CLARKSTON, Mich., July 28, 2011 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net income of $151,000 or $0.02 per basic and diluted common share for the three months ended June 30, 2011, compared to a net loss of $348,000 or $(0.63) per share for the three months ended June 30, 2010. For the six months ended June 30, 2011, the corporation reported a net income of $113,000 or $0.01 per share compared to a net loss of $615,000 or $(0.55) per share for the same period in 2010.
J. Grant Smith, CEO, said, "We continue to work hard to improve our operating results as well as our asset quality. Although local economic conditions are showing signs of improvement, the market still remains a challenge. We have made great strides to improve our net interest margin, which is now at 4.68%. The core earnings of the Bank continue to improve as noted below; however, asset quality remains our number one focus as we work to resolve the remaining issues on our balance sheet."
Operating Results
The Corporation's net interest income was $1,141,000 for the quarter ended June 30, 2011 compared to $934,000 for the same period ended June 30, 2010, an increase of $207,000 or 22.16%. The net interest margin of the Bank continues to rise, ending at 4.68% for the quarter ended June 30, 2011, up from 3.91% for the quarter ended June 30, 2010. The rise in net interest margin is reflective of stronger core deposits, and more favorable deposit pricing.
Noninterest income remained relatively flat, with a modest increase due to higher service fees on loan and deposit accounts during the second quarter 2011. Noninterest expense continued to decline, ending the second quarter 2011 at $1,162,000 compared to $1,241,000 for the same period ended June 30, 2010. This represents a decline of $79,000 or 6.37%. This decrease is a direct result of lower costs related to defaulted loans. Also, the completion of the recapitalization has resulted in lower FDIC insurance premiums.
Balance Sheet
Total assets at June 30, 2011 were $111,365,000 compared to $106,287,000 at June 30, 2010, an increase of $5,078,000 or 4.78%. The increase in total assets represents the influx of cash related to the recapitalization completed by the Corporation.
Total loans increased $2,962,000 from $80,265,000 at June 30, 2010 to $83,227,000 at June 30, 2011, an increase of 3.69%. Total deposits had a modest decline of $463,000 or 0.46%, ending at $100,039,000 for June 30, 2011, down from $100,502,000 at June 30, 2010. Total stockholders' equity increased from ($2,016,000) at June 30, 2010 to $7,646,000 at June 30, 2011, an increase of $9,662,000 or 479.27%. This increase is due to the completion of the recapitalization at the Corporation.
Asset Quality
The Bank saw an increase in the level of non-performing loans during the second quarter 2011. Total non-performing loans have increased to $4,442,000 at June 30, 2011 compared to $3,926,000 from the same period 2010, an increase of $516,000, or 13.14%. The allowance for loan loss decreased to 2.58% of total loans as of June 30, 2011, compared to 3.56% for the same period 2010. The decrease was due to favorable trends in the loss history percentages utilized in the allowance for loan loss calculation.
Clarkston State Bank opened in January 1999 and operates four branches in Clarkston, Waterford, and Independence Township, Michigan.
The Clarkston Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8228
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 FINANCIAL HIGHLIGHTS | |||
| (Dollars in thousands, except share and per share data) | |||
| Quarter Ended | |||
| 6/30/2011 | 12/31/2010 | 6/30/2010 | |
| MARKET DATA | |||
| Book value per share | $0.24 | $(1.23) | ($0.91) |
| Market value per share | $0.50 | $0.50 | $0.80 |
| Earnings per share - basic & diluted | $0.02 | $0.06 | ($0.63) |
| Average basic shares outstanding | 30,142,227 | 2,225,706 | 2,225,706 |
| Average diluted shares outstanding | 30,142,227 | 2,225,706 | 2,225,706 |
| Period end common shares | 31,950,625 | 2,225,706 | 2,225,706 |
| PERFORMANCE RATIOS | |||
| Return on average assets | 0.54% | 13.00% | (1.27)% |
| Return on average equity | 8.66% | (5.00)% | (80.77)% |
| Net interest margin - CSB | 4.68% | 4.21% | 3.91% |
| Efficiency ratio | 88.49% | 96.86% | 112.51% |
| Texas Ratio | 64.49% | 143.60% | 161.04% |
| CAPITAL & LIQUIDITY | |||
| Total Risk Based Capital - CSB | 12.03% | 3.91% | 3.70% |
| Tier 1 Risk Based Capital - CSB | 10.77% | 2.64% | 2.42% |
| Tier 1 Leverage - CSB | 9.18% | 2.26% | 2.06% |
| Loan to deposit ratio | 85.40% | 79.71% | 82.82% |
| ASSET QUALITY | |||
| Gross loan charge-offs | $382 | $559 | $962 |
| Net loan charge-offs | $358 | $509 | $910 |
