Clarkston Financial Corporation Reports 2014 Q2 Results

        Print
| Source: Clarkston Financial Corporation

CLARKSTON, Mich., July 29, 2014 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $232,000 or $0.07 per share for the three months ended June 30, 2014, compared to net income of $182,000 or $.06 per share for the three months ended June 30, 2013. For the six months ended June 30, 2014, the corporation reported a net income of $512,000 or $0.16 per share compared to a net income of $281,000 or $0.09 per share for the same period in 2013.

J. Grant Smith, CEO, said, "We continue to post very good operating results. Our board and entire team continue to execute our growth plan and our financial results reflect our efforts. Our net interest margin continues to be the catalyst for our positive results. We expect the high net interest margin to continue as we are experiencing good opportunities for both loan and deposit growth. The Bank's asset quality is in good shape with very low delinquency at .22% and non-performing loans at 0.13%, respectively. We are forging ahead with our strategic initiatives and we believe our positive operating performance will continue."   

Operating Results

The Corporation's net interest income increased to $1,346,000 for the quarter ended June 30, 2014 compared to $1,233,000 for the same period ended June 30, 2013. The net interest margin of the Bank continued to improve year over year, ending at 4.93% for the quarter ended June 30, 2014, up from 4.72% for the quarter ended June 30, 2013. This increase in net interest margin is representative of higher levels of noninterest bearing deposits.

Noninterest income remained constant during the second quarter 2014. The quarter ended at $163,000 compared to $169,000 for the quarter ended June 30, 2013, a decrease of $6,000 or 3.55%. Noninterest expense increased, ending the second quarter 2014 at $1,277,000 compared to $1,190,000 for the same period ended June 30, 2013, an increase of $87,000 or 7.31%.    

Balance Sheet

Total assets at June 30, 2014 were $134,387,000 compared to $127,377,000 at June 30, 2013, an increase of $7,010,000 or 5.50%. The increase in assets is largely due to the reversal of the valuation allowance against deferred tax assets in the fourth quarter 2013 of $4,906,000.

Total loans increased $11,276,000 from $99,103,000 at June 30, 2013 to $110,379,000 at June 30, 2014, an increase of 11.38%. Total deposits increased $568,000 or 0.49%, ending at $116,529,000 for June 30, 2014, up from $115,961,000 at June 30, 2013. Total stockholders' equity increased from $5,706,000 at June 30, 2013 to $11,613,000 at June 30, 2014, an increase of $5,907,000 or 103.52%. This increase is due to the net income in 2013 and 2014, mainly driven by the recapture of $4,906,000 in previously disallowed deferred tax assets in 2013.

Asset Quality

Total non-performing loans decreased to $144,000 at June 30, 2014 compared to $706,000 from the same period 2013, a decrease of $562,000, or 79.60%. The allowance for loan loss decreased to 1.67% of total loans as of June 30, 2014, compared to 2.33% for the same period 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)
  6/30/2014 12/31/2013 6/30/2013
Assets      
       
Cash and due from banks $6,276 $5,154 $13,362
Securities – Available for sale 6,191 6,689 7,476
Federal Home Loan Bank stock, at cost 556 556 556
       
Loans 110,379 104,836 99,103
Allowance for possible loan losses (1,842) (1,821) (2,309)
Net loans 108,537 103,015 96,794
       
Banking premises and equipment 4,834 4,814 4,866
Deferred tax asset 6,077 6,115 1,511
Other real estate owned 1,396 1,396 2,422
Accrued interest receivable and other assets 520 517 390
Total assets $134,387 $128,256 $127,377
       
Liabilities and Stockholders' Equity      
Liabilities      
Deposits      
Noninterest-bearing demand deposits 44,841 40,993 41,686
Interest-bearing 71,688 70,251 74,275
Total deposits 116,529 111,244 115,961
       
Other Liabilities      
Other borrowings 5,300 5,300 5,300
Accrued interest payable and other liabilities 945 738 410
Total liabilities 122,774 117,282 121,671
       
Stockholders' Equity      
Common stock 11,917 11,909 11,908
Paid-in capital 11,798 11,790 11,789
Restricted stock - Unearned compensation (60) (96) (131)
Accumulated deficit (12,043) (12,555) (17,776)
Accumulated other comprehensive income (loss) 1 (74) (84)
       
Total stockholders' equity 11,613 10,974 5,706
       
Total liabilities and stockholders' equity $134,387 $128,256 $127,377
 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
         
