CLARKSTON, Mich., Jan. 30, 2018 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) - (News), the holding company for Clarkston State Bank (“Bank”), today reported a net loss of ($1,367,000) or ($0.42) per share for the three months ended December 31, 2017, compared to net income of $512,000 or $0.16 per share for the three months ended December 31, 2016. For the twelve months ended December 31, 2017, the corporation reported net income of $174,000 or $0.06 per share compared to net income of $1,297,000 or $0.40 per share for the same period in 2016. The net loss is directly attributable to the Tax Cut and Jobs Act (H.R. 1) signed into law on December 22, 2017. The change in tax law resulted in a charge to federal income tax expense of $1.69 million for 2017.
J. Grant Smith, CEO, said, "Despite the year end charge to reduce the Corporation’s deferred tax asset per the change in tax law, the Corporation was on pace for another outstanding year. Pre-tax income grew by 29% year over year. While at the same time, balance sheet fundamentals continue to be outstanding. We expect our strong performance will continue throughout 2018. Excellent asset quality, combined with good expense control and very good core deposits will help to further enhance the Corporation’s performance going forward.”
Operating Results
The Corporation’s net interest income increased slightly to $1,820,000 for the quarter ended December 31, 2017 compared to $1,695,000 for the same period ended December 31, 2016. This represents an increase of $125,000 or 7.37% quarter over quarter. This increase is due to the growth in our loan portfolio. The net interest margin of the Bank remains above its peer group average ending at 3.85% for the quarter ended December 31, 2017.
Noninterest income decreased during the fourth quarter of 2017 when compared to the fourth quarter of 2016. The Corporation posted $59,000 for the quarter compared to $243,000 for the quarter ended December 31, 2016, a decrease of $184,000 or 75.72%. The decrease is mostly attributable to gains realized on the sale of SBA loans in 2016. Noninterest expense increased, ending the fourth quarter at $1,324,000 compared to $1,107,000 for the same period ended December 31, 2016, an increase of $217,000 or 19.60%. However, year-to-date the Corporation’s noninterest expense for 2017 was 1.17% or $58,000 higher at $5,002,000 compared to $4,944,000 in 2016.
Balance Sheet
Total assets at December 31, 2017 were $193,311,000 compared to $179,007,000 at December 31, 2016, an increase of $14,304,000 or 7.99%. The increase in assets is due to an increase of loans.
Gross loans increased $20,699,000 from $151,887,000 at December 31, 2016, to $172,586,000 at December 31, 2017, an increase of 13.63%. Total deposits increased $13,738,000 or 8.70%, ending at $171,580,000 for December 31, 2017, up from $157,842,000 for December 31, 2016. Total stockholders’ equity increased slightly from $15,189,000 at December 31, 2016 to $15,416,000 at December 31, 2017, an increase of $227,000 or 1.49%.
