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Clarkston Financial Corporation Reports 2015 Q3 Results

CLARKSTON, Mich., Oct. 29, 2015 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $336,000 or $0.10 per share for the three months ended September 30, 2015, compared to net income of $299,000 or $0.09 per share for the three months ended September 30, 2014. For the nine months ended September 30, 2015, the corporation reported a net income of $803,000 or $0.25 per share compared to a net income of $811,000 or $0.25 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 $1,204,000 for the nine months ended September 30, 2015. This represents an increase of $393,000 or 32.64% in pre-tax income year over year.

J. Grant Smith, CEO, said, "Our asset quality fundamentals have improved greatly over the past several years and we are now in the growth phase of our strategic plan. The following performance numbers outline very nice growth in both loans and deposits, 9.17% and 11.20%, respectively. While our net interest margin has declined it still remains well above our peer group at 4.41%. The main catalyst for our excellent net interest margin is our core deposit base. Non-interest bearing deposits represents 45.7% of our total deposits. On another positive note, as a result of the closure of two of our facilities earlier this year the use of our mobile banking products is up 36% as more customers are reaching us through our electronic delivery channels. The excellent balance sheet fundamentals when combined a strong net interest margin we believe will continue to enhance our operating performance going forward.”

Operating Results

The Corporation’s net interest income increased to $1,421,000 for the quarter ended September 30, 2015 compared to $1,366,000 for the same period ended September 30, 2014. The net interest margin of the Bank remains elevated compared to peers, but continues to have compression, ending at 4.41% for the quarter ended September 30, 2015, down from 4.71% for the quarter ended September 30, 2014.

Noninterest income increased during the second quarter 2015. The quarter ended at $326,000 compared to $194,000 for the quarter ended September 30, 2014, an increase of $132,000 or 68.04%. Noninterest expense decreased slightly, ending the third quarter 2015 at $1,247,000 compared to $1,261,000 for the same period ended September 30, 2014, a decrease of $14,000 or 1.11%.

Balance Sheet

Total assets at September 30, 2015 were $156,777,000 compared to $141,587,000 at September 30, 2014, an increase of $15,190,000 or 10.73%. The increase in assets is largely due to increases in noninterest-bearing demand deposits.

Net loans increased $10,125,000 from $110,461,000 at September 30, 2014 to $120,586,000 at September 30, 2015, an increase of 9.17%. Total deposits increased $13,787,000 or 11.20%, ending at $136,897,000 for September 30, 2015, up from $123,110,000 at September 30, 2014. Total stockholders’ equity increased from $11,921,000 at September 30, 2014 to $13,672,000 at September 30, 2015, an increase of $1,751,000 or 14.69%.

Asset Quality

Total non-performing loans were zero at September 30, 2015 compared to $144,000 from the same period 2014. The allowance for loan loss decreased to 1.47% of total loans as of September 30, 2015, compared to 1.65% 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 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)
9/30/2015 12/31/2014 9/30/2014
Assets
Cash and due from banks $ 16,272 $ 11,908 $ 11,874
Securities – Available for sale 6,764 5,581 5,828
Federal Home Loan Bank stock, at cost 232 409 556
Loans 122,387 114,680 112,314
Allowance for possible loan losses (1,801) (1,873) (1,853)
Net loans 120,586 112,807 110,461
Banking premises and equipment 4,426 4,809 4,851
Deferred tax asset 6,400 6,793 6,077
Other real estate owned 1,396 1,396 1,396
Accrued interest receivable and other assets 701 676 544
Total assets $ 156,777 $ 144,379 $ 141,587
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing demand deposits 62,585 52,919 54,052
Interest-bearing 74,312 72,449 69,058
Total deposits 136,897 125,368 123,110
Other Liabilities
Other borrowings 5,673 5,625 5,625
Accrued interest payable and other liabilities 535 497 931
Total liabilities 143,105 131,490 129,666
Stockholders' Equity
Common stock 11,945 11,917 11,917
Paid-in capital 11,826 11,798 11,798
Restricted stock - Unearned compensation (48) (24) (42)
Accumulated deficit (10,016) (10,819) (11,744)
Accumulated other comprehensive (loss) income (35) 17 (8)
Total stockholders' equity 13,672 12,889 11,921
Total liabilities and stockholders' equity $ 156,777 $ 144,379 $ 141,587


