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Clarkston Financial Corporation Reports 2012 Q3 Results

CLARKSTON, Mich., Oct. 30, 2012 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $126,000 or $0.02 per share for the three months ended September 30, 2012, compared to net loss of $212,000 or $0.03 per share for the three months ended September 30, 2011. For the nine months ended September 30, 2012, the corporation reported a net income of $377,000 or $0.02 per share compared to a net loss of $99,000 or $0.01 per share for the same period in 2011.

J. Grant Smith, CEO, said, "As noted in the tables below the asset quality of the Bank continues to significantly improve. Moreover, despite the additional costs associated with other real estate owned and final collection efforts the earnings picture is improving as well. The underlying performance metrics of the Bank are very stable and we expect the financial condition of the Bank to continue its improvement as we move forward."

Operating Results

The Corporation's net interest income was $1,206,000 for the quarter ended September 30, 2012 compared to $1,102,000 for the same period ended September 30, 2011, an increase of $104,000 or 9.44%. The net interest margin of the Bank showed a modest increase, ending at 4.59% for the quarter ended September 30, 2012, up from 4.44% for the quarter ended September 30, 2011. This increase in net interest margin is representative of increased loan growth and growth in core deposits.

Noninterest income increased in the third quarter 2012, due to lower losses on the sale of other real estate owned, ending at $204,000 compared to $61,000 for the quarter ended September 30, 2011, an increase of $143,000 or 234.43%. Noninterest expense increased, ending the third quarter 2012 at $1,239,000 compared to $1,100,000 for the same period ended September 30, 2011. The increase is attributable to higher professional fees and salaries.

Balance Sheet

Total assets at September 30, 2012 were $123,130,000 compared to $114,651,000 at September 30, 2011, an increase of $8,479,000 or 7.40%. The growth in total assets represents increased cash balances as a result of additional growth in core deposits.

Total loans increased $1,491,000 from $89,788,000 at September 30, 2011 to $91,279,000 at September 30, 2012, an increase of 1.66%. Total deposits increased $9,797,000 or 9.46%, ending at $113,335,000 for September 30, 2012, up from $103,538,000 at September 30, 2011. Total stockholders' equity decreased from $7,475,000 at September 30, 2011 to $4,197,000 at September 30, 2012, a decrease of $3,278,000 or 43.85%. This decrease is due to the net loss in 2011.

Asset Quality

Total non-performing loans decreased to $1,101,000 at September 30, 2012 compared to $4,852,000 from the same period 2011, a decrease of $3,751,000, or 77.31%. The allowance for loan loss increased to 2.71% of total loans as of September 30, 2012, compared to 2.41% for the same period 2011. Management continually monitors the allowance for loan loss to assure its adequacy.