Asset Quality
There was one non-performing loan at December 31, 2017 for $158,500 compared to none for the same period in 2016. The allowance for loan loss slightly increased at 1.19% of total loans as of December 31, 2017 compared to 1.16% 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) | |||||||||
| 12/31/2017 | 12/31/2016 | ||||||||
| Assets | |||||||||
| Cash and due from banks | $ | 7,718 | $ | 9,004 | |||||
| Securities – Available for sale | 6,889 | 8,481 | |||||||
| Federal Home Loan Bank stock, at cost | 232 | 232 | |||||||
| Loans | 172,586 | 151,887 | |||||||
| Allowance for possible loan losses | (2,052 | ) | (1,767 | ) | |||||
| Net loans | 170,533 | 150,119 | |||||||
| Banking premises and equipment | 3,611 | 3,682 | |||||||
| Deferred tax asset | 2,939 | 5,595 | |||||||
| Other real estate owned | 721 | 1,221 | |||||||
| Accrued interest receivable and other assets | 667 | 674 | |||||||
| Total assets | $ | 193,311 | $ | 179,007 | |||||
| Liabilities and Stockholders' Equity | |||||||||
| Liabilities | |||||||||
| Deposits | |||||||||
| Noninterest-bearing demand deposits | 77,065 | 80,217 | |||||||
| Interest-bearing | 94,515 | 77,625 | |||||||
| Total deposits | 171,580 | 157,842 | |||||||
| Other Liabilities | |||||||||
| Federal Home Loan Bank advances | 0 | 0 | |||||||
| Other borrowings | 5,711 | 5,416 | |||||||
| Accrued interest payable and other liabilities | 604 | 560 | |||||||
| Total liabilities | 177,895 | 163,818 | |||||||
| Stockholders' Equity | |||||||||
| Common stock | 11,923 | 11,923 | |||||||
| Paid-in capital | 11,804 | 11,804 | |||||||
| Restricted stock - Unearned compensation | 0 | 0 | |||||||
| Accumulated deficit | (8,205 | ) | (8,396 | ) | |||||
| Accumulated other comprehensive income (loss) | (105 | ) | (141 | ) | |||||
| Total stockholders' equity | 15,416 | 15,189 | |||||||
| Total liabilities and stockholders' equity | $ | 193,311 | $ | 179,007 | |||||
| CLARKSTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||||||||||||||||||||
| (Dollars, in thousands) | |||||||||||||||||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| 12/31/2017 | 12/31/2016 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 2,008 | $ | 1,768 | $ | 7,516 | $ | 6,640 | |||||||||||||||||||||
| Interest on investment securities: | 34 | 40 | 153 | 189 | |||||||||||||||||||||||||
| Interest on federal funds sold | 27 | 6 | 58 | 46 | |||||||||||||||||||||||||
| Total interest income | 2,070 | 1,814 | 7,727 | 6,875 | |||||||||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||||||||
| Deposits | 176 | 54 | 523 | 183 | |||||||||||||||||||||||||
| Borrowings | 74 | 65 | 256 | 261 | |||||||||||||||||||||||||
| Total interest expense | 250 | 119 | 779 | 444 | |||||||||||||||||||||||||
| Net Interest Income | 1,820 | 1,695 | 6,948 | 6,431 | |||||||||||||||||||||||||
| Provision for Possible Loan Losses | 45 | 20 | (220 | ) | 50 | ||||||||||||||||||||||||
| Net Interest Income after provision for possible loan losses | 1,775 | 1,675 | 7,168 | 6,381 | |||||||||||||||||||||||||
| Noninterest Income | |||||||||||||||||||||||||||||
| Service fees on loan and deposit accounts | 49 | 124 | 465 | 544 | |||||||||||||||||||||||||
| Gain on sale of securities | 0 | 12 | 0 | 12 | |||||||||||||||||||||||||
| Loss on sale of other real estate owned | 0 | 0 | 4 | 204 | |||||||||||||||||||||||||
| Other | 11 | 108 | 238 | 29 | |||||||||||||||||||||||||
| Total noninterest income | 59 | 243 | 706 | 789 | |||||||||||||||||||||||||
