CLARKSTON, Mich., Oct. 30, 2014 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $299,000 or $0.09 per share for the three months ended September 30, 2014, compared to net income of $205,000 or $.06 per share for the three months ended September 30, 2013. For the nine months ended September 30, 2014, the corporation reported net income of $811,000 or $0.25 per share compared to a net income of $486,000 or $0.15 per share for the same period in 2013.
J. Grant Smith, CEO, said, "The positive operating performance of the Bank continues. Local market conditions are improving which has translated into new opportunities for loans and deposits. We expect to achieve our financial goals established at the start of the year and we remain confident our team will continue to grow our balance sheet."
Operating Results
The Corporation's net interest income increased to $1,366,000 for the quarter ended September 30, 2014 compared to $1,275,000 for the same period ended September 30, 2013. The net interest margin of the Bank showed a slight decrease, ending at 4.71% for the quarter ended September 30, 2014, down from 4.78% for the quarter ended September 30, 2013. The decrease in net interest margin is representative of the competitive lending environment of today's market.
Noninterest income increased in the third quarter due to one-time gains recognized in the third quarter of 2014 associated with the guaranteed portion of SBA loans, which were sold off. The quarter ended at $194,000 compared to $161,000 for the quarter ended September 30, 2013, an increase of $33,000 or 20.50%. Noninterest expense continued to increase, ending the third quarter 2014 at $1,261,000 compared to $1,231,000 for the same period ended September 30, 2013, an increase of $30,000 or 2.44%.
Balance Sheet
Total assets at September 30, 2014 were $141,587,000 compared to $126,008,000 at September 30, 2013, an increase of $15,579,000 or 12.36%. The growth in assets is attributable to increases in deposits, as well as the reversal of the valuation allowance against the deferred tax asset in December 2013.
Total loans increased $9,139,000 from $101,322,000 at September 30, 2013 to $110,461,000 at September 30, 2014, an increase of 9.02%. Total deposits increased $9,016,000 or 7.90%, ending at $123,110,000 for September 30, 2014, up from $114,094,000 at September 30, 2013. Noninterest bearing demand deposits increased $9,304,000 from September 30, 2013 to September 30, 2014, reflecting an increase of 20.79%.
Total stockholders' equity increased from $5,947,000 at September 30, 2013 to $11,921,000 at September 30, 2014, an increase of $5,974,000 or 100.45%. This increase is attributable to improvements in net income in 2013 and 2014, mainly driven by the recapture of $4,906,000 in the previously disallowed deferred tax asset in 2013.
Asset Quality
Total non-performing loans decreased to $144,000 at September 30, 2014 compared to $816,000 from the same period in 2013, a decrease of $672,000, or 82.35%. The allowance for loan loss decreased to 1.65% of total loans as of September 30, 2014, compared to 2.25% for the same period ended 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) 9/30/2014 |
12/31/2013 |
(unaudited) 9/30/2013 |
||||
| Assets | ||||||
| Cash and due from banks | $ 11,874 | $ 5,154 | $ 7,938 | |||
| Securities – Available for sale | 5,828 | 6,689 | 7,013 | |||
| Federal Home Loan Bank stock, at cost | 556 | 556 | 556 | |||
| Loans | 112,314 | 104,836 | 103,655 | |||
| Allowance for possible loan losses | (1,853) | (1,821) | (2,333) | |||
| Net loans | 110,461 | 103,015 | 101,322 | |||
| Banking premises and equipment | 4,851 | 4,814 | 4,815 | |||
| Deferred tax asset | 6,077 | 6,115 | 1,534 | |||
| Other real estate owned | 1,396 | 1,396 | 2,436 | |||
| Accrued interest receivable and other assets | 544 | 517 | 394 | |||
| Total assets | $ 141,587 | $ 128,256 | $ 126,008 | |||
| Liabilities and Stockholders' Equity | ||||||
| Liabilities | ||||||
| Deposits | ||||||
| Noninterest-bearing demand deposits | 54,052 | 40,993 | 44,748 | |||
| Interest-bearing | 69,058 | 70,251 | 69,346 | |||
| Total deposits | 123,110 | 111,244 | 114,094 | |||
| Other Liabilities | ||||||
| Other borrowings | 5,625 | 5,300 | 5,400 | |||
| Accrued interest payable and other liabilities | 931 | 738 | 567 | |||
| Total liabilities | 129,666 | 117,282 | 120,061 | |||
| Stockholders' Equity | ||||||
| Common stock | 11,917 | 11,909 | 11,908 | |||
| Paid-in capital | 11,798 | 11,790 | 11,789 | |||
| Restricted stock - Unearned compensation | (42) | (96) | (113) | |||
| Accumulated deficit | (11,744) | (12,555) | (17,571) | |||
| Accumulated other comprehensive loss | (8) | (74) | (66) | |||
