Clarkston Financial Corporation Reports 2013 Q4 Results

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| Source: Clarkston Financial Corporation

CLARKSTON, Mich., Feb. 19, 2014 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $5,016,000 or $1.55 per share for the three months ended December 31, 2013, compared to net income of $1,258,000 or $0.39 per share for the three months ended December 31, 2012. For the twelve months ended December 31, 2013, the corporation reported net income of $5,502,000 or $1.70 per share compared to a net income of $1,635,000 or $0.50 per share for the same period in 2012.

J. Grant Smith, CEO, said, "We are very proud of our operating results. The reversal of a significant portion of our disallowed deferred tax asset is the exclamation point on the turnaround of the Bank. Our asset quality fundamentals are in good order and when combined with a strong asset liability position, we believe the Bank is poised to do well in the future. We are very proud of our team and we look forward to expanding our market share through deposit and loan opportunities."

Operating Results

The Corporation's net interest income increased to $1,320,000 for the quarter ended December 31, 2013 compared to $1,168,000 for the same period ended December 31, 2012. This represents a 13.02% increase over the prior year. The net interest margin of the Bank displayed growth, ending at 4.87% for the quarter ended December 31, 2013, up from 4.65% for the quarter ended December 31, 2012.    

Noninterest income had a decrease in the fourth quarter 2013, due to the write down of one of the Bank's two remaining other real estate owned properties.  The quarter ended at $92,000 compared to $220,000 for the quarter ended December 31, 2012, a decrease of $128,000 or 51.16%. Adjusted for the write down on the other real estate owned property, noninterest income would have been $322,000. Noninterest expense continued to decline year over year, ending the fourth quarter 2013 at $1,423,000 compared to $1,585,000 for the same period ended December 31, 2012, a decrease of $162,000 or 10.23%. The decrease represents a decline in the expense related to troubled loans among other operating expenses.     

Balance Sheet

Total assets at December 31, 2013 were $128,256,000 compared to $123,504,000 at December 31, 2012, an increase of $4,752,000 or 3.85%.

Total loans increased $12,641,000 from $90,374,000 at December 31, 2012 to $103,015,000 at December 31, 2013, an increase of 13.99%. Total deposits decreased $1,222,000 or 1.09%, ending at $111,244,000 for December 31, 2013, down from $112,466,000 at December 31, 2012.  Noninterest bearing demand deposits increased $2,441,000 from December 2012 to December 2013, reflecting an increase of 6.33%.

Total stockholders' equity increased from $5,448,000 at December 31, 2012 to $10,974,000 at December 31, 2013, an increase of $5,526,000 or 101.43%. This increase is due to the net income in 2013, mainly driven by the recapture of $4,577,000 in previously disallowed deferred tax assets in 2013.

Asset Quality

Total non-performing loans decreased to $279,000 at December 31, 2013 compared to $972,000 from the same period 2012, a decrease of $693,000, or 71.30%. The allowance for loan loss decreased to 1.74% of total loans as of December 31, 2013, compared to 2.63% 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)    
     
  12/31/2013 12/31/2012
Assets    
     
Cash and cash equivalents:    
Cash and due from banks  $ 5,154  $ 14,517
Securities – Available for sale 6,689 7,709
Federal Home Loan Bank stock, at cost 556 556
     
Loans 104,836 92,812
Allowance for possible loan losses (1,821) (2,438)
Net loans 103,015 90,374
     
Banking premises and equipment 4,814 4,955
Deferred tax asset 6,115 1,513
Other real estate owned 1,396 3,431
Accrued interest receivable and other assets 517 449
Total assets  $ 128,256  $ 123,504
     
Liabilities and Stockholders' Equity    
Liabilities    
Deposits    
Noninterest-bearing demand deposits $ 40,993 $ 38,552
Interest-bearing 70,251 73,914
Total deposits 111,244 112,466
     
Other Liabilities    
Other borrowings 5,300 5,300
Accrued interest payable and other liabilities 738 290
Total liabilities 117,282 118,056
     
Stockholders' Equity    
Common stock 11,909 11,908
Paid-in capital 11,790 11,789
Restricted stock - Unearned compensation (96) (167)
Accumulated deficit (12,555) (18,057)
Accumulated other comprehensive loss (74) (25)
     
Total stockholders' equity 10,974 5,448
     
Total liabilities and stockholders' equity  $ 128,256  $ 123,504

 

CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
 
 (Dollars in thousands)
  Three Months Ended Twelve Months Ended
  12/31/2013
(Unaudited)
12/31/2012
(Unaudited)
12/31/2013
12/31/2012
Interest Income        
Interest and fees on loans  $ 1,425  $ 1,328  $   5,501  $  5,366
Interest on investment securities: 38 35 113 173
Interest on federal funds sold 3 6 17 24
Total interest income 1,467 1,369 5,631 5,562
         
Interest Expense        
Deposits 61 93 294 458
Borrowings 86 108 342 341
Total interest expense 147 201 636 799
         
Net Interest Income 1,320 1,168 4,995 4,763
         
Provision for Possible Loan Losses  (470)  45  (410) 180
         
Net Interest Income after provision for possible loan losses  1,790 1,123  5,405  4,583 
         
Noninterest Income        
Service fees on loan and deposit accounts 123 131 527 504
Gain on sale of securities  --  29  -- 197
Loss on sale of other real estate owned (316) (29) (273) (53)
Other 286 90 379 240
Total noninterest income 92 220 633 889
         
Noninterest Expense        
Salaries and employee benefits 754 862 2,592 2,527
Occupancy 143 154 596 600
Advertising 10 18 71 80
Outside processing 138 135 553 550
Professional fees 108 30 359 342
FDIC insurance 47 36 191 230
Defaulted loan expense 63 151 255 507
Other 158 200 476 501
Total noninterest expense 1,423 1,585 5,093 5,337
         
Income/(Loss) before income taxes 459 (242) 945 135
Income Tax Benefit  (4,557)  (1,500)  (4,557)  (1,500)
         
Net Income  $ 5,016  $ 1,258  $ 5,502  $ 1,635

 

CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
 
(Dollars in thousands, except share and per share data)
   
  Quarter Ended
   
  12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
MARKET DATA          
Book value per share  $ 3.38  $ 1.83  $ 1.76  $ 1.71  $ 1.68
Market value per share  $ 5.00  $ 5.05  $ 5.05  $ 5.10  $ 1.50
Earnings per share - basic & diluted  $ 1.55  $ 0.06  $ 0.06  $ 0.03  $ 0.39
Period end common shares 3,242,596 3,242,533 3,242,533 3,242,533 3,242,186
           
PERFORMANCE RATIOS          
Return on average assets 15.94% 0.66% 0.59% 0.33% 4.23%
Return on average equity 330.03% 14.25% 12.93% 7.29% 123.59%
Net interest margin - CSB 4.87% 4.78% 4.72% 4.64% 4.65%
Efficiency ratio 100.78% 85.70% 84.91% 90.64% 114.20%
Texas Ratio 13.18% 25.11% 24.92% 29.66% 36.52%
           
CAPITAL & LIQUIDITY          
Tier 1 Leverage - CSB 8.98% 8.59% 8.37% 8.29% 8.14%
Tier 1 Risk Based Capital - CSB 9.71% 9.56% 9.54% 9.51% 9.51%
Total Risk Based Capital - CSB 10.96% 10.82% 10.81% 10.78% 10.77%
Loan to deposit ratio 94.24% 90.85% 85.46% 90.29% 82.52%
           
ASSET QUALITY          
Gross loan charge-offs  $ 65  $ --  $ 236  $ 26  $ 136
Net loan charge-offs  $ 42  $ (24)  $ 211  $ (22)  $ 78
Allowance for loan and lease losses to total loans 1.74% 2.25% 2.33% 2.55% 2.63%
Nonperforming loans to total loans 0.27% 0.79% 0.71% 0.77% 1.05%
Nonperforming assets to total assets 1.31% 2.58% 2.46% 3.09% 3.57%

 

CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
     
     
CATEGORY 12/31/2013 12/31/2012
     
Commercial Loans  $ 12,727  $ 15,355
Real Estate Mortgage Loans:    
Commercial  82,874  66,725
1-4 Residential  6,017   6,977
Construction and other  3,017  3,521
Total mortgage loans on real estate  91,908  77,223
Consumer   201  234
    Total Loans  104,836  92,812
Less: Allowance for loan losses  (1,821)  (2,438)
    Net Loans  $ 103,015  $ 90,374
     
     
     
ASSET QUALITY 12/31/2013 12/31/2012
     
Total nonaccrual loans  $ 279  $ 969
Total loans past due 90 days or more and still accruing  --   3
Total nonperforming loans  279  972
Other real estate owned   1,396  3,431
Total nonperforming assets  $ 1,675  $ 4,403
Media Contact:
Clarkston Financial Corporation - J. Grant Smith, CEO,
248-922-6945