CLARKSTON, Mich., Feb. 13, 2019 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC - News), the holding company for Clarkston State Bank (“Bank”), today reported net income of $645,000 or $0.19 per share for the three months ended December 31, 2018, compared to net loss of ($1,367,000) or ($0.42) per share for the three months ended December 31, 2017. The net loss in the fourth quarter of 2017 was directly attributable to the change in tax law passed by Congress.

J. Grant Smith, CEO, said, "Another year of consistent financial performance. Our balance sheet fundamentals are very good, net interest margin has improved nicely and our hallmark of great expense control has resulted in another great year of performance. We strive to be consistent and perform above our peer group. Once again, we accomplished our goal during 2018. We are cautiously optimistic for 2019. We expect to continue with our growth trajectory while staying disciplined as we continue with our efforts to grow our regulatory capital. The Bank’s fundamentals remain very strong and we expect our very good operating performance to continue in 2019.

Operating Results

The Corporation’s net interest income before provision, increased to $1,928,000 for the quarter ended December 31, 2018, compared to $1,820,000 for the same period ended December 31, 2017.  This represents an increase of $108,000 or 5.93% quarter over quarter.  The net interest margin of the Bank increased to 3.96% as of December 31, 2018, compared to 3.85% for December 31, 2017. The Bank’s net interest spread has improved as interest rates have increased on both new loan originations and renewals.

Noninterest income increased during the fourth quarter of 2018 when compared to the fourth quarter of 2017. The Corporation posted $127,000 for the quarter compared to $59,000 for the quarter ended December 31, 2017, an increase of $68,000 or 115.25%.  The increase is mostly attributable to increases in deposit account fees. Noninterest expense decreased, ending the fourth quarter at $1,252,000 compared to $1,324,000 for the same period ended December 31, 2017, a decrease of $72,000 or 5.44%.

Balance Sheet

Total assets at December 31, 2018, were $211,630,000 compared to $193,311,000 at December 31, 2017, an increase of $18,319,000 or 9.48%.  The increase is mainly due to an increase in loans and deposits.

Gross loans increased $19,489,000 from $172,586,000 at December 31, 2017, to $192,075,000 at December 31, 2018, an increase of 11.29%.  Total deposits increased $6,554,000 or 3.82%, ending at $178,134,000 for December 31, 2018, up from $171,580,000 for December 31, 2017.  Total stockholders’ equity increased from $15,416,000 at December 31, 2017 to $17,786,000 at December 31, 2018, an increase of $2,370,000 or 15.37%.

Asset Quality

There were no non-performing loans at December 31, 2018. There remains one non-performing asset at $706,000 as of the fourth quarter of 2018. The allowance for loan loss slightly decreased to 1.07% of total loans as of December 31, 2018 compared to 1.19% for the same period 2017.  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)    
  (audited) (audited)
  12/31/2018 12/31/2017
Assets    
     
Cash and due from banks $7,422  $7,718 
Securities – Available for sale  6,440   6,889 
Federal Home Loan Bank stock, at cost  232   232 
     
Loans  192,075   172,586 
Allowance for possible loan losses  (2,064)   (2,052) 
Net loans  190,011   170,533 
     
Banking premises and equipment  3,581   3,611 
Deferred tax asset  2,352   2,939 
Other real estate owned  706   721 
Accrued interest receivable and other assets  886   667 
Total assets $211,630   $193,311  
     
Liabilities and Stockholders' Equity    
Liabilities    
Deposits    
Noninterest-bearing demand deposits  80,127   77,065 
Interest-bearing  98,007   94,515 
Total deposits  178,134   171,580 
     
Other Liabilities    
Federal Home Loan Bank advances  0   0 
Other borrowings  15,056   5,711 
Accrued interest payable and other liabilities  654   604 
Total liabilities  193,844   177,895 
     
