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Clarkston Financial Corporation Reports 2013 Q1 Results

CLARKSTON, Mich., April 24, 2013 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $99,000 for the three months ended March 31, 2013, compared to net loss of $51,000 for the three months ended March 31, 2011.

J. Grant Smith, CEO, said, "The Bank continues to make great financial progress as noted in the attached financial information. The net interest margin continues to hold steady despite the difficult interest rate environment. In addition, the asset quality metrics continue to improve and are now stabilized. Moreover, we are seeing a decrease in defaulted loan expense further reducing operating expenses associated with problem loans. These improved operating metrics are having a very positive effect on our bottom line financial results. We have an experienced team in place with a strong work ethic and we expect the positive financial performance to continue."

Operating Results

The Corporation's net interest income remained steady at $1,168,000 for the quarter ended March 31, 2013 compared to $1,169,000 for the same period ended March 31, 2012. The net interest margin of the Bank showed a modest decrease, ending at 4.64% for the quarter ended March 31, 2013, down from 4.78% for the quarter ended March 31, 2012. This decrease in net interest margin is representative of decreased yields on new loans as competition for quality loans increases.

Noninterest income had a slight decrease in the first quarter 2013, due to security gains recognized in 2012. The quarter ended at $211,000 compared to $217,000 for the quarter ended March 31, 2012, a decrease of $6,000 or 2.76%. Noninterest expense decreased, ending the first quarter 2013 at $1,249,000 compared to $1,290,000 for the same period ended March 31, 2011, a decrease of $41,000 or 3.18%. The decrease represents a decline in the expense related to troubled loans, another sign of the strengthen asset quality position.

Balance Sheet

Total assets at March 31, 2013 were $119,244,000 compared to $121,285,000 at March 31, 2012, a decrease of $2,041,000 or 1.68%. The decline in total assets represents a decrease in cash as a result of a reduction in interest bearing deposits, specifically certificates of deposits.

Total loans increased $5,043,000 from $92,482,000 at March 31, 2012 to $97,525,000 at March 31, 2013, an increase of 5.45%. Total deposits decreased $3,770,000 or 3.37%, ending at $108,014,000 for March 31, 2013, down from $111,784,000 at March 31, 2011. Total stockholders' equity increased from $3,952,000 at March 31, 2012 to $5,558,000 at March 31, 2013, an increase of $1,706,000 or 43.17%. This increase is due to the net income in 2012 and the first quarter of 2013.