| Allowance for loan and lease losses to total loans | 2.58% | 3.20% | 3.56% |
| Non-performing loans to total loans | 5.20% | 3.37% | 4.72% |
| Non-performing assets to total assets | 7.17% | 6.81% | 7.87% |
| CLARKSTON FINANCIAL CORPORATION | |||
| CONSOLIDATED BALANCE SHEET | |||
| (Dollars, in thousands) | |||
| (unaudited) | (unaudited) | ||
| 6/30/2011 | 12/31/2010 | 6/30/2010 | |
| Assets | |||
| Cash and due from banks | $8,637 | $7,125 | $6,984 |
| Securities – Available for sale | 10,341 | 8,748 | 8,788 |
| Federal Home Loan Bank stock, at cost | 556 | 662 | 760 |
| Loans | 85,430 | 80,160 | 83,231 |
| Allowance for possible loan losses | (2,203) | (2,566) | (2,966) |
| Net loans | 83,227 | 77,594 | 80,265 |
| Banking premises and equipment | 4,664 | 4,731 | 4,772 |
| Other real estate owned | 3,548 | 4,365 | 4,437 |
| Accrued interest receivable and other assets | 392 | 486 | 281 |
| Total assets | $111,365 | $103,711 | $106,287 |
| Liabilities and Stockholders' Equity (Deficit) | |||
| Liabilities | |||
| Deposits | |||
| Noninterest-bearing demand deposits | 22,762 | 20,051 | 19,905 |
| Interest-bearing | 77,277 | 80,515 | 80,597 |
| Total deposits | 100,039 | 100,566 | 100,502 |
| Other Liabilities | |||
| Federal Home Loan Bank advances | -- | -- | 2,000 |
| Other borrowings | 3,330 | 5,330 | 5,330 |
| Accrued interest payable and other liabilities | 350 | 551 | 471 |
| Total liabilities | 103,719 | 106,447 | 108,303 |
| Stockholders' Equity | |||
| Common stock | 11,807 | 6,630 | 6,645 |
| Paid-in capital | 11,690 | 6,630 | 6,645 |
| Restricted stock - Unearned compensation | (23) | (53) | (150) |
| Accumulated deficit | (15,924) | (16,037) | (15,322) |
| Accumulated other comprehensive income | 96 | 94 | 166 |
| Total stockholders' equity (deficit) | 7,646 | (2,736) | (2,016) |
| Total liabilities and stockholders' equity | $111,365 | $103,711 | $106,287 |
| CLARKSTON FINANCIAL CORPORATION | ||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||
| (Dollars, in thousands) | ||||
| (unaudited) | (unaudited) | |||
| Three Months Ended | Six Months Ended | |||
| 6/30/2011 | 6/30/2010 | 6/30/2011 | 6/30/2010 | |
| Interest Income | ||||
| Interest and fees on loans | $1,276 | $1,282 | $2,494 | $2,571 |
| Interest on investment securities: | 83 | 89 | 168 | 200 |
| Interest on federal funds sold | 10 | 2 | 13 | 3 |
| Total interest income | 1,369 | 1,373 | 2,675 | 2,774 |
| Interest Expense | ||||
| Deposits | 181 | 335 | 386 | 730 |
| Borrowings | 47 | 104 | 123 | 210 |
| Total interest expense | 228 | 439 | 509 | 940 |
| Net Interest Income | 1,141 | 934 | 2,166 | 1,834 |
| Provision for Loan Losses | -- | 210 | -- | 260 |
|
Net Interest Income after provision for possible loan losses |
1,141 | 724 | 2,166 | 1,574 |
| Noninterest Income | ||||
| Service fees on loan and deposit accounts | 159 | 148 | 308 | 307 |
| Gain on sale of securities | 55 | 17 | 55 | 50 |
| Loss on sale of other real estate owned | (79) | (67) | (51) | (87) |
| Other | 37 | 71 | 86 | 147 |
| Total noninterest income | 172 | 169 | 398 | 417 |
| Noninterest Expense | ||||
| Salaries and employee benefits | 509 | 480 | 1,023 | 987 |
| Occupancy | 149 | 132 | 305 | 272 |
| Advertising | 19 | 10 | 37 | 19 |
| Outside processing | 137 | 142 | 264 | 267 |
| Professional fees | 61 | 77 | 138 | 236 |
| FDIC insurance | 83 | 125 | 209 | 232 |
| Defaulted loan expense | 113 | 187 | 273 | 397 |
| Other | 91 | 88 | 202 | 197 |
| Total noninterest expense | 1,162 | 1,241 | 2,451 | 2,606 |
| Income/(Loss) before income taxes | 151 | (348) | 113 | (615) |
| Income Tax Benefit | -- | -- | -- | -- |
| Net Income/(Loss) | $151 | ($348) | $113 | ($615) |
| CLARKSTON FINANCIAL CORPORATION | |||
| LOAN INFORMATION | |||
| (unaudited) | (unaudited) | ||
| CATEGORY | 6/30/2011 | 12/31/2010 | 6/30/2010 |
| Commercial Loans | $9,263 | $8,565 | $7,976 |
| Real Estate Mortgage Loans: | |||
| Commercial | 62,650 | 57,752 | 59,447 |
| 1-4 Residential | 9,565 | 9,869 | 10,532 |
| Construction and other | 3,277 | 3,160 | 4,255 |
| Total mortgage loans on real estate | 75,492 | 70,781 | 74,234 |
| Consumer | 675 | 814 | 1,021 |
| Total Loans | 85,430 | 80,160 | 83,231 |
| Less: Allowance for loan losses | (2,203) | (2,566) | (2,966) |
| Net Loans | $83,227 | $77,594 | $80,265 |
| (unaudited) | (unaudited) | ||
| ASSET QUALITY | 6/30/2011 | 12/31/2010 | 6/30/2010 |
| Total nonaccrual loans | $2,776 | $2,700 | $3,926 |
| Total loans past due 90 days or more and still accruing | 1,666 | -- | -- |
| Total non-performing loans | 4,442 | 2,700 | $3,926 |
| Other real estate owned | 3,548 | 4,365 | 4,437 |
| Total non-performing assets | $7,990 | $7,065 | $8,363 |