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited)
(unaudited)
Three Months Ended
Nine Months Ended
9/30/2015 9/30/2014
9/30/2015 9/30/2014
Interest Income
Interest and fees on loans$1,493 $1,466 $4,370 $4,336
Interest on investment securities: 37 31 106 106
Interest on federal funds sold 2 2 12 5
Total interest income 1,532 1,499 4,488 4,447
Interest Expense
Deposits 52 53 160 157
Borrowings 59 80 223 248
Total interest expense 111 133 383 405
Net Interest Income 1,421 1,366 4,105 4,042
Provision for Possible Loan Losses - - - -
Net Interest Income after provision for possible loan losses 1,421 1,366 4,105 4,042
Noninterest Income
Service fees on loan and deposit accounts 118 132 355 391
Gain on sale of securities - - 34 -
Loss on sale of other real estate owned - - - (3)
Other 208 62 571 246
Total noninterest income 326 194 960 634
Noninterest Expense
Salaries and employee benefits 701 710 2,223 2,135
Occupancy 117 142 414 431
Advertising 19 24 78 63
Outside processing 105 118 336 362
Professional fees 57 69 152 244
FDIC insurance 26 41 71 121
Defaulted loan expense 86 31 172 118
Other 136 126 415 391
Total noninterest expense 1,247 1,261 3,861 3,865
Income/(Loss) before income taxes 500 299 1,204 811
Income Tax Benefit 164 - 401 -
Net Income/(Loss)$ 336 $ 299 $803 $811


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)
Quarter Ended
9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014
MARKET DATA
Book value per share $ 4.19 $ 4.09 $ 4.04 $ 3.97 $ 3.67
Market value per share $ 4.30 $ 3.32 $ 4.00 $ 3.77 $ 4.35
Earnings per share - basic & diluted $ 0.10 $ 0.07 $ 0.08 $ 0.29 $ 0.09
Period end common shares 3,261,156 3,261,156 3,261,156 3,246,156 3,246,156
PERFORMANCE RATIOS
Return on average assets 0.91% 0.59% 0.69% 2.59% 0.87%
Return on average equity 9.99% 6.52% 7.81% 30.80% 10.21%
Net interest margin - CSB 4.41% 4.42% 4.43% 4.50% 4.71%
Efficiency ratio 71.40% 79.00% 78.59% 82.80% 80.84%
Texas Ratio 9.72% 11.60% 11.59% 11.10% 11.40%
CAPITAL & LIQUIDITY
Tier 1 Leverage - CSB 8.85% 8.55% 8.71% 8.78% 8.82%
Common Equity Tier 1 Capital - CSB 9.15% 9.18% 9.84% - -
Tier 1 Risk Based Capital - CSB 9.15% 9.18% 9.84% 9.68% 9.52%
Total Risk Based Capital - CSB 10.40% 10.43% 11.10% 10.93% 10.77%
Loan to deposit ratio 89.40% 94.13% 88.83% 91.47% 91.23%
ASSET QUALITY
Gross loan charge-offs $ - $ 3 $ 249 $ - $ 11
Net loan charge-offs (recoveries) $ (16) $ (14) $ 101 $ (20) $ (12)
Allowance for loan and lease losses
to total loans
1.47% 1.49% 1.55% 1.63% 1.65%
Nonperforming loans to total loans 0.00% 0.17% 0.19% 0.13% 0.13%
Nonperforming assets to total assets 0.89% 1.09% 1.09% 1.07% 1.09%


CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited) (unaudited)
CATEGORY9/30/2015 12/31/2014 9/30/2014
Commercial Loans$ 12,529 $ 13,737 $ 12,182
Real Estate Mortgage Loans:
Commercial 99,476 91,496 90,782
1-4 Residential 4,334 5,086 5,585
Construction and other 1,389 4,136 3,565
Total mortgage loans on real estate 105,199 100,718 99,932
Consumer 4,659 225 200
Total Loans 122,387 114,680 112,314
Less: Allowance for loan losses (1,801) (1,873) (1,853)
Net Loans$ 120,586 $ 112,807 $ 110,461
(unaudited) (unaudited)
ASSET QUALITY9/30/2015 12/31/2014 9/30/2014
Total nonaccrual loans$ - $ 144 $ 144
Total loans past due 90 days or more and still accruing - - -
Total nonperforming loans - 144 144
Other real estate owned 1,396 1,396 1,396
Total nonperforming assets$ 1,396 $ 1,540 $ 1,540


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

Source:Clarkston Financial Corporation