Source: Clarkston Financial Corporation
Clarkston Financial Corporation Reports 2014 Q2 Results
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 |