(Dollars, in thousands)        
  (unaudited) (unaudited)
  Three Months Ended Six Months Ended
  6/30/2014 6/30/2013 6/30/2014 6/30/2013
Interest Income        
Interest and fees on loans $1,445 $1,373 $2,870 $2,678
Interest on investment securities: 33 20 75 47
Interest on federal funds sold 2 4 3 9
Total interest income 1,480 1,397 2,948 2,734
         
Interest Expense        
Deposits 51 80 105 165
Borrowings 83 84 167 169
Total interest expense 134 164 272 334
         
Net Interest Income 1,346 1,233 2,676 2,400
         
Provision for Possible Loan Losses  --  30  --  60
         
Net Interest Income after provision for possible loan losses        
  1,346 1,203 2,676 2,340
         
Noninterest Income        
Service fees on loan and deposit accounts 136 139 259 273
Loss on sale of other real estate owned (3) (2) (3) 44
Other 30 32 184 63
Total noninterest income 163 169 440 380
         
Noninterest Expense        
Salaries and employee benefits 695 588 1,425 1,219
Occupancy 146 152 289 306
Advertising 19 20 39 39
Outside processing 118 133 244 277
Professional fees 99 74 176 154
FDIC insurance 32 48 80 96
Defaulted loan expense 38 65 87 133
Other 130 110 264 215
Total noninterest expense 1,277 1,190 2,604 2,439
         
Income before income taxes 232 182 512 281
         
Income Tax Expense  --   --   --   -- 
         
Net Income $232 $182 $512 $281
 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
           
(Dollars in thousands, except share and per share data)          
  Quarter Ended
           
  6/30/2014 3/31/2014 12/31/2013 9/30/2013 6/30/2013
MARKET DATA          
Book value per share $3.58 $3.48 $3.38 $1.83 $1.76
Market value per share $4.30 $4.60 $5.00 $5.05 $5.05
Earnings per share - basic & diluted $0.07 $0.09 $1.55 $0.06 $0.06
Period end common shares 3,246,156 3,246,156 3,242,596 3,242,533 3,242,533
           
PERFORMANCE RATIOS          
Return on average assets 0.70% 0.87% 15.94% 0.66% 0.59%
Return on average assets - CSB 1.11% 1.29% 13.36% 1.15% 0.99%
Return on average equity 8.13% 10.06% 330.03% 14.25% 12.93%
Return on average equity - CSB 8.92% 10.49% 123.70% 12.47% 11.00%
Net interest margin - CSB 4.93% 5.03% 4.87% 4.78% 4.72%
Efficiency ratio 71.47% 82.60% 100.78% 85.70% 84.91%
Texas Ratio 11.36% 12.54% 13.18% 25.11% 24.92%
           
CAPITAL & LIQUIDITY          
Tier 1 Leverage - CSB 9.30% 9.17% 8.98% 8.59% 8.37%
Tier 1 Risk Based Capital - CSB 9.82% 9.96% 9.71% 9.56% 9.54%
Total Risk Based Capital - CSB 11.08% 11.21% 10.96% 10.82% 10.81%
Loan to deposit ratio 94.72% 91.04% 94.24% 90.85% 85.46%
           
ASSET QUALITY          
Gross loan charge-offs  $ --  $25 $65  $ --  $236
Net loan charge-offs $(20)  $ -- $42 $(24) $211
Allowance for loan and lease losses to total loans 1.67% 1.73% 1.74% 2.25% 2.33%
Nonperforming loans to total loans 0.13% 0.14% 0.27% 0.79% 0.71%
Nonperforming assets to total assets 1.15% 1.24% 1.31% 2.58% 2.46%
 
CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
       
  (unaudited)   (unaudited)
CATEGORY 6/30/2014 12/31/2013 6/30/2013
       
Commercial Loans $13,474 $12,727 $14,139
Real Estate Mortgage Loans:      
Commercial 86,389 82,874 74,780
1-4 Residential 5,601 6,017 6,596
Construction and other 4,770 3,017 3,442
Total mortgage loans on real estate 96,760 91,908 84,818
Consumer 145 201 146
Total Loans 110,379 104,836 99,103
Less: Allowance for loan losses (1,842) (1,821) (2,309)
Net Loans $108,537 $103,015 $96,794
       
       
  (unaudited)   (unaudited)
ASSET QUALITY 6/30/2014 12/31/2013 6/30/2013
       
Total nonaccrual loans $144 $279 $507
Total loans past due 90 days or more and still accruing  --   --  199
Total nonperforming loans 144 279 706
Other real estate owned 1,396 1,396 2,422
Total nonperforming assets $1,540 $1,675 $3,128
Media Contact: Clarkston Financial Corporation -
J. Grant Smith, CEO, 248-922-6945