Clarkston Financial Corporation Reports 2016 Q1 Results


CLARKSTON, Mich., April 21, 2016 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $195,000 or $0.06 per share for the three months ended March 31, 2016, compared to net income of $252,000 or $0.07 per share for the three months ended March 31, 2015.  The decrease in income is directly related to a one time gain recognized in the first quarter of 2015.  Adjusting for the gain, the corporation realized an increase in net income of $155,000 quarter over quarter.

J. Grant Smith, CEO, said, "We are very pleased with the financial results for the first quarter. Loan originations were very good and our core deposit base continues to be outstanding when compared to our peer group. The Bank’s net interest margin continues to be one of the best not only in our region but measured against our peer group as well. We expect our operating expenses to decline the remainder of the year as we have streamlined our branch and retail network. The reduction in operating expenses when combined with our excellent net interest margin will propel our earnings performance as we move throughout the remainder of the year.”    

Operating Results

The Corporation’s net interest income increased to $1,551,000 for the quarter ended March 31, 2016 compared to $1,331,000 for the same period ended March 31, 2015, an increase of $220,000 or 16.53%.  The net interest margin of the Bank remains elevated compared to peers, but has realized some compression, ending at 4.29% for the quarter ended March 31, 2016, down from 4.43% for the quarter ended March 31, 2015. 

Noninterest income decreased in the first quarter 2016.  The quarter ended at $139,000 compared to $451,000 for the quarter ended March 31, 2015, a decrease of $312,000 or 69.18%.  This decrease was largely driven by gains associated to with the sale of the Bank’s downtown Clarkston office which was sold in March 2015.  Noninterest expense decreased, ending the first quarter 2016 at $1,368,000 compared to $1,400,000 for the same period ended March 31, 2015, a decrease of $32,000 or 2.29%. 

Balance Sheet

Total assets at March 31, 2016 were $182,148,000 compared to $147,639,000 at March 31, 2015, an increase of $34,509,000 or 23.37%.  The increase in total assets represents a $10,029,000 increase in cash as a result of an increase in noninterest bearing demand deposits. 

Gross loans increased $23,331,000 from $113,945,000 at March 31, 2015 to $137,276,000 at March 31, 2016, an increase of 20.48%.  Total deposits increased $33,900,000 or 26.43%, ending at $162,168,000 for March 31, 2016, up from $128,268,000 at March 31, 2015.  Total stockholders’ equity increased from $13,165,000 at March 31, 2015 to $14,114,000 at March 31, 2016, an increase of $949,000 or 7.21%. 

Asset Quality

As of March 31, 2016, the Bank did not have any non-performing loans compared to $219,000 from the same period in 2015.  The allowance for loan loss decreased to 1.13% of total loans as of March 31, 2016, compared to 1.55% for the same period in 2015.  Management continually monitors the allowance for loan loss to determine its adequacy.

Clarkston State Bank opened in January 1999 and operates two branches in Clarkston and Waterford, 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)
  3/31/2016 12/31/2015 3/31/2015
Assets      
       
Cash and due from banks $  24,502  $  24,264  $  14,473 
Securities – Available for sale  9,319   9,649   7,441 
Federal Home Loan Bank stock, at cost  232   232   409 
       
Loans  137,276   127,028   113,945 
Allowance for possible loan losses  (1,544)  (1,529)  (1,771)
Net loans  135,732   125,499   112,174 
       
Banking premises and equipment  3,873   3,915   4,436 
Deferred tax asset  6,177   6,299   6,663 
Other real estate owned  1,581   1,581   1,396 
Accrued interest receivable and other assets  732   863   647 
Total assets $  182,148   $  172,302   $  147,639  
       
Liabilities and Stockholders' Equity      
Liabilities      
Deposits      
Noninterest-bearing demand deposits  85,781   82,408   52,367 
Interest-bearing  76,387   69,959   75,901 
Total deposits  162,168   152,367   128,268 
       
Other Liabilities      
Other borrowings  5,570   5,621   5,775 
Accrued interest payable and other liabilities  296   421   431 
Total liabilities  168,034   158,409   134,474 
       
Stockholders' Equity      
Common stock  11,945   11,945   11,945 
Paid-in capital  11,826   11,826   11,826 
Restricted stock - Unearned compensation  (42)  (45)  (60)
Accumulated deficit  (9,594)  (9,789)  (10,567)
Accumulated other comprehensive (loss) income  (21)  (45)  21 
Total stockholders' equity  14,114   13,893   13,165 
Total liabilities and stockholders' equity $  182,148   $  172,302   $  147,639  