| Total stockholders' equity | 11,921 | 10,974 | 5,947 | |||
| Total liabilities and stockholders' equity | $ 141,587 | $ 128,256 | $ 126,008 | |||
| CLARKSTON FINANCIAL CORPORATION | ||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||
| (Dollars, in thousands) | ||||||||
|
(unaudited) Three Months Ended |
(unaudited) Nine Months Ended |
|||||||
| 9/30/2014 | 9/30/2013 | 9/30/2014 | 9/30/2013 | |||||
| Interest Income | ||||||||
| Interest and fees on loans | $ 1,466 | $ 1,399 | $ 4,336 | $ 4,077 | ||||
| Interest on investment securities | 31 | 28 | 106 | 75 | ||||
| Interest on federal funds sold | 2 | 4 | 5 | 14 | ||||
| Total interest income | 1,499 | 1,431 | 4,447 | 4,166 | ||||
| Interest Expense | ||||||||
| Deposits | 53 | 69 | 157 | 233 | ||||
| Borrowings | 80 | 87 | 248 | 257 | ||||
| Total interest expense | 133 | 156 | 405 | 490 | ||||
| Net Interest Income | 1,366 | 1,275 | 4,042 | 3,676 | ||||
| Provision for Possible Loan Losses | -- | -- | -- | 60 | ||||
| Net Interest Income after provision for possible loan losses | 1,366 | 1,275 | 4,042 | 3,616 | ||||
| Noninterest Income | ||||||||
| Service fees on loan and deposit accounts | 132 | 131 | 391 | 404 | ||||
| Loss on sale of other real estate owned | -- | -- | (3) | 44 | ||||
| Other | 62 | 30 | 246 | 93 | ||||
| Total noninterest income | 194 | 161 | 634 | 541 | ||||
| Noninterest Expense | ||||||||
| Salaries and employee benefits | 710 | 618 | 2,135 | 1,837 | ||||
| Occupancy | 142 | 149 | 431 | 455 | ||||
| Advertising | 24 | 21 | 63 | 60 | ||||
| Outside processing | 118 | 138 | 362 | 415 | ||||
| Professional fees | 69 | 97 | 244 | 251 | ||||
| FDIC insurance | 41 | 47 | 121 | 143 | ||||
| Defaulted loan expense | 31 | 59 | 118 | 192 | ||||
| Other | 126 | 102 | 391 | 318 | ||||
| Total noninterest expense | 1,261 | 1,231 | 3,865 | 3,671 | ||||
| Net Income | $ 299 | $ 205 | $ 811 | $ 486 | ||||
| CLARKSTON FINANCIAL CORPORATION | |||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||
| (Dollars in thousands, except share and per share data) | |||||
| Quarter Ended | |||||
| 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |
| MARKET DATA | |||||
| Book value per share | $ 3.67 | $ 3.58 | $ 3.48 | $ 3.38 | $ 1.83 |
| Market value per share | $ 4.35 | $ 4.30 | $ 4.60 | $ 5.00 | $ 5.05 |
| Earnings per share - basic & diluted | $ 0.09 | $ 0.07 | $ 0.09 | $ 1.55 | $ 0.06 |
| Period end common shares | 3,246,156 | 3,246,156 | 3,246,156 | 3,242,596 | 3,242,533 |
| PERFORMANCE RATIOS | |||||
| Return on average assets | 0.87% | 0.70% | 0.87% | 15.94% | 0.66% |
| Return on average assets - CSB | 1.21% | 1.11% | 1.29% | 13.36% | 1.15% |
| Return on average equity | 10.21% | 8.13% | 10.06% | 330.03% | 14.25% |
| Return on average equity - CSB | 9.82% | 8.92% | 10.49% | 123.70% | 12.47% |
| Net interest margin - CSB | 4.71% | 4.93% | 5.03% | 4.87% | 4.78% |
| Efficiency ratio | 80.84% | 84.64% | 82.60% | 100.78% | 85.70% |
| Texas Ratio | 11.40% | 11.36% | 12.54% | 13.18% | 25.11% |
| CAPITAL & LIQUIDITY | |||||
| Tier 1 Leverage - CSB | 8.82% | 9.30% | 9.17% | 8.98% | 8.59% |
| Tier 1 Risk Based Capital - CSB | 9.52% | 9.82% | 9.96% | 9.71% | 9.56% |
| Total Risk Based Capital - CSB | 10.77% | 11.08% | 11.21% | 10.96% | 10.82% |
| Loan to deposit ratio | 91.23% | 94.72% | 91.04% | 94.24% | 90.85% |
| ASSET QUALITY | |||||
| Gross loan charge-offs | $ 11 | $ -- | $ 25 | $ 65 | $ 0 |
| Net loan charge-offs | $ (12) | $ (20) | $ 0 | $ 42 | $ (24) |
| Allowance for loan and lease losses to total loans | 1.65% | 1.67% | 1.73% | 1.74% | 2.25% |
| Nonperforming loans to total loans | 0.13% | 0.13% | 0.14% | 0.27% | 0.79% |
| Nonperforming assets to total assets | 1.09% | 1.15% | 1.24% | 1.31% | 2.58% |
| CLARKSTON FINANCIAL CORPORATION | |||
| LOAN INFORMATION | |||
| CATEGORY |
(unaudited) 9/30/2014 |
12/31/2013 |
(unaudited) 9/30/2013 |
| Commercial Loans | $ 12,182 | $ 12,727 | $ 13,616 |
| Real Estate Mortgage Loans: | |||
| Commercial | 90,782 | 82,874 | 81,291 |
| 1-4 Residential | 5,585 | 6,017 | 6,239 |
| Construction and other | 3,565 | 3,017 | 2,387 |
| Total mortgage loans on real estate | 99,932 | 91,908 | 89,917 |
| Consumer | 200 | 201 | 122 |
| Total Loans | 112,314 | 104,836 | 103,655 |
| Less: Allowance for loan losses | (1,853) | (1,821) | (2,333) |
| Net Loans | $ 110,461 | $ 103,015 | $ 101,322 |
| ASSET QUALITY |
(unaudited) 9/30/2014 |
12/31/2013 |
(unaudited) 9/30/2013 |
| Total nonaccrual loans | $ 144 | $ 279 | $ 816 |
| Total loans past due 90 days or more and still accruing | -- | -- | -- |
| Total nonperforming loans | 144 | 279 | 816 |
| Other real estate owned | 1,396 | 1,396 | 2,436 |
| Total nonperforming assets | $ 1,540 | $ 1,675 | $ 3,252 |