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Clarkston Financial Corporation Reports 2017 Q3 Results

CLARKSTON, Mich., Oct. 30, 2017 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) - (News), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $407,000 or $0.13 per share for the three months ended September 30, 2017, compared to net income of $371,000 or $0.11 per share for the three months ended September 30, 2016. For the nine months ended September 30, 2017, the corporation reported net income of $1,541,000 or $0.47 per share compared to net income of $881,000 or $0.27 per share for the same period in 2016.

J. Grant Smith, CEO, said, "Our performance continues to outpace the prior quarter as well as year over year. Our team is working very diligently while maintaining discipline with both expense control and loan portfolio concentrations. We are continuing with our efforts to lower our concentration in investor real estate while at the same time improving our regulatory capital. Both our efficiency and noninterest expense ratios at the Bank are lower than our peers. We are continuing with our strategic plan which calls for the Bank to lower our investor real estate concentration levels, increase regulatory capital and outperform our peers when it comes to expense control. Our financial results for the past quarter reflects the efforts of our team and the precise execution of our strategy. We expect more of the same execution as we move throughout the fourth quarter.”

Operating Results

The Corporation’s net interest income increased slightly to $1,769,000 for the quarter ended September 30, 2017 compared to $1,618,000 for the same period ended September 30, 2016. This represents an increase of $151,000 or 9.33% quarter over quarter. This increase is due to the growth in our loan portfolio and disciplined expense control. The net interest margin of the Bank remains above its peer group average ending at 3.88% for the quarter ended September 30, 2017.

Noninterest income decreased during the third quarter of 2017 when compared to the third quarter 2016. The Corporation posted $125,000 for the quarter compared to $195,000 for the quarter ended September 30, 2016, a decrease of $70,000 or 35.90%. The decrease is mostly attributable to gains realized in 2016 on the sale of SBA loans. Noninterest expense increased, ending the third quarter at $1,230,000 compared to $1,195,000 for the same period ended September 30, 2016, an increase of $35,000 or 3.00%. However, year-to-date the Corporation’s noninterest expense for 2017 was 4.17% or $160,000 lower at $3,678,000 compared to $3,838,000 in 2016.

Balance Sheet

Total assets at September 30, 2017 were $203,763,000 compared to $176,814,000 at September 30, 2016, an increase of $26,949,000 or 15.24%. The increase in assets is mainly due to an increase of loans.

Gross loans increased $22,622,000 from $149,027,000 at September 30, 2016, to $171,649,000 at September 30, 2017, an increase of 15.18%. Total deposits increased $27,850,000 or 18.15%, ending at $181,323,000 for September 30, 2017, up from $153,473,000 for September 30, 2016. Total stockholders’ equity increased from $14,852,000 at September 30, 2016 to $16,814,000 at September 30, 2017, an increase of $1,962,000 or 13.21%.

Asset Quality

There was one non-performing loan at September 30, 2017 for $168,000 compared to none for the same period in 2016. The allowance for loan loss increased to 1.17% of total loans as of September 30, 2017 compared to 1.07% for the same period 2016. 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.

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


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars, in thousands)
(unaudited) (unaudited)
9/30/2017 12/31/2016 9/30/2016
Assets
Cash and due from banks $ 16,717 $ 9,004 $ 7,214
Securities – Available for sale 7,337 8,481 10,558
Federal Home Loan Bank stock, at cost 232 232 232
Loans 171,649 151,887 149,027
Allowance for possible loan losses (2,004) (1,767) (1,593)
Net loans 169,644 150,119 147,434
Banking premises and equipment 3,620 3,682 3,726
Deferred tax asset 4,783 5,595 5,782
Other real estate owned 721 1,221 1,221
Accrued interest receivable and other assets 708 674 647
Total assets $ 203,763 $ 179,007 $ 176,814
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing demand deposits 79,981 80,217 83,635
Interest-bearing 101,343 77,625 69,838
Total deposits 181,323 157,842 153,473
Other Liabilities
Federal Home Loan Bank advances 0 0 2,500
Other borrowings 5,263 5,416 5,468
Accrued interest payable and other liabilities 364 560 521
Total liabilities 186,949 163,818 161,962
Stockholders' Equity
Common stock 11,923 11,923 11,945
Paid-in capital 11,804 11,804 11,826
Restricted stock - Unearned compensation 0 0 (37)
Accumulated deficit (6,855) (8,396) (8,908)
Accumulated other comprehensive income (loss) (57) (141) 26
Total stockholders' equity 16,814 15,189 14,852
Total liabilities and stockholders' equity $ 203,763 $ 179,007 $ 176,814



CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
9/30/2017 9/30/2016 9/30/2017 9/30/2016
Interest Income
Interest and fees on loans$1,926 $1,667 $5,569 $4,925
Interest on investment securities: 34 44 119 149
Interest on federal funds sold 17 11 31 40
Total interest income 1,978 1,722 5,718 5,114
Interest Expense
Deposits 160 42 347 129
Borrowings 49 63 182 196
Total interest expense 209 104 529 325
Net Interest Income 1,769 1,618 5,190 4,789
Provision for Possible Loan Losses
45
30 (265) 30
Net Interest Income after provision for possible loan losses
1,724 1,588 5,455 4,759
Noninterest Income
Service fees on loans and deposits 115 124 355 368
Gain on sale of securities 0 0 0 0
Gain/(Loss) on sale of other real estate owned 0 0 4 (14)
Other 11 71 227 139
Total noninterest income 125 195 586 493
Noninterest Expense
Salaries and employee benefits 742 703 2,204 2,277
Occupancy 127 122 370 372
Advertising 40 35 110 105
Outside processing 126 116 367 356
Professional fees 50 41 129 139
FDIC insurance 13 32 60 85
Defaulted loan expense 5 22 16 125
Other 127 124 422 379
Total noninterest expense 1,230 1,195 3,678 3,838
Income/(Loss) before income taxes 620 588 2,362 1,414
Income Tax Expense 213 217 821 533
Net Income/(Loss)$407 $371 $1,541 $881


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data) Quarter Ended
09/30/1706/30/1703/31/1712/31/1609/30/16
MARKET DATA
Book value per share $ 5.17 $ 5.05 $ 4.80 $ 4.67 $ 4.55
Market value per share $ 6.90 $ 6.30 $ 6.60 $ 5.25 $ 3.95
Earnings per share - basic & diluted $ 0.13 $ 0.24 $ 0.11 $ 0.16 $ 0.11
Period end common shares 3,249,156 3,249,156 3,249,156 3,249,156 3,261,156
PERFORMANCE RATIOS
Return on average assets 0.82% 1.62% 0.79% 1.14% 0.84%
Return on average equity 7.90% 15.14% 7.56% 10.66% 10.17%
Net interest margin - CSB 3.88% 4.01% 4.07% 4.12% 4.13%
Efficiency ratio 64.91% 59.52% 67.08% 57.12% 65.89%
Texas Ratio 4.44% 3.37% 3.60% 6.32% 7.32%
CAPITAL & LIQUIDITY
Tier 1 Leverage - CSB 9.30% 9.53% 9.09% 9.04% 8.76%
Common Equity Tier 1 Capital - CSB 10.07% 9.95% 9.71% 10.01% 9.50%
Tier 1 Risk Based Capital - CSB 10.07% 9.95% 9.71% 10.01% 9.50%
Total Risk Based Capital - CSB 11.19% 11.06% 10.78% 11.12% 10.50%
Loan to deposit ratio 94.66% 101.27% 98.62% 96.23% 97.10%
ASSET QUALITY
Gross loan charge-offs $ 1 $ 0 $ 0 $ 0 $ 0
Net loan charge-offs (recoveries) $ (2)$ (495)$ (4)$ (170)$ (5)
Allowance for loan and lease losses to total loans 1.17% 1.17% 1.12% 1.16% 1.07%
Nonperforming loans to total loans 0.10% 0.00% 0.00% 0.00% 0.00%
Nonperforming assets to total assets 0.44% 0.38% 0.39% 0.68% 0.69%


Source:Clarkston Financial Corporation