CLARKSTON, Mich., Feb. 10, 2015 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported net income of $926,000 or $0.29 per share for the three months ended December 31, 2014, compared to net income of $5,016,000 or $1.55 per share for the three months ended December 31, 2013. For the twelve months ended December 31, 2014, the corporation reported net income of $1,736,000 or $0.59 per share compared to a net income of $5,502,000 or $1.70 per share for the same period in 2013. The decrease in earnings year over year is directly attributable to the tax effects of reversing the valuation allowance against the deferred tax asset made in 2013 and 2014. Pretax net income for the twelve months ended December 31, 2014 was $1,078,000 compared to $945,000 for December 31, 2013. This represents a year over year increase of $133,000 or 14.07% in pretax income for the Corporation.
J. Grant Smith, CEO, said, "The Bank posted outstanding financial results in 2014. We had great success with the rollout of additional electronic banking products, increased our loan portfolio and continued the expansion of our strong core deposit base. In December 2014, the Board of Directors made a decision to close two of our retail branches to reflect the changing behavior of our customers and the potential growth within the marketplace with an emphasis on electronic delivery systems. Our two full service retail branches combined with the latest electronic delivery systems will further complement our suite of products and give our customers more electronic tools to interface with our Bank. The market continues to evolve as it relates to smart phones, tablets etc. and we are adapting our business model to this paradigm shift. We are very proud of our team and we look forward to further expanding our market share in 2015."
Operating Results
The Corporation's net interest income increased to $1,353,000 for the quarter ended December 31, 2014 compared to $1,320,000 for the same period ended December 31, 2013. This represents a 2.50% increase over the prior year. The net interest margin of the Bank experienced compression due to stiffer loan competition, ending at 4.50% for the quarter ended December 31, 2014, down from 4.87% for the quarter ended December 31, 2013. However, the Bank's net interest margin continues to exceed peer levels.
Noninterest income had a decrease in the fourth quarter 2014, increased due to the write down of one of the Bank's two remaining other real estate owned properties reflected in 2013. The quarter ended at $203,000 compared to $92,000 for the quarter ended December 31, 2013, an increase of $111,000 or 120.65%. Noninterest expense continued to decline year over year, ending the fourth quarter 2014 at $1,288,000 compared to $1,423,000 for the same period ended December 31, 2013, a decrease of $135,000 or 9.49%. The decrease represents a decline in the expense related to troubled loans among other operating expenses.
Balance Sheet
Total assets at December 31, 2014 were $144,379,000 compared to $128,256,000 at December 31, 2013, an increase of $16,123,000 or 12.57%.
Total loans increased $9,792,000 from $103,015,000 at December 31, 2013 to $112,807,000 at December 31, 2014, an increase of 9.51%. Total deposits increased $14,124,000 or 1.27%, ending at $125,368,000 for December 31, 2014, up from $111,244,000 at December 31, 2013. Noninterest bearing demand deposits increased $11,926,000 from December 2013 to December 2014, reflecting an increase of 29.09%.
Total stockholders' equity increased from $10,974,000 at December 31, 2013 to $12,889,000 at December 31, 2014, an increase of $1,915,000 or 17.45%. This increase is due to the net income in 2014, mainly driven by the recapture of the remaining $1,000,000 in previously disallowed deferred tax asset in 2014. There is no longer any valuation allowance against the deferred tax asset.
Asset Quality
Total non-performing loans decreased to $144,000 at December 31, 2014 compared to $279,000 from the same period 2013, a decrease of $135,000, or 48.39%. The allowance for loan loss decreased to 1.63% of total loans as of December 31, 2014, compared to 1.74% 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) | ||
| 12/31/2014 | 12/31/2013 | |
| Assets | ||
| Cash and cash equivalents | $ 11,908 | $ 5,154 |
| Securities – Available for sale | 5,581 | 6,689 |
| Federal Home Loan Bank stock, at cost | 409 | 556 |
| Loans | 114,680 | 104,836 |
| Allowance for possible loan losses | (1,873) | (1,821) |
| Net loans | 112,807 | 103,015 |
| Banking premises and equipment | 4,809 | 4,814 |
| Deferred tax asset | 6,793 | 6,115 |
| Other real estate owned | 1,396 | 1,396 |
| Accrued interest receivable and other assets | 676 | 517 |
| Total assets | $ 144,379 | $ 128,256 |
| Liabilities and Stockholders' Equity (Deficit) | ||
| Liabilities | ||
| Deposits | ||
| Noninterest-bearing demand deposits | 52,919 | 40,993 |
| Interest-bearing | 72,449 | 70,251 |
| Total deposits | 125,368 | 111,244 |
| Other Liabilities | ||
