CLARKSTON, Mich., July 26, 2012 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $200,000 or $0.01 per share for the three months ended June 30, 2012, compared to net income of $151,000 or $0.01 per share for the three months ended June 30, 2011. For the six months ended June 30, 2012, the corporation reported a net income of $251,000 or $0.01 per share compared to a net income of $113,000 or $0.01 per share for the same period in 2011.
J. Grant Smith, CEO, said, "Our financial performance continues to improve as asset quality is getting stronger with each passing quarter. We are now in the final phase of our turnaround and have begun the process of growing our loan and deposit portfolios. Moreover, the Bank's strong core deposits are the catalyst for the robust net interest margin of 4.74% which will help to further enhance the Corporation's financial performance. Lastly, we expect our costs related to the servicing of other real estate owned as well as legal fees associated with workout loans to decline in the coming quarters as asset quality continues to improve."
Operating Results
The Corporation's net interest income was $1,176,000 for the quarter ended June 30, 2012 compared to $1,141,000 for the same period ended June 30, 2011, an increase of $35,000 or 3.07%. The net interest margin of the Bank showed a modest increase, ending at 4.74% for the quarter ended June 30, 2012, up from 4.68% for the quarter ended June 30, 2011. This increase in net interest margin is representative of increased loan growth and growth in core deposits.
Noninterest income increased in the second quarter 2012, due to gains on the sale of securities and lower losses on the sale of other real estate owned, ending at $248,000 compared to $172,000 for the quarter ended June 30, 2011, a increase of $76,000 or 44.19%. Noninterest expense increased, ending the second quarter 2012 at $1,223,000 compared to $1,162,000 for the same period ended June 30, 2011. The increase is attributable to higher professional fees and salaries.
Balance Sheet
Total assets at June 30, 2012 were $118,963,000 compared to $111,365,000 at June 30, 2011, an increase of $7,598,000 or 6.82%. The growth in total assets represents increased cash balances as a result of additional growth in core deposits.
Total loans increased $8,195,000 from $85,430,000 at June 30, 2011 to $93,625,000 at June 30, 2012, an increase of 9.59%. Total deposits increased $9,325,000 or 9.32%, ending at $109,364,000 for June 30, 2012, up from $100,039,000 at June 30, 2011. Total stockholders' equity decreased from $7,646,000 at June 30, 2011 to $4,065,000 at June 30, 2012, a decrease of $3,581,000 or 46.81%. This decrease is due to the net loss in 2011.
Asset Quality
Total non-performing loans decreased to $1,773,000 at June 30, 2012 compared to $4,442,000 from the same period 2011, a decrease of $2,669,000, or 60.09%. The allowance for loan loss increased to 2.80% of total loans as of June 30, 2012, compared to 2.58% 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) | ||
| 6/30/2012 | 12/31/2011 | 6/30/2011 | |
| Assets | |||
| Cash and due from banks | $ 12,056 | $ 9,783 | $ 8,637 |
| Securities – Available for sale | 6,423 | 9,412 | 10,341 |
| Federal Home Loan Bank stock, at cost | 556 | 556 | 556 |
| Loans | 93,625 | 88,081 | 85,430 |
| Allowance for possible loan losses | (2,625) | (2,865) | (2,203) |
| Net loans | 91,000 | 85,216 | 83,227 |
| Banking premises and equipment | 4,574 | 4,586 | 4,664 |
| Other real estate owned | 3,972 | 4,411 | 3,548 |
| Accrued interest receivable and other assets | 382 | 410 | 392 |
| Total assets | $ 118,963 | $ 114,374 | $ 111,365 |
| Liabilities and Stockholders' Equity | |||
| Liabilities | |||
| Deposits | |||
| Noninterest-bearing demand deposits | 29,983 | 23,902 | 22,762 |
| Interest-bearing | 79,381 | 80,993 | 77,277 |
| Total deposits | 109,364 | 104,895 | 100,039 |
| Other Liabilities | |||
| Other borrowings | 5,300 | 5,300 | 3,330 |
| Accrued interest payable and other liabilities | 234 | 245 | 350 |
| Total liabilities | 114,898 | 110,440 | 103,719 |
| Stockholders' Equity | |||
| Common stock | 11,807 | 11,807 | 11,807 |
| Paid-in capital | 11,688 | 11,688 | 11,690 |
| Restricted stock - Unearned compensation | -- | -- | (23) |
| Accumulated deficit | (19,440) | (19,691) | (15,924) |
| Accumulated other comprehensive income | 10 | 130 | 96 |
| Total stockholders' equity | 4,065 | 3,934 | 7,646 |
| Total liabilities and stockholders' equity | $ 118,963 | $ 114,374 | $ 111,365 |
| CLARKSTON FINANCIAL CORPORATION | ||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||
