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Clarkston Financial Corporation Reports 2015 Q2 Results

CLARKSTON, Mich., July 23, 2015 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $216,000 or $0.07 per share for the three months ended June 30, 2015, compared to net income of $232,000 or $.07 per share for the three months ended June 30, 2014. For the six months ended June 30, 2015, the corporation reported a net income of $467,000 or $0.15 per share compared to a net income of $512,000 or $0.16 per share for the same period in 2014. During the first quarter 2015 the Corporation returned to booking a provision for income taxes. The pre-tax net income was $704,000 for the six months ended June 30, 2015. This represents an increase of $192,000 or 37.50% in pre-tax income year over year.

J. Grant Smith, CEO, said, "During the second quarter we successfully completed the closures of two of our retail branch offices. In addition, we have further enhanced our retail electronic delivery channels to meet the needs of our customers and the changing demographic of potential new customers who demand electronic delivery channels. The cost savings associated with these two closures will enhance our profitability and will allow us to better serve our current and prospective customers. The fundamentals of the Bank remain strong; low loan delinquency, very little non-performing loans and an excellent net interest margin are the catalyst for continued positive operating performance.”

Operating Results

The Corporation’s net interest income increased slightly to $1,353,000 for the quarter ended June 30, 2015 compared to $1,346,000 for the same period ended June 30, 2014. The net interest margin of the Bank remains elevated compared to peers, but continues to have compression, ending at 4.42% for the quarter ended June 30, 2015, down from 4.93% for the quarter ended June 30, 2014.

Noninterest income increased during the second quarter 2015. The quarter ended at $184,000 compared to $163,000 for the quarter ended June 30, 2014, an increase of $21,000 or 12.88%. Noninterest expense decreased, ending the second quarter 2015 at $1,214,000 compared to $1,277,000 for the same period ended June 30, 2014, a decrease of $63,000 or 4.93%.

Balance Sheet

Total assets at June 30, 2015 were $146,833,000 compared to $134,387,000 at June 30, 2014, an increase of $12,446,000 or 9.26%. The increase in assets is largely due to increases in noninterest-bearing demand deposits.

Total loans increased $9,519,000 from $110,379,000 at June 30, 2014 to $119,898,000 at June 30, 2015, an increase of 8.62%. Total deposits increased $10,847,000 or 9.31%, ending at $127,376,000 for June 30, 2015, up from $116,529,000 at June 30, 2014. Total stockholders’ equity increased from $11,613,000 at June 30, 2014 to $13,338,000 at June 30, 2015, an increase of $1,725,000 or 14.85%.

Asset Quality

Total non-performing loans increased to $200,000 at June 30, 2015 compared to $144,000 from the same period 2014, an increase of $56,000, or 38.89%. The allowance for loan loss decreased to 1.49% of total loans as of June 30, 2015, compared to 1.67% for the same period 2014. 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 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)
6/30/2015 12/31/2014 6/30/2014
Assets
Cash and due from banks $ 8,393 $ 11,908 $ 6,276
Securities – Available for sale 7,084 5,581 6,191
Federal Home Loan Bank stock, at cost 232 409 556
Loans 119,898 114,680 110,379
Allowance for possible loan losses (1,785) (1,873) (1,842)
Net loans 118,113 112,807 108,537
Banking premises and equipment 4,425 4,809 4,834
Deferred tax asset 6,572 6,793 6,077
Other real estate owned 1,396 1,396 1,396
Accrued interest receivable and other assets 618 676 520
Total assets $ 146,833 $ 144,379 $ 134,387
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing demand deposits 53,121 52,919 44,841
Interest-bearing 74,255 72,449 71,688
Total deposits 127,376 125,368 116,529
Other Liabilities
Other borrowings 5,724 5,625 5,300
Accrued interest payable and other liabilities 395 497 945
Total liabilities 133,495 131,490 122,774
Stockholders' Equity
Common stock 11,945 11,917 11,917
Paid-in capital 11,826 11,798 11,798
Restricted stock - Unearned compensation (51) (24) (60)
Accumulated deficit (10,351) (10,819) (12,043)
Accumulated other comprehensive (loss) income (31) 17 1
Total stockholders' equity 13,338 12,889 11,613
Total liabilities and stockholders' equity $ 146,833 $ 144,379 $ 134,387


