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Clarkston Financial Corporation Reports 2015 Q1 Results

CLARKSTON, Mich., April 23, 2015 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $252,000 or $0.08 per share for the three months ended March 31, 2015, compared to net income of $280,000 or $0.09 per share for the three months ended March 31, 2014. During the first quarter the Corporation returned to booking a provision for income taxes. The pre-tax net income was $382,000 for the quarter ended March 31, 2015. This represents an increase of $102,000 or 36.43% in pre-tax income year over year.

J. Grant Smith, CEO, said, "We are pleased with the results of our first quarter. Although loan originations were light we have a good pipeline of new loan business we expect to close in the second quarter. In addition, our deposit gathering efforts remain robust. We continue to maintain an excellent mix of deposits which is the catalyst for the Bank's excellent net interest margin of 4.43%. We are very optimistic our financial performance will be very good the remainder of the year as the impact of closing two of our offices will lower operating expenses and increase efficiencies."

Operating Results

The Corporation's net interest income remained steady, increasing slightly to $1,331,000 for the quarter ended March 31, 2015 compared to $1,330,000 for the same period ended March 31, 2014. The net interest margin of the Bank remains elevated compared to peers, but has realized some compression, ending at 4.43% for the quarter ended March 31, 2015, down from 5.03% for the quarter ended March 31, 2014.

Noninterest income increased in the first quarter 2015. The quarter ended at $451,000 compared to $278,000 for the quarter ended March 31, 2014, an increase of $173,000 or 62.23%. This increase was largely driven by the sale of the Bank's downtown Clarkston office which was sold in March as part of the plan to close the branch on April 17, 2015. Noninterest expense increased, ending the first quarter 2015 at $1,400,000 compared to $1,328,000 for the same period ended March 31, 2014, an increase of $72,000 or 5.42%.

Balance Sheet

Total assets at March 31, 2015 were $147,639,000 compared to $132,990,000 at March 31, 2014, an increase of $14,649,000 or 11.02%. The increase in total assets represents an increase in cash as a result of an increase in noninterest bearing demand deposits.

Gross loans increased $8,799,000 from $105,146,000 at March 31, 2014 to $113,945,000 at March 31, 2015, an increase of 8.37%. Total deposits increased $12,770,000 or 11.06%, ending at $128,268,000 for March 31, 2015, up from $115,498,000 at March 31, 2014. Total stockholders' equity increased from $11,311,000 at March 31, 2014 to $13,165,000 at March 31, 2015, an increase of $1,854,000 or 16.39%.

Asset Quality

Total non-performing loans increased to $219,000 at March 31, 2015 compared to $144,000 from the same period in 2014, an increase of $75,000, or 52.08%. The allowance for loan loss decreased to 1.55% of total loans as of March 31, 2015, compared to 1.73% for the same period in 2014. Management continually monitors the allowance for loan loss to determine its adequacy.

