Clarkston Financial Corporation Reports 2017 Q3 Results


CLARKSTON, Mich., Oct. 30, 2017 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) - (News), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $407,000 or $0.13 per share for the three months ended September 30, 2017, compared to net income of $371,000 or $0.11 per share for the three months ended September 30, 2016. For the nine months ended September 30, 2017, the corporation reported net income of $1,541,000 or $0.47 per share compared to net income of $881,000 or $0.27 per share for the same period in 2016.

J. Grant Smith, CEO, said, "Our performance continues to outpace the prior quarter as well as year over year. Our team is working very diligently while maintaining discipline with both expense control and loan portfolio concentrations. We are continuing with our efforts to lower our concentration in investor real estate while at the same time improving our regulatory capital. Both our efficiency and noninterest expense ratios at the Bank are lower than our peers. We are continuing with our strategic plan which calls for the Bank to lower our investor real estate concentration levels, increase regulatory capital and outperform our peers when it comes to expense control. Our financial results for the past quarter reflects the efforts of our team and the precise execution of our strategy. We expect more of the same execution as we move throughout the fourth quarter.”  

Operating Results

The Corporation’s net interest income increased slightly to $1,769,000 for the quarter ended September 30, 2017 compared to $1,618,000 for the same period ended September 30, 2016.  This represents an increase of $151,000 or 9.33% quarter over quarter.  This increase is due to the growth in our loan portfolio and disciplined expense control. The net interest margin of the Bank remains above its peer group average ending at 3.88% for the quarter ended September 30, 2017. 

Noninterest income decreased during the third quarter of 2017 when compared to the third quarter 2016.  The Corporation posted $125,000 for the quarter compared to $195,000 for the quarter ended September 30, 2016, a decrease of $70,000 or 35.90%.  The decrease is mostly attributable to gains realized in 2016 on the sale of SBA loans. Noninterest expense increased, ending the third quarter at $1,230,000 compared to $1,195,000 for the same period ended September 30, 2016, an increase of $35,000 or 3.00%.  However, year-to-date the Corporation’s noninterest expense for 2017 was 4.17% or $160,000 lower at $3,678,000 compared to $3,838,000 in 2016.

Balance Sheet

Total assets at September 30, 2017 were $203,763,000 compared to $176,814,000 at September 30, 2016, an increase of $26,949,000 or 15.24%.  The increase in assets is mainly due to an increase of loans.

Gross loans increased $22,622,000 from $149,027,000 at September 30, 2016, to $171,649,000 at September 30, 2017, an increase of 15.18%.  Total deposits increased $27,850,000 or 18.15%, ending at $181,323,000 for September 30, 2017, up from $153,473,000 for September 30, 2016.  Total stockholders’ equity increased from $14,852,000 at September 30, 2016 to $16,814,000 at September 30, 2017, an increase of $1,962,000 or 13.21%. 

Asset Quality

There was one non-performing loan at September 30, 2017 for $168,000 compared to none for the same period in 2016.  The allowance for loan loss increased to 1.17% of total loans as of September 30, 2017 compared to 1.07% for the same period 2016.  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.

Media Contact: Clarkston Financial Corporation – J. Grant Smith, CEO, 248-922-6945.


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
       
(Dollars, in thousands)      
  (unaudited)   (unaudited)
  9/30/2017 12/31/2016 9/30/2016
Assets      
       
Cash and due from banks $  16,717  $  9,004  $  7,214 
Securities – Available for sale  7,337   8,481   10,558 
Federal Home Loan Bank stock, at cost  232   232   232 
       
Loans  171,649   151,887   149,027 
Allowance for possible loan losses  (2,004)  (1,767)  (1,593)
Net loans  169,644   150,119   147,434 
       
Banking premises and equipment  3,620   3,682   3,726 
Deferred tax asset  4,783   5,595   5,782 
Other real estate owned  721   1,221   1,221 
Accrued interest receivable and other assets  708   674   647 
Total assets $  203,763   $  179,007   $  176,814  
       
Liabilities and Stockholders' Equity      
Liabilities      
Deposits      
Noninterest-bearing demand deposits  79,981   80,217   83,635 
Interest-bearing  101,343   77,625   69,838 
Total deposits  181,323   157,842   153,473 
       
Other Liabilities      
Federal Home Loan Bank advances  0   0   2,500 
Other borrowings  5,263   5,416   5,468 
Accrued interest payable and other liabilities  364   560   521 
Total liabilities  186,949   163,818   161,962 
       