| Noninterest Expense | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 808 | 630 | 3,011 | 2,906 | |||||||||||||||||||||||||
| Occupancy | 90 | 124 | 460 | 504 | |||||||||||||||||||||||||
| Advertising | 71 | (5 | ) | 182 | 101 | ||||||||||||||||||||||||
| Outside processing | 127 | 117 | 494 | 470 | |||||||||||||||||||||||||
| Professional fees | 7 | 54 | 136 | 191 | |||||||||||||||||||||||||
| FDIC insurance | 23 | 21 | 83 | 136 | |||||||||||||||||||||||||
| Defaulted loan expense | 14 | 29 | 30 | 0 | |||||||||||||||||||||||||
| Other | 184 | 138 | 606 | 636 | |||||||||||||||||||||||||
| Total noninterest expense | 1,324 | 1,107 | 5,002 | 4,944 | |||||||||||||||||||||||||
| Income/(Loss) before income taxes | 510 | 811 | 2,871 | 2,226 | |||||||||||||||||||||||||
| Income Tax Expense (1) | 1,877 | 299 | 2,698 | 929 | |||||||||||||||||||||||||
| Net Income/(Loss) | ($ | 1,367 | ) | $ | 512 | $ | 174 | $ | 1,297 | ||||||||||||||||||||
| (1) Income tax expense includes $1,689 in deferred income tax expense as a result of the Tax Cuts and Jobs Act (H.R. 1) | |||||||||||||||||||||||||||||
| CLARKSTON FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||
| (Dollars in thousands, except share and per share data) | Quarter Ended | |||||||||||||||
| 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | ||||||||||||
| MARKET DATA | ||||||||||||||||
| Book value per share | $ | 4.74 | $ | 5.17 | $ | 5.05 | $ | 4.80 | $ | 4.67 | ||||||
| Market value per share | $ | 8.10 | $ | 6.90 | $ | 6.30 | $ | 6.60 | $ | 5.25 | ||||||
| Earnings per share - basic & diluted | $ | (0.42 | ) | $ | 0.13 | $ | 0.24 | $ | 0.11 | $ | 0.16 | |||||
| Period end common shares | 3,249,156 | 3,249,156 | 3,249,156 | 3,249,156 | 3,249,156 | |||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||
| Return on average assets pre-Tax Cuts and Jobs Act | 1.10 | % | 0.82 | % | 1.62 | % | 0.79 | % | 1.14 | % | ||||||
| Return on average assets with Tax Cuts and Jobs Act | -2.71 | % | 0.82 | % | 1.62 | % | 0.79 | % | 1.14 | % | ||||||
| Return on average equity pre-Tax Cuts and Jobs Act | 10.45 | % | 7.90 | % | 15.14 | % | 7.56 | % | 10.66 | % | ||||||
| Return on average equity with Tax Cuts and Jobs Act | -26.30 | % | 7.90 | % | 15.14 | % | 7.56 | % | 10.66 | % | ||||||
| Net interest margin - CSB | 3.85 | % | 3.88 | % | 4.01 | % | 4.07 | % | 4.12 | % | ||||||
| Efficiency ratio | 70.48 | % | 64.91 | % | 59.52 | % | 67.08 | % | 57.12 | % | ||||||
| Texas Ratio | 4.35 | % | 4.44 | % | 3.37 | % | 3.60 | % | 6.32 | % | ||||||
| CAPITAL & LIQUIDITY | ||||||||||||||||
| Tier 1 Leverage - CSB | 9.08 | % | 9.30 | % | 9.53 | % | 9.09 | % | 9.04 | % | ||||||
| Common Equity Tier 1 Capital - CSB | 10.12 | % | 10.07 | % | 9.95 | % | 9.71 | % | 10.01 | % | ||||||
| Tier 1 Risk Based Capital - CSB | 10.12 | % | 10.07 | % | 9.95 | % | 9.71 | % | 10.01 | % | ||||||
| Total Risk Based Capital - CSB | 11.26 | % | 11.19 | % | 11.06 | % | 10.78 | % | 11.12 | % | ||||||
| Loan to deposit ratio | 100.59 | % | 94.66 | % | 101.27 | % | 98.62 | % | 96.23 | % | ||||||
| ASSET QUALITY | ||||||||||||||||
| Gross loan charge-offs | $ | 0 | $ | 1 | $ | - | $ | - | $ | 0 | ||||||
| Net loan charge-offs (recoveries) | $ | (3 | ) | $ | (2 | ) | $ | (495 | ) | $ | (4 | ) | $ | (170 | ) | |
| Allowance for loan and lease losses to total loans | 1.19 | % | 1.17 | % | 1.17 | % | 1.12 | % | 1.16 | % | ||||||
| Nonperforming loans to total loans | 0.09 | % | 0.10 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
| Nonperforming assets to total assets | 0.45 | % | 0.44 | % | 0.38 | % | 0.39 | % | 0.68 | % | ||||||