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Clarkston Financial Corporation Reports 2013 Q2 Results

CLARKSTON, Mich., July 23, 2013 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $182,000 or $0.05 per share for the three months ended June 30, 2013, compared to net income of $200,000 or $.06 per share for the three months ended June 30, 2012. For the six months ended June 30, 2013, the corporation reported a net income of $281,000 or $0.09 per share compared to a net income of $251,000 or $0.08 per share for the same period in 2012.

J. Grant Smith, CEO, said, "We are very pleased with our financial results. Our primary operating performance metrics are very much improved and now exceed peer levels at the Bank. The local market conditions continue to stabilize and as a result we are seeing good opportunities to grow our business. We are executing our plan as outlined by our Board of Directors and we expect the positive performance results to continue."

Operating Results

The Corporation's net interest income remained steady at $1,233,000 for the quarter ended June 30, 2013 compared to $1,221,000 for the same period ended June 30, 2012. The net interest margin of the Bank showed a modest decrease, ending at 4.72% for the quarter ended June 30, 2013, down from 4.74% for the quarter ended June 30, 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 decrease in the second quarter 2013, due to security gains recognized in 2012. The quarter ended at $169,000 compared to $248,000 for the quarter ended June 30, 2012, a decrease of $79,000 or 31.85%. After adjusting for security gains in 2012, noninterest income actually increased $14,000 or 9.03%. Noninterest expense decreased, ending the second quarter 2013 at $1,190,000 compared to $1,224,000 for the same period ended June 30, 2012, a decrease of $34,000 or 2.78%. The decrease represents a decline in the expense related to troubled loans, another sign of the strengthening asset quality position.

Balance Sheet

Total assets at June 30, 2013 were $127,377,000 compared to $118,963,000 at June 30, 2012, an increase of $8,414,000 or 7.07%. The increase in total assets represents strong growth in noninterest bearing demand deposits, which were in turn utilized for loan growth. Noninterest bearing demand deposits increased $11,703,000 from June 2012 to June 2013, an increase of 39.03%.

Total loans increased $5,478,000 from $93,625,000 at June 30, 2012 to $99,103,000 at June 30, 2013, an increase of 5.85%. Total deposits increased $6,597,000 or 6.03%, ending at $115,961,000 for June 30, 2013, up from $109,364,000 at June 30, 2012. Total stockholders' equity increased from $4,065,000 at June 30, 2012 to $5,706,000 at June 30, 2013, an increase of $1,641,000 or 40.37%. This increase is due to the net income in 2012 and 2013, mainly driven by the recapture of $1,500,000 in previously disallowed deferred tax assets in 2012.

