systems remain secure within this heightened fraudulent time.

e. Further enhancing remote and/or web-based products and services to assist more customers outside of our banking centers building on the initiatives we implemented in 2019, to improve the overall client experience.

While the longer-term social and economic impacts of the Coronavirus pandemic remain to be seen and areunpredictable as to when commerce will expand again, we move forward cautiously into 2020 with the following priorities:

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“With our collective success in 2019 and over the last 10 years of buildingshareholder value and supporting all our constituencies in the markets weoperate, we are now reminded every day how quickly life and our industrydynamics can change in light of COVID-19. We believe that patient anddeliberate market decisions and active monitoring of the national andcommunity specific economies will allow for continued positive executionof our strategy and sustainable core earnings through this “new normal”period operating within the COVID-19 environment. Once again, pleasestay healthy, stay positive, and we thank you for your patronage andcontinued support as shareholders.”

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