Clarkston Financial Corporation Reports 2016 Q4 Results

CLARKSTON, Mich., Feb. 01, 2017 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $512,000 or $0.16 per share for the three months ended December 31, 2016, compared to net income of $227,000 or $0.07 per share for the three months ended December 31, 2015. For the twelve months ended December 31, 2016, the corporation reported a net income of $1,393,000 or $0.43 per share compared to a net income of $1,030,000 or $0.32 per share for the same period in 2015.

J. Grant Smith, CEO, said, "We are executing our plan to reduce costs and improve our loan out-standings while at the same time keeping our asset quality well below peer levels. Our excellent balance sheet fundamentals when combined with a good net interest margin and lower operating costs have now positioned the bank to perform at a high level. Our efficiency ratio has improved significantly and will have a very positive impact on our performance as we move forward.”

Operating Results

The Corporation’s net interest income increased to $1,695,000 for the quarter ended December 31, 2016 compared to $1,409,000 for the same period ended December 31, 2015. The Bank’s net interest margin remains very good compared to peers ending at 4.12% for the quarter ended December 31, 2016, down from 4.29% for the quarter ended December 31, 2015. The net interest margin benefits from the very good deposit mix of which demand deposits represents 50.8% of total deposits.

Noninterest income increased during the fourth quarter 2016. The quarter ended at $243,000 compared to $(95,000) for the quarter ended December 31, 2015, an increase of $338,000 or 355.79%. The increase in noninterest income is attributable to increased fee income and gains on the sale of both loans and securities. Noninterest expense decreased, ending the fourth quarter 2016 at $1,107,000 compared to $1,246,000 for the same period ended December 31, 2015, a decrease of $139,000 or 11.16%. The decline in noninterest expense has helped to improve the Corporation’s efficiency ratio, ending the quarter at 57.12% compared to 94.80% at December 31, 2015.

Balance Sheet

Total assets at December 31, 2016 were $179,007,000 compared to $172,302,000 at December 31, 2015, an increase of $6,705,000 or 3.89%. The increase in assets is largely due to the increase in deposits throughout the year.

Net loans increased $24,620,000 from $125,499,000 at December 31, 2015 to $150,119,000 at December 31, 2016, an increase of 19.62%. Total deposits increased $5,475,000 or 3.59%, ending at $157,842,000 for December 31, 2016, up from $152,367,000 at December 31, 2015. Total stockholders’ equity increased from $13,893,000 at December 31, 2015 to $15,189,000 at December 31, 2016, an increase of $1,296,000 or 9.33%.

Asset Quality

The Bank continues to have excellent asset quality and has no non-performing loans at December 31, 2016. The allowance for loan loss decreased slightly to 1.16% of total loans as of December 31, 2016, compared to 1.20% for the same period 2015. 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)
12/31/2016 12/31/2015
Assets
Cash and due from banks $ 9,004 $ 24,264
Securities – Available for sale 8,481 9,649
Federal Home Loan Bank stock, at cost 232 232
Loans 151,887 127,028
Allowance for possible loan losses (1,767) (1,529)
Net loans 150,119 125,499
Banking premises and equipment 3,682 3,915
Deferred tax asset 5,595 6,299
Other real estate owned 1,221 1,581
Accrued interest receivable and other assets 674 863
Total assets $ 179,007 $ 172,302
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing demand deposits 80,217 82,408
Interest-bearing 77,625 69,959
Total deposits 157,842 152,367
Other Liabilities
Other borrowings 5,416 5,621
Accrued interest payable and other liabilities 560 421
Total liabilities 163,818 158,409
Stockholders' Equity
Common stock 11,923 11,945
Paid-in capital 11,804 11,826
Restricted stock - Unearned compensation 0 (45)
Accumulated deficit (8,396) (9,789)
Accumulated other comprehensive income (loss) (141) (45)
Total stockholders' equity 15,189 13,893
Total liabilities and stockholders' equity $ 179,007 $ 172,302