| (Dollars, in thousands) | ||||
| (unaudited) | (unaudited) | |||
| Three Months Ended | Six Months Ended | |||
| 6/30/2012 | 6/30/2011 | 6/30/2012 | 6/30/2011 | |
| Interest Income | ||||
| Interest and fees on loans | $ 1,371 | $ 1,276 | $ 2,695 | $ 2,494 |
| Interest on investment securities: | 41 | 83 | 92 | 168 |
| Interest on federal funds sold | 7 | 10 | 11 | 13 |
| Total interest income | 1,419 | 1,369 | 2,798 | 2,675 |
| Interest Expense | ||||
| Deposits | 121 | 181 | 254 | 386 |
| Borrowings | 77 | 47 | 155 | 123 |
| Total interest expense | 198 | 228 | 409 | 509 |
| Net Interest Income | 1,221 | 1,141 | 2,389 | 2,166 |
| Provision for Possible Loan Losses | 45 | -- | 90 | -- |
| Net Interest Income after provision for possible loan losses | 1,176 | 1,141 | 2,299 | 2,166 |
| Noninterest Income | ||||
| Service fees on loan and deposit accounts | 123 | 159 | 244 | 308 |
| Gain on sale of securities | 93 | 55 | 153 | 55 |
| Loss on sale of other real estate owned | (9) | (79) | (9) | (51) |
| Other | 41 | 37 | 77 | 86 |
| Total noninterest income | 248 | 172 | 465 | 398 |
| Noninterest Expense | ||||
| Salaries and employee benefits | 536 | 509 | 1,091 | 1,023 |
| Occupancy | 145 | 149 | 293 | 305 |
| Advertising | 24 | 19 | 39 | 37 |
| Outside processing | 139 | 137 | 280 | 264 |
| Professional fees | 94 | 61 | 232 | 138 |
| FDIC insurance | 63 | 83 | 126 | 209 |
| Defaulted loan expense | 118 | 113 | 240 | 273 |
| Other | 104 | 91 | 214 | 202 |
| Total noninterest expense | 1,223 | 1,162 | 2,514 | 2,451 |
| Net Income | 200 | 151 | 251 | 113 |
| CLARKSTON FINANCIAL CORPORATION | |||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||
| (Dollars in thousands, except share and per share data) | |||||
| Quarter Ended | |||||
| 6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 6/30/2011 | |
| MARKET DATA | |||||
| Book value per share | $ 0.13 | $ 0.12 | $ 0.12 | $ 0.23 | $ 0.24 |
| Market value per share | $ 0.36 | $ 0.36 | $ 0.42 | $ 0.90 | $ 0.50 |
| Earnings per share - basic & diluted | $ 0.01 | $ 0.01 | $ (0.44) | $ (0.03) | $ 0.02 |
| Average basic shares outstanding | 32,291,150 | 31,957,165 | 31,950,625 | 31,950,625 | 30,142,227 |
| Average diluted shares outstanding | 32,291,150 | 31,957,165 | 31,950,625 | 31,950,625 | 30,142,227 |
| Period end common shares | 32,433,355 | 31,957,165 | 31,950,625 | 31,950,625 | 31,950,625 |
| PERFORMANCE RATIOS | |||||
| Return on average assets | 0.67% | 0.18% | -12.35% | -0.76% | 0.54% |
| Return on average equity | 20.03% | 5.13% | -213.35% | -11.04% | 8.66% |
| Net interest margin - CSB | 4.74% | 4.78% | 4.85% | 4.44% | 4.68% |
| Efficiency ratio | 83.33% | 93.09% | 283.10% | 94.56% | 88.49% |
| Texas Ratio | 49.06% | 55.80% | 58.21% | 73.57% | 64.49% |
| CAPITAL & LIQUIDITY | |||||
| Total Risk Based Capital - CSB | 10.22% | 10.01% | 10.23% | 11.40% | 12.03% |
| Tier 1 Risk Based Capital - CSB | 8.96% | 8.74% | 8.96% | 10.14% | 10.77% |
| Tier 1 Leverage - CSB | 7.56% | 7.65% | 7.44% | 8.96% | 9.18% |
| Loan to deposit ratio | 85.61% | 82.73% | 83.97% | 86.72% | 85.40% |
| ASSET QUALITY | |||||
| Gross loan charge-offs | $ 99 | $ 352 | $ 1,898 | $ 350 | $ 382 |
| Net loan charge-offs | $ 5 | $ 325 | $ 1,879 | $ 317 | $ 358 |
| Allowance for loan and lease losses to total loans | 2.80% | 2.80% | 3.25% | 2.41% | 2.58% |
| Nonperforming loans to total loans | 1.89% | 2.12% | 2.55% | 5.40% | 5.20% |
| Nonperforming assets to total assets | 4.83% | 5.22% | 5.82% | 7.83% | 7.17% |
| CLARKSTON FINANCIAL CORPORATION | |||||
| LOAN INFORMATION | |||||
| (unaudited) | (unaudited) | ||||
| CATEGORY | 6/30/2012 | 12/31/2011 | 6/30/2011 | ||
| Commercial Loans | $ 14,819 | $ 14,491 | $ 9,263 | ||
| Real Estate Mortgage Loans: | |||||
| Commercial | 66,038 | 60,453 | 62,650 | ||
| 1-4 Residential | 8,075 | 8,990 | 9,565 | ||
| Construction and other | 4,390 | 3,677 | 3,277 | ||
| Total mortgage loans on real estate | 78,503 | 73,120 | 75,492 | ||
| Consumer | 303 | 470 | 675 | ||
| Total Loans | 93,625 | 88,081 | 85,430 | ||
| Less: Allowance for loan losses | (2,625) | (2,865) | (2,203) | ||
| Net Loans | $ 91,000 | $ 85,216 | $ 83,227 | ||
| (unaudited) | (unaudited) | ||||
| ASSET QUALITY | 6/30/2012 | 12/31/2011 | 6/30/2011 | ||
| Total nonaccrual loans | $ 1,773 | $ 2,244 | $ 2,776 | ||
| Total loans past due 90 days or more and still accruing | -- | -- | 1,666 | ||
| Total nonperforming loans | 1,773 | 2,244 | $ 4,442 | ||
| Other real estate owned | 3,972 | 4,411 | 3,548 | ||
| Total nonperforming assets | $ 5,745 | $ 6,655 | $ 7,990 | ||