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Clarkston Financial Corporation Reports 2013 Q3 Results

CLARKSTON, Mich., Oct. 23, 2013 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $205,000 or $0.06 per share for the three months ended September 30, 2013, compared to net income of $126,000 or $0.04 per share for the three months ended September 30, 2012. For the nine months ended September 30, 2013, the corporation reported net income of $486,000 or $0.15 per share compared to a net income of $377,000 or $0.12 per share for the same period in 2012.

J. Grant Smith, CEO, said, "Our operating results continue to improve with each passing quarter. We are now looking forward to expanding our market share through deposit and loan opportunities. However, we are staying disciplined with our approach to credit despite the challenges of the local market."

Operating Results

The Corporation's net interest income increased to $1,275,000 for the quarter ended September 30, 2013 compared to $1,206,000 for the same period ended September 30, 2012. The net interest margin of the Bank showed a slight increase, ending at 4.78% for the quarter ended September 30, 2013, up from 4.59% for the quarter ended September 30, 2012.

Noninterest income had a decrease in the third quarter 2013, due to one-time gains recognized in the third quarter of 2012. The quarter ended at $161,000 compared to $204,000 for the quarter ended September 30, 2012, a decrease of $43,000 or 21.07%. Noninterest expense continued to decline year over year, ending the third quarter 2013 at $1,231,000 compared to $1,238,000 for the same period ended September 30, 2012, a decrease of $7,000 or 0.56%. The decrease represents a decline in the expense related to troubled loans.

Balance Sheet

Total assets at September 30, 2013 were $126,008,000 compared to $123,130,000 at September 30, 2012, an increase of $2,878,000 or 2.33%.

Total loans increased $12,376,000 from $91,279,000 at September 30, 2012 to $103,655,000 at September 30, 2013, an increase of 13.56%. Total deposits increased $759,000 or 0.67%, ending at $114,094,000 for September 30, 2013, up from $113,335,000 at September 30, 2012. Noninterest bearing demand deposits continued to increase, jumping $10,344,000 from September 2012 to September 2013, reflecting an increase of 30.06%.

Total stockholders' equity increased from $4,197,000 at September 30, 2012 to $5,947,000 at September 30, 2013, an increase of $1,750,000 or 41.69%. This increase is due to the net income in 2012 and 2013, mainly driven by the recapture of $1,500,000 in previously disallowed deferred tax assets in 2012.

Asset Quality

Total non-performing loans decreased to $816,000 at September 30, 2013 compared to $1,101,000 from the same period 2012, a decrease of $285,000, or 25.88%. The allowance for loan loss decreased to 2.25% of total loans as of September 30, 2013, compared to 2.71% for the same period 2012. Management continually monitors the allowance for loan loss to determine its adequacy.

Clarkston State Bank opened in January 1999 and operates four branches in Clarkston, Waterford, and Independence Township, Michigan.

Safe Harbor. This news release contains comments or information that constitute forward-looking statements within the context of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties. Actual results may differ materially from the results discussed in the forward-looking statements. Factors that may cause such a difference include: changes in interest rates and interest-rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior and their ability to repay loans; and changes in the national and local economy. The Corporation assumes no responsibility to update forward-looking statements.

CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars, in thousands)
(unaudited) (unaudited)
9/30/2013 12/31/2012 9/30/2012
Assets
Cash and due from banks $ 7,938 $ 14,517 $ 15,711
Securities – Available for sale 7,013 7,709 8,384
Federal Home Loan Bank stock, at cost 556 556 556
Loans 103,655 92,812 91,279
Allowance for possible loan losses (2,333) (2,438) (2,471)
Net loans 101,322 90,374 88,808
Banking premises and equipment 4,815 4,955 4,529
Deferred tax asset 1,534 1,513 --
Other real estate owned 2,436 3,431 4,689
Accrued interest receivable and other assets 394 449 453
Total assets $ 126,008 $ 123,504 $ 123,130
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Deposits
Noninterest-bearing demand deposits 44,748 38,552 34,404
Interest-bearing 69,346 73,914 78,931
Total deposits 114,094 112,466 113,335
Other Liabilities
Other borrowings 5,400 5,300 5,300
Accrued interest payable and other liabilities 567 290 297
Total liabilities 120,061 118,056 118,933
Stockholders' Equity
Common stock 11,908 11,908 11,908
Paid-in capital 11,789 11,789 11,789
Restricted stock - Unearned compensation (113) (167) (185)
Accumulated deficit (17,571) (18,057) (19,314)
Accumulated other comprehensive income (loss) (66) (25) (1)
Total stockholders' equity 5,947 5,448 4,197
Total liabilities and stockholders' equity $ 126,008 $ 123,504 $ 123,130

CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
9/30/2013 9/30/2012 9/30/2013 9/30/2012
Interest Income
Interest and fees on loans $ 1,399 $ 1,342 $ 4,077 $ 4,038
Interest on investment securities: 28 46 75 138
Interest on federal funds sold 4 7 14 17
Total interest income 1,431 1,395 4,166 4,193
Interest Expense
Deposits 69 111 233 365
Borrowings 87 78 257 233
Total interest expense 156 189 490 598
Net Interest Income 1,275 1,206 3,676 3,595
Provision for Possible Loan Losses -- 45 60 135
Net Interest Income after provision for possible loan losses 1,275 1,161 3,616 3,460
Noninterest Income
Service fees on loan and deposit accounts 131 129 404 373
Gain on sale of securities -- 16 -- 169
Loss on sale of other real estate owned -- (14) 44 (23)
Other 30 73 93 150
Total noninterest income 161 204 541 669
Noninterest Expense
Salaries and employee benefits 618 574 1,837 1,665
Occupancy 149 154 455 447
Advertising 21 23 60 62
Outside processing 138 135 415 415
Professional fees 97 80 251 313
FDIC insurance 47 68 143 194
Defaulted loan expense 59 117 192 356
Other 102 88 31 300
Total noninterest expense 1,231 1,239 3,671 3,752
Income/(Loss) before income taxes 205 126 486 377
Income Tax Benefit -- -- -- --
Net Income/(Loss) $ 205 $ 126 $ 486 $ 377

CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)
Quarter Ended
9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
MARKET DATA
Book value per share $ 1.83 $ 1.76 $ 1.71 $ 1.68 $ 1.29
Market value per share $ 5.05 $ 5.05 $ 5.10 $ 1.50 $ 5.50
Earnings per share - basic & diluted $ 0.06 $ 0.06 $ 0.03 $ 1.55 $ 0.04
Average basic shares outstanding 3,242,533 3,242,533 3,242,533 3,242,186 3,228,661
Average diluted shares outstanding 3,242,533 3,242,533 3,242,533 3,242,186 3,228,661
Period end common shares 3,242,533 3,242,533 3,242,533 3,242,186 3,242,186
PERFORMANCE RATIOS
Return on average assets 0.66% 0.59% 0.33% 4.23% 0.41%
Return on average equity 14.25% 12.93% 7.29% 123.59% 12.24%
Net interest margin - CSB 4.78% 4.72% 4.64% 4.65% 4.59%
Efficiency ratio 85.70% 84.91% 90.64% 114.20% 87.86%
Texas Ratio 25.11% 24.92% 29.66% 36.52% 48.98%
CAPITAL & LIQUIDITY
Tier 1 Leverage - CSB 8.59% 8.37% 8.29% 8.14% 7.69%
Tier 1 Risk Based Capital - CSB 9.56% 9.54% 9.51% 9.51% 9.33%
Total Risk Based Capital - CSB 10.82% 10.81% 10.78% 10.77% 10.59%
Loan to deposit ratio 90.85% 85.46% 90.29% 82.52% 80.54%
ASSET QUALITY
Gross loan charge-offs $ -- $ 236 $ 26 $ 136 $ 275
Net loan charge-offs $ (24) $ 211 $ (22) $ 78 $ 199
Allowance for loan and lease losses to total loans 2.25% 2.33% 2.55% 2.63% 2.71%
Nonperforming loans to total loans 0.79% 0.71% 0.77% 1.05% 1.21%
Nonperforming assets to total assets 2.58% 2.46% 3.09% 3.57% 4.70%

CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited) (unaudited)
CATEGORY 9/30/2013 12/31/2012 9/30/2012
Commercial Loans $ 13,616 $ 15,355 $ 13,152
Real Estate Mortgage Loans:
Commercial 81,291 66,725 66,567
1-4 Residential 6,239 6,977 7,479
Construction and other 2,387 3,521 3,820
Total mortgage loans on real estate 89,917 77,223 77,866
Consumer 122 234 261
Total Loans 103,655 92,812 91,279
Less: Allowance for loan losses (2,333) (2,438) (2,471)
Net Loans $ 101,322 $ 90,374 $ 88,808
(unaudited) (unaudited)
ASSET QUALITY 9/30/2013 12/31/2012 9/30/2012
Total nonaccrual loans $ 816 $ 969 $ 1,101
Total loans past due 90 days or more and still accruing -- 3 --
Total nonperforming loans 816 972 1,101
Other real estate owned 2,436 3,431 4,689
Total nonperforming assets $ 3,252 $ 4,403 $ 5,790

CONTACT: Media Contact: Clarkston Financial Corporation J. Grant Smith, CEO, 248-922-6945Source:Clarkston Financial Corporation