Stockholders' Equity      
Common stock  11,923   11,923   11,945 
Paid-in capital  11,804   11,804   11,826 
Restricted stock - Unearned compensation  0   0   (37)
Accumulated deficit  (6,855)  (8,396)  (8,908)
Accumulated other comprehensive income  (loss)  (57)  (141)  26 
       
Total stockholders' equity  16,814   15,189   14,852 
       
Total liabilities and stockholders' equity $  203,763   $  179,007   $  176,814  



CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
        
(Dollars, in thousands)       
 (unaudited) (unaudited)
 Three Months Ended Nine Months Ended
 9/30/2017 9/30/2016 9/30/2017 9/30/2016
Interest Income       
Interest and fees on loans$1,926 $1,667 $5,569  $4,925 
Interest on investment securities: 34  44  119   149 
Interest on federal funds sold 17  11  31   40 
Total interest income 1,978  1,722  5,718   5,114 
        
Interest Expense       
Deposits 160  42  347   129 
Borrowings 49  63  182   196 
Total interest expense 209  104  529   325 
        
Net Interest Income 1,769  1,618  5,190   4,789 
        
Provision for Possible Loan Losses  
  45
    30    (265)    30 
        
Net Interest Income after provision for possible loan losses       
 1,724 1,588  5,455  4,759 
        
Noninterest Income       
Service fees on loans and deposits 115  124  355   368 
Gain on sale of securities 0  0  0   0 
Gain/(Loss) on sale of other real estate owned 0  0  4   (14)
Other 11  71  227   139 
Total noninterest income 125  195  586   493 
        
Noninterest Expense       
Salaries and employee benefits 742  703  2,204   2,277 
Occupancy 127  122  370   372 
Advertising 40  35  110   105 
Outside processing 126  116  367   356 
Professional fees 50  41  129   139 
FDIC insurance 13  32  60   85 
Defaulted loan expense 5  22  16   125 
Other 127  124  422   379 
Total noninterest expense 1,230  1,195  3,678   3,838 
        
Income/(Loss) before income taxes 620  588  2,362   1,414 
        
Income Tax Expense   213    217    821     533 
        
Net Income/(Loss)$407 $371 $1,541  $881 


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
       
(Dollars in thousands, except share and per share data) Quarter Ended
       
  09/30/1706/30/1703/31/1712/31/1609/30/16
MARKET DATA      
Book value per share $  5.17 $  5.05 $  4.80 $  4.67 $  4.55 
Market value per share $  6.90 $  6.30 $  6.60 $  5.25 $  3.95 
Earnings per share - basic & diluted $  0.13 $  0.24 $  0.11 $  0.16 $  0.11 
Period end common shares  3,249,156  3,249,156  3,249,156  3,249,156  3,261,156 
       
PERFORMANCE RATIOS      
Return on average assets  0.82% 1.62% 0.79% 1.14% 0.84%
Return on average equity  7.90% 15.14% 7.56% 10.66% 10.17%
Net interest margin - CSB  3.88% 4.01% 4.07% 4.12% 4.13%
Efficiency ratio  64.91% 59.52% 67.08% 57.12% 65.89%
Texas Ratio  4.44% 3.37% 3.60% 6.32% 7.32%
       
CAPITAL & LIQUIDITY      
Tier 1 Leverage - CSB  9.30% 9.53% 9.09% 9.04% 8.76%
Common Equity Tier 1 Capital - CSB  10.07% 9.95% 9.71% 10.01% 9.50%
Tier 1 Risk Based Capital - CSB  10.07% 9.95% 9.71% 10.01% 9.50%
Total Risk Based Capital - CSB  11.19% 11.06% 10.78% 11.12% 10.50%
Loan to deposit ratio  94.66% 101.27% 98.62% 96.23% 97.10%
       
ASSET QUALITY      
Gross loan charge-offs $  1 $  0 $  0 $  0 $  0 
Net loan charge-offs (recoveries) $  (2)$  (495)$  (4)$  (170)$  (5)
Allowance for loan and lease losses to total loans  1.17% 1.17% 1.12% 1.16% 1.07%
Nonperforming loans to total loans  0.10% 0.00% 0.00% 0.00% 0.00%
Nonperforming assets to total assets  0.44% 0.38% 0.39% 0.68% 0.69%