| Other borrowings | 5,625 | 5,300 |
| Accrued interest payable and other liabilities | 497 | 738 |
| Total liabilities | 131,490 | 117,282 |
| Stockholders' Equity | ||
| Common stock | 11,917 | 11,909 |
| Paid-in capital | 11,798 | 11,790 |
| Restricted stock - Unearned compensation | (24) | (96) |
| Accumulated deficit | (10,819) | (12,555) |
| Accumulated other comprehensive income (loss) | 17 | (74) |
| Total stockholders' equity | 12,889 | 10,974 |
| Total liabilities and stockholders' equity | $ 144,379 | $ 128,256 |
| CLARKSTON FINANCIAL CORPORATION | ||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||
| (Dollars, in thousands) | ||||
| (unaudited) | (unaudited) | |||
| Three Months Ended | Twelve Months Ended | |||
| 12/31/2014 | 12/31/2013 | 12/31/2014 | 12/31/2013 | |
| Interest Income | ||||
| Interest and fees on loans | $ 1,466 | $ 1,425 | $ 5,802 | $ 5,502 |
| Interest on investment securities: | 35 | 39 | 141 | 113 |
| Interest on federal funds sold | 5 | 3 | 9 | 17 |
| Total interest income | 1,506 | 1,467 | 5,952 | 5,632 |
| Interest Expense | ||||
| Deposits | 53 | 61 | 210 | 294 |
| Borrowings | 100 | 86 | 347 | 342 |
| Total interest expense | 153 | 147 | 557 | 636 |
| Net Interest Income | 1,353 | 1,320 | 5,395 | 4,996 |
| Provision for Possible Loan Losses | -- | (470) | -- | (410) |
| Net Interest Income after provision for possible loan losses | 1,353 | 1,790 | 5,395 | 5,406 |
| Noninterest Income | ||||
| Service fees on loan and deposit accounts | 126 | 123 | 518 | 527 |
| Gain on sale of securities | -- | -- | -- | -- |
| Loss on sale of other real estate owned | -- | (316) | (3) | (273) |
| Other | 77 | 285 | 322 | 379 |
| Total noninterest income | 203 | 92 | 837 | 633 |
| Noninterest Expense | ||||
| Salaries and employee benefits | 758 | 754 | 2,893 | 2,591 |
| Occupancy | 152 | 143 | 584 | 598 |
| Advertising | 20 | 10 | 83 | 71 |
| Outside processing | 117 | 138 | 479 | 553 |
| Professional fees | 55 | 108 | 300 | 359 |
| FDIC insurance | 21 | 47 | 143 | 191 |
| Defaulted loan expense | 36 | 63 | 154 | 255 |
| Other | 129 | 160 | 518 | 476 |
| Total noninterest expense | 1,288 | 1,423 | 5,154 | 5,094 |
| Income/(Loss) before income taxes | 268 | 459 | 1,078 | 945 |
| Income Tax Benefit | (658) | (4,557) | (658) | (4,557) |
| Net Income/(Loss) | $ 926 | $ 5,016 | $ 1,736 | $ 5,502 |
| CLARKSTON FINANCIAL CORPORATION | |||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | |||||
| (Dollars in thousands, except share and per share data) | |||||
| Quarter Ended | |||||
| 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | |
| MARKET DATA | |||||
| Book value per share | $ 3.97 | $ 3.67 | $ 3.58 | $ 3.48 | $ 3.38 |
| Market value per share | $ 3.77 | $ 4.35 | $ 4.30 | $ 4.60 | $ 5.00 |
| Earnings per share - basic & diluted | $ 0.29 | $ 0.09 | $ 0.07 | $ 0.09 | $ 1.55 |
| Period end common shares | 3,246,156 | 3,246,156 | 3,246,156 | 3,246,156 | 3,242,596 |
| PERFORMANCE RATIOS | |||||
| Return on average assets | 2.59% | 0.87% | 0.70% | 0.87% | 15.94% |
| Return on average assets - CSB | 2.47% | 1.21% | 1.11% | 1.29% | 13.36% |
| Return on average equity | 30.80% | 10.21% | 8.13% | 10.06% | 330.03% |
| Return on average equity - CSB | 21.05% | 9.82% | 8.92% | 10.49% | 123.70% |
| Net interest margin - CSB | 4.50% | 4.71% | 4.93% | 5.03% | 4.87% |
| Efficiency ratio | 82.80% | 80.84% | 84.64% | 82.60% | 100.78% |
| Texas Ratio | 11.10% | 11.40% | 11.36% | 12.54% | 13.18% |
| CAPITAL & LIQUIDITY | |||||
| Tier 1 Leverage - CSB | 8.78% | 8.82% | 9.30% | 9.17% | 8.98% |
| Tier 1 Risk Based Capital - CSB | 9.68% | 9.52% | 9.82% | 9.96% | 9.71% |
| Total Risk Based Capital - CSB | 10.93% | 10.77% | 11.08% | 11.21% | 10.96% |
| Loan to deposit ratio | 91.47% | 91.23% | 94.72% | 91.04% | 94.24% |
| ASSET QUALITY | |||||
| Gross loan charge-offs | $ -- | $ 11 | $ -- | $ 25 | $ 65 |
| Net loan charge-offs (recoveries) | $ (20) | $ (12) | $ (20) | $ -- | $ 42 |
| Allowance for loan and lease losses to total loans | 1.63% | 1.65% | 1.67% | 1.73% | 1.74% |
| Nonperforming loans to total loans | 0.13% | 0.13% | 0.13% | 0.14% | 0.27% |
| Nonperforming assets to total assets | 1.07% | 1.09% | 1.15% | 1.24% | 1.31% |
| CLARKSTON FINANCIAL CORPORATION | ||
| LOAN INFORMATION | ||
| (unaudited) | ||
| CATEGORY | 12/31/2014 | 12/31/2013 |
| Commercial Loans | $ 13,776 | $ 12,727 |
| Real Estate Mortgage Loans: | ||
| Commercial | 91,497 | 82,874 |
| 1-4 Residential | 5,086 | 6,017 |
| Construction and other | 4,136 | 3,017 |
| Total mortgage loans on real estate | 100,719 | 91,908 |
| Consumer | 185 | 201 |
| Total Loans | 114,680 | 104,836 |
| Less: Allowance for loan losses | (1,873) | (1,821) |
| Net Loans | $ 112,807 | $ 103,015 |
| (unaudited) | ||
| ASSET QUALITY | 12/31/2014 | 12/31/2013 |
| Total nonaccrual loans | $ 144 | $ 279 |
| Total loans past due 90 days or more and still accruing | -- | -- |
| Total nonperforming loans | 144 | 279 |
| Other real estate owned | 1,396 | 1,396 |
| Total nonperforming assets | $ 1,540 | $ 1,675 |