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars, in thousands)   
 (unaudited)
 Three Months Ended
 3/31/2016 3/31/2015
Interest Income   
Interest and fees on loans$  1,602  $  1,433 
Interest on investment securities: 57   37 
Interest on federal funds sold 8   5 
Total interest income 1,667   1,475 
    
Interest Expense   
Deposits 45   53 
Borrowings 71   91 
Total interest expense 116   144 
Net Interest Income 1,551   1,331 
Provision for Possible Loan Losses   -   - 
Net Interest Income after provision for possible loan losses   
 1,551  1,331 
Noninterest Income   
Service fees on loan and deposit accounts 116   114 
Other 23   337 
Total noninterest income 139   451 
    
Noninterest Expense   
Salaries and employee benefits 847   828 
Occupancy 127   150 
Advertising 35   28 
Outside processing 122   118 
Professional fees 44   55 
FDIC insurance 27   23 
Defaulted loan expense 34   53 
Other 132   145 
Total noninterest expense 1,368   1,400 
Income before income taxes 322   382 
Income Tax Benefit   127     130 
    
Net Income$  195  $  252 


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
       
(Dollars in thousands, except share and per share data)     
  Quarter Ended
       
  3/31/201612/31/20159/30/20156/30/20153/31/2015
MARKET DATA      
Book value per share $  4.33 $   4.26 $  4.19 $  4.09 $   4.04 
Market value per share $  4.00 $   3.70 $  4.30 $  3.32 $  4.00 
Earnings per share - basic & diluted $  0.06 $  0.07 $  0.10 $  0.07 $   0.07 
Period end common shares  3,261,156  3,261,156  3,261,156  3,261,156  3,261,156 
       
PERFORMANCE RATIOS      
Return on average assets  0.46% 0.57% 0.91% 0.59% 0.69%
Return on average equity  5.64% 6.62% 9.99% 6.52% 7.81%
Net interest margin - CSB  4.29% 4.29% 4.41% 4.42% 4.43%
Efficiency ratio  80.97% 94.80% 71.40% 79.00% 78.59%
Texas Ratio  10.15% 10.90% 9.72% 11.60% 11.59%
                 
CAPITAL & LIQUIDITY                
Tier 1 Leverage - CSB  8.40% 8.46% 8.85% 8.55% 8.71%
Common Equity Tier 1 Capital - CSB  9.57% 9.09% 9.15% 9.18% 9.84%
Tier 1 Risk Based Capital - CSB  9.57% 9.09% 9.15% 9.18% 9.84%
Total Risk Based Capital - CSB  10.62% 10.36% 10.40% 10.43% 11.10%
Loan to deposit ratio  84.65% 83.37% 89.40% 94.13% 88.83%
                 
ASSET QUALITY                
Gross loan charge-offs $   - $  14 $  - $   3 $  249 
Net loan charge-offs (recoveries) $  (16)$   (3)$   (16)$  (14)$  101 
Allowance for loan and lease losses to total loans  1.12% 1.20% 1.47% 1.49% 1.55%
Nonperforming loans to total loans  0.00% 0.00% 0.00% 0.17% 0.19%
Nonperforming assets to total assets  0.87% 0.92% 0.89% 1.09% 1.09%


CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
      
 (unaudited)   (unaudited)
CATEGORY3/31/2016 12/31/2015 3/31/2015
      
Commercial Loans$  16,552  $  14,126  $  11,852 
Real Estate Mortgage Loans:     
Commercial   110,616     102,098     91,430 
1-4 Residential   3,797     4,077     4,794 
Construction and other   760     1,369     3,723 
Total mortgage loans on real estate   115,173     107,544     99,947 
Consumer   5,551     5,358     2,146 
Total Loans   137,276     127,028     113,945 
Less:  Allowance for loan losses   (1,544)    (1,529)    (1,771)
Net Loans$  135,732  $  125,499  $  112,174 
      
      
 (unaudited)   (unaudited)
ASSET QUALITY3/31/2016 12/31/2015 3/31/2015
      
Total nonaccrual loans$  -   $  -   $  219 
Total loans past due 90 days or more and still accruing   -      -      -  
Total nonperforming loans   -      -      219 
Other real estate owned   1,581     1,581     1,396 
Total nonperforming assets$  1,581  $  1,581  $  1,615 

 


            

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