Clarkston State Bank opened in January 1999 and operates four branches in Clarkston, Waterford, and Independence Township, 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)
9/30/2012 12/31/2011 9/30/2011
Assets
Cash and due from banks $15,711 $9,783 $7,418
Securities – Available for sale 8,384 9,412 9,929
Federal Home Loan Bank stock, at cost 556 556 556
Loans 91,279 88,081 89,788
Allowance for possible loan losses (2471) (2865) (2161)
Net loans 88,808 85,216 87,627
Banking premises and equipment 4,529 4,586 4,628
Other real estate owned 4,689 4,411 4,122
Accrued interest receivable and other assets 453 410 371
Total assets $123,130 $114,374 $114,651
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Deposits
Noninterest-bearing demand deposits 34,404 23,902 24,175
Interest-bearing 78,931 80,993 79,363
Total deposits 113,335 104,895 103,538
Other Liabilities
Other borrowings 5,300 5,300 3,330
Accrued interest payable and other liabilities 298 245 308
Total liabilities 118,933 110,440 107,176
Stockholders' Equity
Common stock 11,908 11,807 11,807
Paid-in capital 11,789 11,688 11,688
Restricted stock - Unearned compensation (185) 0 (17)
Accumulated deficit (19,314) (19,691) (16,136)
Accumulated other comprehensive income (loss) (1) 130 133
Total stockholders' equity 4,197 3,934 7,475
Total liabilities and stockholders' equity $123,130 $114,374 $114,651
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
9/30/2012 9/30/2011 9/30/2012 9/30/2011
Interest Income
Interest and fees on loans $1,342 $1,230 $4,038 $3,724
Interest on investment securities: 46 81 138 247
Interest on federal funds sold 7 3 17 17
Total interest income 1,395 1,314 4,193 3,988
Interest Expense
Deposits 111 170 365 555
Borrowings 78 42 233 165
Total interest expense 189 212 598 720
Net Interest Income 1,206 1,102 3,595 3,268
Provision for Possible Loan Losses 45 275 135 275
Net Interest Income after provision for possible loan losses 1,161 827 3,460 2,993
Noninterest Income
Service fees on loan and deposit accounts 129 143 373 451
Gain on sale of securities 16 -- 169 55
Loss on sale of other real estate owned (14) (106) (23) (157)
Other 73 24 150 111
Total noninterest income 204 61 669 459
Noninterest Expense
Salaries and employee benefits 574 465 1,665 1,488
Occupancy 154 144 447 450
Advertising 23 17 62 54
Outside processing 135 134 415 397
Professional fees 80 50 313 188
FDIC insurance 68 25 194 234
Defaulted loan expense 117 173 356 446
Other 88 92 300 294
Total noninterest expense 1,239 1,100 3,752 3,551
Income/(Loss) before income taxes 126 (212) 377 (99)
Income Tax Benefit -- -- -- --
Net Income/(Loss) $126 $(212) $377 $(99)
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)
Quarter Ended
9/30/2012 6/30/2012 3/31/2012 12/31/2011 9/30/2011
MARKET DATA
Book value per share $0.13 $0.13 $0.12 $0.12 $0.23
Market value per share $0.55 $0.36 $0.36 $0.42 $0.90
Earnings per share - basic & diluted $0.02 $0.02 $0.01 ($0.44) ($0.03)
Average basic shares outstanding 32,286,613 32,291,150 31,957,165 31,950,625 31,950,625
Average diluted shares outstanding 32,286,613 32,291,150 31,957,165 31,950,625 31,950,625
Period end common shares 32,421,855 32,433,355 31,957,165 31,950,625 31,950,625
PERFORMANCE RATIOS
Return on average assets 0.41% 0.67% 0.18% -12.35% -0.76%
Return on average equity 12.24% 20.03% 5.13% -213.35% -11.04%
Net interest margin - CSB 4.59% 4.74% 4.78% 4.85% 4.44%
Efficiency ratio 87.86% 83.33% 93.09% 283.10% 94.56%
Texas Ratio 48.98% 49.06% 55.80% 58.21% 73.57%
CAPITAL & LIQUIDITY
Total Risk Based Capital - CSB 10.59% 10.22% 10.01% 10.23% 11.40%
Tier 1 Risk Based Capital - CSB 9.33% 8.96% 8.74% 8.96% 10.14%
Tier 1 Leverage - CSB 7.69% 7.56% 7.65% 7.44% 8.96%
Loan to deposit ratio 80.54% 85.61% 82.73% 83.97% 86.72%
ASSET QUALITY
Gross loan charge-offs $275 $99 $352 $1,898 $350
Net loan charge-offs $199 $5 $325 $1,879 $317
Allowance for loan and lease losses to total loans 2.71% 2.80% 2.80% 3.25% 2.41%
Nonperforming loans to total loans 1.21% 1.89% 2.12% 2.55% 5.40%
Nonperforming assets to total assets 4.70% 4.83% 5.22% 5.82% 7.83%
CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited) (unaudited)
CATEGORY 9/30/2012 12/31/2011 9/30/2011
Commercial Loans $13,152 $14,491 $13,112
Real Estate Mortgage Loans:
Commercial 66,567 60,453 63,298
1-4 Residential 7,479 8,990 9,337
Construction and other 3,820 3,677 3,483
Total mortgage loans on real estate 77,866 73,120 76,118
Consumer 261 470 558
Total Loans 91,279 88,081 89,788
Less: Allowance for loan losses (2,471) (2,865) (2,161)
Net Loans $88,808 $85,216 $87,627
(unaudited) (unaudited)
ASSET QUALITY 9/30/2012 12/31/2011 9/30/2011
Total nonaccrual loans $1,101 $2,244 $4,852
Total loans past due 90 days or more and still accruing -- -- --
Total nonperforming loans 1,101 2,244 $4,852
Other real estate owned 4,689 4,411 4,122
Total nonperforming assets $5,790 $6,655 $8,974
CONTACT: Media Contact: Clarkston Financial Corporation J. Grant Smith, CEO 248-922-6945Source:Clarkston Financial Corporation