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited) (unaudited)
(Dollars, in thousands)Three Months Ended Six Months Ended
6/30/2015 6/30/2014 6/30/2015 6/30/2014
Interest Income
Interest and fees on loans$ 1,445 $ 1,445 $ 2,878 $ 2,870
Interest on investment securities: 32 33 69 75
Interest on federal funds sold 5 2 9 3
Total interest income 1,482 1,480 2,956 2,948
Interest Expense
Deposits 56 51 108 105
Borrowings 73 83 164 167
Total interest expense 129 134 272 272
Net Interest Income 1,353 1,346 2,684 2,676
Provision for Possible Loan Losses - - - -

Net Interest Income after provision for possible loan losses
1,353 1,346 2,684 2,676
Noninterest Income
Service fees on loan and deposit accounts 123 136 237 259
Gain on sale of securities 34 - 34 -
Loss on sale of other real estate owned - (3) - (3)
Other 27 30 363 184
Total noninterest income 184 163 634 440
Noninterest Expense
Salaries and employee benefits 694 695 1,522 1,425
Occupancy 147 146 297 289
Advertising 31 19 59 39
Outside processing 113 118 230 244
Professional fees 41 99 95 176
FDIC insurance 23 32 46 80
Defaulted loan expense 33 38 86 87
Other 132 130 279 264
Total noninterest expense 1,214 1,277 2,614 2,604
Income before income taxes 323 232 704 512
Income Tax Expense 107 - 237 -
Net Income$ 216 $ 232 $ 467 $ 512


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)
Quarter Ended
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
MARKET DATA
Book value per share $ 4.09 $ 4.04 $ 3.97 $ 3.67 $ 3.58
Market value per share $ 3.32 $ 4.00 $ 3.77 $ 4.35 $ 4.30
Earnings per share - basic & diluted $ 0.07 $ 0.08 $ 0.29 $ 0.09 $ 0.07
Period end common shares 3,261,156 3,261,156 3,246,156 3,246,156 3,246,156
PERFORMANCE RATIOS
Return on average assets 0.59% 0.69% 2.59% 0.87% 0.70%
Return on average assets - CSB 0.74% 0.94% 2.47% 1.21% 1.11%
Return on average equity 6.52% 7.81% 30.80% 10.21% 8.13%
Return on average equity - CSB 6.04% 7.82% 21.05% 9.82% 8.92%
Net interest margin - CSB 4.42% 4.43% 4.50% 4.71% 4.93%
Efficiency ratio 79.00% 78.59% 82.80% 80.84% 84.64%
Texas Ratio 11.60% 11.59% 11.10% 11.40% 11.36%
CAPITAL & LIQUIDITY
Tier 1 Leverage - CSB 8.55% 8.71% 8.78% 8.82% 9.30%
Common Equity Tier 1 Capital - CSB 9.18% 9.84% - - -
Tier 1 Risk Based Capital - CSB 9.18% 9.84% 9.68% 9.52% 9.82%
Total Risk Based Capital - CSB 10.43% 11.10% 10.93% 10.77% 11.08%
Loan to deposit ratio 94.13% 88.83% 91.47% 91.23% 94.72%
ASSET QUALITY
Gross loan charge-offs $ 3 $ 249 $ - $ 11 $ -
Net loan charge-offs (recoveries) $ (14) $ 101 $ (20) $ (12) $ (20)
Allowance for loan and lease losses to total loans 1.49% 1.55% 1.63% 1.65% 1.67%
Nonperforming loans to total loans 0.17% 0.19% 0.13% 0.13% 0.13%
Nonperforming assets to total assets 1.09% 1.09% 1.07% 1.09% 1.15%


CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited) (unaudited)
CATEGORY6/30/2015 12/31/2014 6/30/2014
Commercial Loans$ 12,895 $ 13,737 $ 13,474
Real Estate Mortgage Loans:
Commercial 97,608 91,496 86,389
1-4 Residential 4,592 5,086 5,601
Construction and other 1,417 4,136 4,770
Total mortgage loans on real estate 103,617 100,718 96,760
Consumer 3,386 225 145
Total Loans 119,898 114,680 110,379
Less: Allowance for loan losses (1,785) (1,873) (1,842)
Net Loans$ 118,113 $ 112,807 $ 108,537
(unaudited) (unaudited)
ASSET QUALITY6/30/2015 12/31/2014 6/30/2014
Total nonaccrual loans$ 200 $ 144 $ 144
Total loans past due 90 days or more and still accruing - - -
Total nonperforming loans 200 144 144
Other real estate owned 1,396 1,396 1,396
Total nonperforming assets$ 1,596 $ 1,540 $ 1,540


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

Source:Clarkston Financial Corporation