Clarkston State Bank opened in January 1999 and operates two branches in Clarkston and Waterford, 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)
3/31/2015 12/31/2014 3/31/2014
Assets
Cash and due from banks $14,473 $11,908 $9,644
Securities – Available for sale 7,441 5,581 6,421
Federal Home Loan Bank stock, at cost 409 409 556
Loans 113,945 114,680 105,146
Allowance for possible loan losses (1,771) (1,873) (1,821)
Net loans 112,174 112,807 103,325
Banking premises and equipment 4,436 4,809 4,870
Deferred tax asset 6,663 6,793 6,103
Other real estate owned 1,396 1,396 1,506
Accrued interest receivable and other assets 647 676 565
Total assets $147,639 $144,379 $132,990
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing demand deposits 52,367 52,919 46,792
Interest-bearing 75,901 72,449 68,706
Total deposits 128,268 125,368 115,498
Other Liabilities
Other borrowings 5,775 5,625 5,300
Accrued interest payable and other liabilities 431 497 881
Total liabilities 134,474 131,490 121,679
Stockholders' Equity
Common stock 11,945 11,917 11,917
Paid-in capital 11,826 11,798 11,798
Restricted stock - Unearned compensation (60) (24) (77)
Accumulated deficit (10,567) (10,819) (12,275)
Accumulated other comprehensive income (loss) 21 17 (52)
Total stockholders' equity 13,165 12,889 11,311
Total liabilities and stockholders' equity $147,639 $144,379 $132,990
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited)
Three Months Ended
3/31/2015 3/31/2014
Interest Income
Interest and fees on loans $1,433 $1,425
Interest on investment securities: 37 42
Interest on federal funds sold 5 1
Total interest income 1,475 1,468
Interest Expense
Deposits 53 54
Borrowings 91 84
Total interest expense 144 138
Net Interest Income 1,331 1,330
Provision for Possible Loan Losses -- --
Net Interest Income after provision for possible loan losses 1,331 1,330
Noninterest Income
Service fees on loan and deposit accounts 114 123
Other 337 155
Total noninterest income 451 278
Noninterest Expense
Salaries and employee benefits 828 730
Occupancy 150 143
Advertising 28 20
Outside processing 118 126
Professional fees 55 77
FDIC insurance 23 48
Defaulted loan expense 53 49
Other 145 135
Total noninterest expense 1,400 1,328
Income before income taxes 382 280
Income Tax Expense 130 --
Net Income $252 $280
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)
Quarter Ended
3/31/2015 12/31/2014 9/30/2014 6/30/2014 3/31/2014
MARKET DATA
Book value per share $4.04 $3.97 $3.67 $3.58 $3.48
Market value per share $4.00 $3.77 $4.35 $4.30 $4.60
Earnings per share - basic & diluted $0.08 $0.29 $0.09 $0.07 $0.09
Period end common shares 3,261,156 3,246,156 3,246,156 3,246,156 3,246,156
PERFORMANCE RATIOS
Return on average assets 0.69% 2.59% 0.87% 0.70% 0.87%
Return on average assets - CSB 0.94% 2.47% 1.21% 1.11% 1.29%
Return on average equity 7.81% 30.80% 10.21% 8.13% 10.06%
Return on average equity - CSB 7.82% 21.05% 9.82% 8.92% 10.49%
Net interest margin - CSB 4.43% 4.50% 4.71% 4.93% 5.03%
Efficiency ratio 78.59% 82.80% 80.84% 84.64% 82.60%
Texas Ratio 11.59% 11.10% 11.40% 11.36% 12.54%
CAPITAL & LIQUIDITY
Tier 1 Leverage - CSB 8.71% 8.78% 8.82% 9.30% 9.17%
Common Equity Tier 1 Capital - CSB 9.84% -- -- -- --
Tier 1 Risk Based Capital - CSB 9.84% 9.68% 9.52% 9.82% 9.96%
Total Risk Based Capital - CSB 11.10% 10.93% 10.77% 11.08% 11.21%
Loan to deposit ratio 88.83% 91.47% 91.23% 94.72% 91.04%
ASSET QUALITY
Gross loan charge-offs $249 $ -- $11 $ -- $25
Net loan charge-offs (recoveries) $101 $ (20) $ (12) $ (20) $ --
Allowance for loan and lease losses to total loans 1.55% 1.63% 1.65% 1.67% 1.73%
Nonperforming loans to total loans 0.19% 0.13% 0.13% 0.13% 0.14%
Nonperforming assets to total assets 1.09% 1.07% 1.09% 1.15% 1.24%
CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited) (unaudited)
CATEGORY 3/31/2015 12/31/2014 3/31/2014
Commercial Loans $11,852 $13,737 $11,760
Real Estate Mortgage Loans:
Commercial 91,430 91,496 83,237
1-4 Residential 4,794 5,086 5,881
Construction and other 3,723 4,136 4,108
Total mortgage loans on real estate 99,947 100,718 93,226
Consumer 2,146 225 160
Total Loans 113,945 114,680 105,146
Less: Allowance for loan losses (1,771) (1,873) (1,821)
Net Loans $112,174 $112,807 $103,325
(unaudited) (unaudited)
ASSET QUALITY 3/31/2015 12/31/2014 3/31/2014
Total nonaccrual loans $219 $144 $144
Total loans past due 90 days or more and still accruing -- -- --
Total nonperforming loans 219 144 144
Other real estate owned 1,396 1,396 1,506
Total nonperforming assets $1,615 $1,540 $1,650

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