Clarkston Financial Corporation Reports 2014 Q1 Results

        Print
| Source: Clarkston Financial Corporation

CLARKSTON, Mich., April 16, 2014 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $280,000 or $0.09 per share for the three months ended March 31, 2014, compared to net income of $99,000 or $0.03 per share for the three months ended March 31, 2013. This represents an increase of $181,000 or 182.83% year over year.

J. Grant Smith, CEO, said, "Our financial performance continues to improve with each passing quarter. Our asset quality metrics compare very favorably to our peer group and our net interest margin ranks as one of the best in Southeast Michigan. Although new loan originations were flat in the first quarter, the Bank has a nice pipeline of business and we expect to see additional loan growth in the second and third quarters. Deposit growth and more importantly deposit mix remains a major focus of our management team. We expect our operating performance to gain further momentum as we grow through the remainder of the year."

Operating Results

The Corporation's net interest income increased to $1,330,000 for the quarter ended March 31, 2014 compared to $1,168,000 for the same period ended March 31, 2013, an increase of $162,000 or 13.87%. The net interest margin of the Bank has continued to rise, ending at 5.03% for the quarter ended March 31, 2014, up from 4.64% for the quarter ended March 31, 2013. This increase in net interest margin is representative of increased noninterest bearing demand deposit balances and reduced interest bearing deposit balances.

Noninterest income also increased in the first quarter 2014. The quarter ended at $278,000 compared to $211,000 for the quarter ended March 31, 2013, an increase of $67,000 or 31.75%. Noninterest expense increased, ending the first quarter 2014 at $1,328,000 compared to $1,249,000 for the same period ended March 31, 2013, an increase of $79,000 or 6.33%.

Balance Sheet

Total assets at March 31, 2014 were $132,990,000 compared to $119,244,000 at March 31, 2013, an increase of $13,746,000 or 11.53%. The increase in total assets represents an increase in cash as a result of an increase in noninterest bearing demand deposits.

Total loans increased $7,621,000 from $97,525,000 at March 31, 2013 to $105,146,000 at March 31, 2014, an increase of 7.81%. Total deposits increased $7,484,000 or 6.93%, ending at $115,498,000 for March 31, 2014, up from $108,014,000 at March 31, 2013. Total stockholders' equity increased from $5,558,000 at March 31, 2013 to $11,311,000 at March 31, 2014, an increase of $5,753,000 or 103.51%. This increase is due to net income in 2013 and the first quarter of 2014. The net income in 2013 was largely driven by the reversal of a portion of the valuation allowance against deferred tax assets.

Asset Quality

Total non-performing loans decreased to $144,000 at March 31, 2014 compared to $754,000 from the same period in 2013, a decrease of $610,000, or 80.90%. The allowance for loan loss decreased to 1.73% of total loans as of March 31, 2014, compared to 2.55% for the same period in 2013. 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)
  3/31/2014 12/31/2013 3/31/2013
Assets      
       
Cash and due from banks $9,644 $5,154 $6,698
Securities – Available for sale 6,421 6,689 7,159
Federal Home Loan Bank stock, at cost 556 556 556
       
Loans 105,146 104,836 97,525
Allowance for possible loan losses (1,821) (1,821) (2,490)
Net loans 103,325 103,015 95,035
       
Banking premises and equipment 4,870 4,814 4,916
Deferred tax asset 6,103 6,115 1,517
Other real estate owned 1,506 1,396 2,928
Accrued interest receivable and other assets 565 517 435
Total assets $132,990 $128,256 $119,244
       
Liabilities and Stockholders' Equity      
Liabilities      
Deposits      
Noninterest-bearing demand deposits 46,792 40,993 36,569
Interest-bearing 68,706 70,251 71,445
Total deposits 115,498 111,244 108,014
       
Other Liabilities      
Other borrowings 5,300 5,300 5,300
Accrued interest payable and other liabilities 881 738 372
Total liabilities 121,679 117,282 113,686
       
Stockholders' Equity      
Common stock 11,917 11,909 11,908
Paid-in capital 11,798 11,790 11,789
Restricted stock - Unearned compensation (77) (96) (149)
Accumulated deficit (12,275) (12,555) (17,958)
Accumulated other comprehensive income (loss) (52) (74) (32)
       
Total stockholders' equity 11,311 10,974 5,558
       
Total liabilities and stockholders' equity $132,990 $128,256 $119,244
 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
     