Asset Quality

Total non-performing loans decreased to $706,000 at June 30, 2013 compared to $1,773,000 from the same period 2012, a decrease of $1,067,000, or 60.18%. The allowance for loan loss decreased to 2.33% of total loans as of June 30, 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)
6/30/2013 12/31/2012 6/30/2012
Assets
Cash and cash equivalents: $13,362 $14,517 $12,056
Securities – Available for sale 7,476 7,709 6,423
Federal Home Loan Bank stock, at cost 556 556 556
Loans 99,103 92,812 93,625
Allowance for possible loan losses (2,309) (2,438) (2,625)
Net loans 96,794 90,374 91,000
Banking premises and equipment 4,866 4,955 4,574
Deferred tax asset 1,511 1,513 --
Other real estate owned 2,422 3,431 3,972
Accrued interest receivable and other assets 390 449 382
Total assets $127,377 $123,504 $118,963
Liabilities and Stockholders' Equity (Deficit)
Liabilities
Deposits
Noninterest-bearing demand deposits 41,686 38,552 29,983
Interest-bearing 74,275 73,914 79,381
Total deposits 115,961 112,466 109,364
Other Liabilities
Other borrowings 5,300 5,300 5,300
Accrued interest payable and other liabilities 410 290 234
Total liabilities 121,671 118,056 114,898
Stockholders' Equity
Common stock 11,908 11,908 11,807
Paid-in capital 11,789 11,789 11,688
Restricted stock - Unearned compensation (131) (167) --
Accumulated deficit (17,776) (18,057) (19,440)
Accumulated other comprehensive income (loss) (84) (25) 10
Total stockholders' equity 5,706 5,448 4,065
Total liabilities and stockholders' equity $127,377 $123,504 $118,963
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)
(unaudited) (unaudited)
Three Months Ended Six Months Ended
6/30/2013 6/30/2012 6/30/2013 6/30/2012
Interest Income
Interest and fees on loans $1,373 $1,371 $2,678 $2,695
Interest on investment securities: 20 41 47 92
Interest on federal funds sold 4 7 9 11
Total interest income 1,397 1,419 2,734 2,798
Interest Expense
Deposits 80 121 165 254
Borrowings 84 77 169 155
Total interest expense 164 198 334 409
Net Interest Income 1,233 1,221 2,400 2,389
Provision for Possible Loan Losses 30 45 60 90
Net Interest Income after provision for possible loan losses 1,203 1,176 2,340 2,299
Noninterest Income
Service fees on loan and deposit accounts 139 123 273 244
Gain on sale of securities -- 93 -- 153
Loss on sale of other real estate owned (2) (9) 44 (9)
Other 32 41 63 77
Total noninterest income 169 248 380 465
Noninterest Expense
Salaries and employee benefits 588 536 1,219 1,091
Occupancy 152 145 306 293
Advertising 20 24 39 39
Outside processing 133 139 277 280
Professional fees 74 94 154 232
FDIC insurance 48 63 96 126
Defaulted loan expense 65 118 133 240
Other 110 105 215 212
Total noninterest expense 1,190 1,224 2,439 2,513
Income/(Loss) before income taxes 182 200 281 251
Income Tax Benefit -- -- -- --
Net Income/(Loss) $182 $200 $281 $251
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except share and per share data)
Quarter Ended
6/30/2013 3/31/2013 12/31/2012 9/30/2012 6/30/2012
MARKET DATA
Book value per share $1.76 $1.71 $1.68 $1.29 $1.25
Market value per share $5.05 $5.10 $1.50 $5.50 $3.60
Earnings per share - basic & diluted $0.06 $0.03 $1.55 $0.16 $0.25
Average basic shares outstanding 3,233,647 3,242,533 3,242,186 3,228,661 3,229,115
Average diluted shares outstanding 3,233,647 3,242,533 3,242,186 3,228,661 3,229,115
Period end common shares 3,242,533 3,242,533 3,242,186 3,242,186 3,243,336
PERFORMANCE RATIOS
Return on average assets 0.59% 0.33% 4.23% 0.41% 0.67%
Return on average equity 12.93% 7.29% 123.59% 12.24% 20.03%
Net interest margin - CSB 4.72% 4.64% 4.65% 4.59% 4.74%
Efficiency ratio 84.91% 90.64% 114.20% 87.86% 83.33%
Texas Ratio 24.92% 29.66% 36.52% 48.98% 49.06%
CAPITAL & LIQUIDITY
Total Risk Based Capital - CSB 10.81% 10.78% 10.77% 10.59% 10.22%
Tier 1 Risk Based Capital - CSB 9.54% 9.51% 9.51% 9.33% 8.96%
Tier 1 Leverage - CSB 8.37% 8.29% 8.14% 7.69% 7.56%
Loan to deposit ratio 85.46% 90.29% 82.52% 80.54% 85.61%
ASSET QUALITY
Gross loan charge-offs $236 $26 $136 $275 $99
Net loan charge-offs $211 $(22) $78 $199 $5
Allowance for loan and lease losses to total loans 2.33% 2.55% 2.63% 2.71% 2.80%
Nonperforming loans to total loans 0.71% 0.77% 1.05% 1.21% 1.89%
Nonperforming assets to total assets 2.46% 3.09% 3.57% 4.70% 4.83%
CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
(unaudited) (unaudited)
CATEGORY 6/30/2013 12/31/2012 6/30/2012
Commercial Loans $14,139 $15,355 $14,819
Real Estate Mortgage Loans:
Commercial 74,780 66,725 66,038
1-4 Residential 6,596 6,977 8,075
Construction and other 3,442 3,521 4,390
Total mortgage loans on real estate 84,818 77,223 78,503
Consumer 146 234 303
Total Loans 99,103 92,812 93,625
Less: Allowance for loan losses (2,309) (2,438) (2,625)
Net Loans $96,794 $90,374 $91,000
(unaudited) (unaudited)
ASSET QUALITY 6/30/2013 12/31/2012 6/30/2012
Total nonaccrual loans $507 $969 $1,773
Total loans past due 90 days or more and still accruing 199 3 --
Total nonperforming loans 706 972 1,773
Other real estate owned 2,422 3,431 3,972
Total nonperforming assets $3,128 $4,403 $5,745

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