Asset Quality

Total non-performing loans decreased to $754,000 at March 31, 2013 compared to $1,964,000 from the same period 2012, a decrease of $1,210,000, or 61.61%. The allowance for loan loss decreased to 2.55% of total loans as of March 31, 2013, compared to 2.80% for the same period 2012. 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, 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)
3/31/2013 12/31/2012 3/31/2012
Assets
Cash and due from banks $6,698 $14,517 $16,385
Securities – Available for sale 7,159 7,709 5,095
Federal Home Loan Bank stock, at cost 556 556 556
Loans 97,525 92,812 92,482
Allowance for possible loan losses (2,490) (2,438) (2,585)
Net loans 95,035 90,374 89,897
Banking premises and equipment 4,916 4,955 4,614
Deferred tax asset 1,517 1,513 --
Other real estate owned 2,928 3,431 4,364
Accrued interest receivable and other assets 435 449 374
Total assets $119,244 $123,504 $121,285
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Deposits
Noninterest-bearing demand deposits 36,569 38,552 30,480
Interest-bearing 71,445 73,914 81,304
Total deposits 108,014 112,466 111,784
Other Liabilities
Other borrowings 5,300 5,300 5,300
Accrued interest payable and other liabilities 372 290 249
Total liabilities 113,686 118,056 117,333
Stockholders' Equity
Common stock 11,908 11,908 11,807
Paid-in capital 11,789 11,789 11,688
Restricted stock - Unearned compensation (149) (167) --
Accumulated deficit (17,958) (18,057) (19,640)
Accumulated other comprehensive income (loss) (32) (25) 97
Total stockholders' equity 5,558 5,448 3,952
Total liabilities and stockholders' equity $119,244 $123,504 $121,285
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited)
Three Months Ended
3/31/2013 3/31/2012
Interest Income
Interest and fees on loans $1,304 $1,325
Interest on investment securities: 27 51
Interest on federal funds sold 6 4
Total interest income 1,337 1,379
Interest Expense
Deposits 85 133
Borrowings 84 78
Total interest expense 169 211
Net Interest Income 1,168 1,169
Provision for Possible Loan Losses 30 45
Net Interest Income after provision for possible loan losses 1,138 1,124
Noninterest Income
Service fees on loan and deposit accounts 134 121
Gain on sale of securities -- 60
Loss on sale of other real estate owned 46 0
Other 31 36
Total noninterest income 211 217
Noninterest Expense
Salaries and employee benefits 631 554
Occupancy 154 147
Advertising 19 15
Outside processing 145 141
Professional fees 80 139
FDIC insurance 48 63
Defaulted loan expense 68 121
Other 104 110
Total noninterest expense 1,249 1,290
Income/(Loss) before income taxes 99 51
Income Tax Benefit -- --
Net Income/(Loss) $99 $51
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)
Quarter Ended
3/31/2013 12/31/2012 9/30/2012 6/30/2012 3/31/2012
MARKET DATA
Book value per share $0.17 $0.17 $0.13 $0.13 $0.12
Market value per share $0.51 $0.15 $0.55 $0.36 $0.36
Earnings per share - basic & diluted $0.00 $0.16 $0.02 $0.02 $0.00
Average basic shares outstanding 32,425,330 32,421,855 32,286,613 32,291,150 31,957,165
Average diluted shares outstanding 32,425,330 32,421,855 32,286,613 32,291,150 31,957,165
Period end common shares 32,425,330 32,421,855 32,421,855 32,433,355 31,957,165
PERFORMANCE RATIOS
Return on average assets 0.33% 4.23% 0.41% 0.67% 0.18%
Return on average equity 7.29% 123.59% 12.24% 20.03% 5.13%
Net interest margin - CSB 4.64% 4.65% 4.59% 4.74% 4.78%
Efficiency ratio 90.64% 114.20% 87.86% 83.33% 93.09%
Texas Ratio - CSB 29.66% 36.52% 48.98% 49.06% 55.80%
CAPITAL & LIQUIDITY
Total risk based capital - CSB 10.78% 10.77% 10.59% 10.22% 10.01%
Tier 1 risk based capital - CSB 9.51% 9.51% 9.33% 8.96% 8.74%
Tier 1 leverage - CSB 8.29% 8.14% 7.69% 7.56% 7.65%
Loan to deposit ratio 90.29% 82.52% 80.54% 85.61% 82.73%
ASSET QUALITY
Gross loan charge-offs $26 $136 $275 $99 $352
Net loan charge-offs $(22) $78 $199 $5 $325
Allowance for loan and lease losses to total loans 2.55% 2.63% 2.71% 2.80% 2.80%
Nonperforming loans to total loans 0.77% 1.05% 1.21% 1.89% 2.12%
Nonperforming assets to total assets 3.09% 3.57% 4.70% 4.83% 5.22%
CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited) (unaudited)
CATEGORY 3/31/2013 12/31/2012 3/31/2012
Commercial Loans $14,207 $15,355 $16,539
Real Estate Mortgage Loans:
Commercial 72,670 66,725 62,966
1-4 Residential 7,096 6,977 8,745
Construction and other 3,396 3,521 3,898
Total mortgage loans on real estate 83,162 77,223 75,609
Consumer 156 234 334
Total Loans 97,525 92,812 92,482
Less: Allowance for loan losses (2,490) (2,438) (2,585)
Net Loans $95,035 $90,374 $89,897
(unaudited) (unaudited)
ASSET QUALITY 3/31/2013 12/31/2012 3/31/2012
Total nonaccrual loans $754 $969 $1,964
Total loans past due 90 days or more and still accruing -- 3 --
Total nonperforming loans 754 972 $1,964
Other real estate owned 2,928 3,431 4,364
Total nonperforming assets $3,682 $4,403 $6,328

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