(Dollars, in thousands)    
  (unaudited)
  Three Months Ended
  3/31/2014 3/31/2013
Interest Income    
Interest and fees on loans $1,425 $1,304
Interest on investment securities: 42 27
Interest on federal funds sold 1 6
Total interest income 1,468 1,337
     
Interest Expense    
Deposits 54 85
Borrowings 84 84
Total interest expense 138 169
     
Net Interest Income 1,330 1,168
     
Provision for Possible Loan Losses  --  30
     
Net Interest Income after provision for possible loan losses 1,330 1,138
     
Noninterest Income    
Service fees on loan and deposit accounts 123 134
Loss on sale of other real estate owned --  46
Other 155 31
Total noninterest income 278 211
     
Noninterest Expense    
Salaries and employee benefits 730 631
Occupancy 143 154
Advertising 20 19
Outside processing 126 145
Professional fees 77 80
FDIC insurance 48 48
Defaulted loan expense 49 68
Other 135 104
Total noninterest expense 1,328 1,249
     
Income/(Loss) before income taxes 280 99
     
Income Tax Benefit  --   -- 
     
Net Income/(Loss) $280 $99
 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
           
(Dollars in thousands, except share and per share data)          
  Quarter Ended
           
  3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
MARKET DATA          
Book value per share $3.48 $3.38 $1.83 $1.76 $1.71
Market value per share $4.60 $5.00 $5.05 $5.05 $5.10
Earnings per share - basic & diluted $0.09 $1.55 $0.06 $0.06 $0.03
Period end common shares 3,246,156 3,242,596 3,242,533 3,242,533 3,242,533
           
PERFORMANCE RATIOS          
Return on average assets 0.87% 15.94% 0.66% 0.59% 0.33%
Return on average assets – CSB 1.29% 13.36% 1.15% 0.99% 0.75%
Return on average equity 10.06% 330.03% 14.25% 12.93% 7.29%
Return on average equity - CSB 10.49% 123.70% 12.47% 11.00% 8.35%
Net interest margin - CSB 5.03% 4.87% 4.78% 4.72% 4.64%
Efficiency ratio 82.60% 100.78% 85.70% 84.91% 90.64%
Texas Ratio 12.54% 13.18% 25.11% 24.92% 29.66%
           
CAPITAL & LIQUIDITY          
Tier 1 Leverage - CSB 9.17% 8.98% 8.59% 8.37% 8.29%
Tier 1 Risk Based Capital - CSB 9.96% 9.71% 9.56% 9.54% 9.51%
Total Risk Based Capital - CSB 11.21% 10.96% 10.82% 10.81% 10.78%
Loan to deposit ratio 91.04% 94.24% 90.85% 85.46% 90.29%
           
ASSET QUALITY          
Gross loan charge-offs $25 $65  $ --  $236 $26
Net loan charge-offs  $ -- $42 $(24) $211 $(22)
Allowance for loan and lease losses to total loans 1.73% 1.74% 2.25% 2.33% 2.55%
Nonperforming loans to total loans 0.14% 0.27% 0.79% 0.71% 0.77%
Nonperforming assets to total assets 1.24% 1.31% 2.58% 2.46% 3.09%
 
CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
       
  (unaudited)   (unaudited)
CATEGORY 3/31/2014 12/31/2013 3/31/2013
       
Commercial Loans $11,760 $12,727 $14,207
Real Estate Mortgage Loans:      
Commercial 83,237 82,874 72,670
1-4 Residential 5,881 6,017 7,096
Construction and other 4,108 3,017 3,396
Total mortgage loans on real estate 93,226 91,908 83,162
Consumer 160 201 156
Total Loans 105,146 104,836 97,525
Less: Allowance for loan losses (1,821) (1,821) (2,490)
Net Loans $103,325 $103,015 $95,035
       
       
  (unaudited)   (unaudited)
ASSET QUALITY 3/31/2014 12/31/2013 3/31/2013
       
Total nonaccrual loans $144 $279 $754
Total loans past due 90 days or more and still accruing -- -- --
Total nonperforming loans 144 279 754
Other real estate owned 1,506 1,396 2,928
Total nonperforming assets $1,650 $1,675 $3,682
Media Contact:
Clarkston Financial Corporation
J. Grant Smith, CEO
248-922-6945