Stockholders' Equity    
Common stock  11,923   11,923 
Paid-in capital  12,099   11,804 
Restricted stock - Unearned compensation  (197)   0 
Accumulated deficit  (5,860)   (8,205) 
Accumulated other comprehensive income (loss)  (179)   (105) 
     
Total stockholders' equity  17,786   15,416 
     
Total liabilities and stockholders' equity $211,630   $193,311  


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
        
(Dollars, in thousands)       
 (audited) (audited)
 Three Months Ended Twelve Months Ended
 12/31/2018 12/31/2017 12/31/2018 12/31/2017
Interest Income       
Interest and fees on loans$2,204 $2,008  $8,270  $7,516 
Interest on investment securities: 39  34   163   153 
Interest on federal funds sold 32  27   95   58 
Total interest income 2,274  2,070   8,528   7,727 
        
Interest Expense       
Deposits 287  176   949   523 
Borrowings 60  74   247   256 
Total interest expense 346  250   1,196   779 
        
Net Interest Income 1,928  1,820   7,332   6,948 
        
Provision for Possible Loan Losses 0  45   0   (220) 
        
Net Interest Income after provision for possible loan losses       
 1,928 1,775   7,332  7,168 
        
Noninterest Income       
Loan and deposit service fees 117  49   482   465 
Loss on sale of other real estate owned 0  0   0   4 
Other 11  11   209   238 
Total noninterest income 127  59   691   706 
        
Noninterest Expense       
Salaries and employee benefits 750  808   3,039   3,011 
Occupancy 124  90   492   460 
Advertising 42  71   176   182 
Outside processing 110  127   508   494 
Professional fees 53  7   210   136 
FDIC insurance 24  23   87   83 
Defaulted loan expense 6  14   (1)  30 
Other 144  184   560   606 
Total noninterest expense 1,252  1,324   5,071   5,002 
        
Income/(Loss) before income taxes 803  510   2,953   2,871 
        
Income Tax Expense   158    1,877     607     2,698 
        
Net Income/(Loss)$645  $(1,367) $2,345  $174 


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
       
(Dollars in thousands, except share and per share data) Quarter Ended
       
  12/31/1809/30/1806/30/1803/31/1812/31/17
MARKET DATA      
Book value per share $5.37 $5.15 $4.97 $4.78 $4.74 
Market value per share $7.20 $7.50 $8.01 $8.00 $8.10 
Earnings per share - basic & diluted $0.19 $0.18 $0.19 $0.15  ($0.42) 
Period end common shares  3,309,156  3,309,156  3,309,156  3,309,156  3,249,156 
       
PERFORMANCE RATIOS      
Return on average assets  1.22%  1.17%  1.23%  0.97%  1.10% 
Return on average equity  11.97%  11.51%  12.04%  9.75%  10.45% 
Net interest margin  3.96%  3.90%  3.81%  3.90%  3.85% 
Efficiency ratio  60.93%  62.02%  62.39%  67.79%  70.48% 
Texas ratio  3.07%  3.21%  3.32%  3.52%  4.35% 
       
CAPITAL & LIQUIDITY      
Tier 1 Leverage  10.05%  9.77%  9.68%  9.36%  9.08% 
Common Equity Tier 1 Capital  10.65%  10.63%  10.32%  10.19%  10.12% 
Tier 1 Risk Based Capital  10.65%  10.63%  10.32%  10.19%  10.12% 
Total Risk Based Capital  11.70%  11.73%  11.43%  11.33%  11.26% 
Loan to deposit ratio  107.83%  98.57%  100.76%  98.26%  100.59% 
       
ASSET QUALITY      
Gross loan charge-offs $0 $0 $0 $0 $0 
Net loan charge-offs (recoveries)  ($3)  ($3)  ($4)  ($2)  ($3) 
Allowance for loan and lease losses to total loans  1.07%  1.13%  1.13%  1.16%  1.19% 
Nonperforming loans to total loans  0.00%  0.00%  0.00%  0.00%  0.09% 
Nonperforming assets to total assets  0.34%  0.34%  0.35%  0.36%  0.45%