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited) (unaudited)
Three Months Ended Twelve Months Ended
12/31/2016 12/31/2015 12/31/2016 12/31/2015
Interest Income
Interest and fees on loans$1,768 $1,483 $6,693 $5,853
Interest on investment securities: 40 42 189 149
Interest on federal funds sold 6 5 46 17
Total interest income 1,814 1,530 6,928 6,019
Interest Expense
Deposits 54 48 183 208
Borrowings 65 72 261 295
Total interest expense 119 120 445 504
Net Interest Income 1,695 1,409 6,484 5,515
Provision for Possible Loan Losses 20 (275) 50 (275)
Net Interest Income after provision for possible loan losses 1,675 1,684 6,434 5,790
Noninterest Income
Service fees on loan and deposit accounts 124 159 491 513
Gain on sale of securities 12 0 12 34
Loss on sale of other real estate owned 0 (275) (14) (275)
Other 108 21 247 593
Total noninterest income 243 (95) 736 865
Noninterest Expense
Salaries and employee benefits 630 697 2,906 2,919
Occupancy 124 141 496 555
Advertising (5) 29 101 107
Outside processing 117 128 473 464
Professional fees 54 56 193 208
FDIC insurance 21 27 106 98
Defaulted loan expense 29 41 154 213
Other 138 129 515 543
Total noninterest expense 1,107 1,246 4,945 5,108
Income/(Loss) before income taxes 811 343 2,225 1,547
Income Tax Expense 299 116 833 517
Net Income/(Loss)$512 $227 $1,393 $1,030


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)Quarter Ended
12/31/20169/30/20166/30/20163/31/201612/31/2015
MARKET DATA
Book value per share $ 4.67 $ 4.55 $ 4.44 $ 4.33 $ 4.26
Market value per share $ 5.25 $ 3.95 $ 3.85 $ 4.00 $ 3.70
Earnings per share - basic & diluted $ 0.16 $ 0.11 $ 0.11 $ 0.06 $ 0.07
Period end common shares 3,249,156 3,261,156 3,261,156 3,261,156 3,261,156
PERFORMANCE RATIOS
Return on average assets 1.14% 0.84% 0.71% 0.46% 0.57%
Return on average equity 10.66% 10.17% 8.88% 5.64% 6.62%
Net interest margin - CSB 4.12% 4.13% 4.15% 4.29% 4.29%
Efficiency ratio 57.12% 65.89% 71.65% 80.97% 94.80%
Texas Ratio 6.32% 7.32% 7.57% 10.15% 10.90%
CAPITAL & LIQUIDITY
Tier 1 Leverage - CSB 8.94% 8.76% 8.38% 8.40% 8.46%
Common Equity Tier 1 Capital - CSB 9.90% 9.50% 9.67% 9.57% 9.09%
Tier 1 Risk Based Capital - CSB 9.90% 9.50% 9.67% 9.57% 9.09%
Total Risk Based Capital - CSB 11.01% 10.50% 10.70% 10.62% 10.36%
Loan to deposit ratio 96.23% 97.10% 89.11% 84.65% 83.37%
ASSET QUALITY
Gross loan charge-offs $ 0 $ 0 $ 0 $ 14 $ 0
Net loan charge-offs (recoveries) $ (170)$ (5)$ (14)$ (16)$ (3)
Allowance for loan and lease losses to total loans 1.16% 1.07% 1.12% 1.12% 1.20%
Nonperforming loans to total loans 0.00% 0.00% 0.00% 0.00% 0.00%
Nonperforming assets to total assets 0.68% 0.69% 0.69% 0.87% 0.92%


CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited)
CATEGORY12/31/2016 12/31/2015
Commercial Loans$18,781 $14,126
Real Estate Mortgage Loans:
Commercial 118,838 102,098
1-4 Residential 3,036 4,077
Construction and other 2,468 1,369
Total mortgage loans on real estate 124,341 107,544
Consumer 8,765 5,358
Total Loans 151,887 127,028
Less: Allowance for loan losses (1,767) (1,529)
Net Loans$150,119 $125,499
(unaudited)
ASSET QUALITY12/31/2016 12/31/2015
Total nonaccrual loans$0 $0
Total loans past due 90 days or more and still accruing 0 0
Total nonperforming loans 0 0
Other real estate owned 1,221 1,581
Total nonperforming assets$1,221 $1,581


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

Source:Clarkston Financial Corporation