CLARKSTON, Mich., Nov. 4, 2011 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net loss of $212,000 or $(0.03) per basic and diluted common share for the three months ended September 30, 2011, compared to a net loss of $752,000 or $(1.35) per share for the three months ended September 30, 2010. For the nine months ended September 30, 2011, the corporation reported a net loss of $99,000 or $0.00 per share compared to a net loss of $1,366,000 or $(0.82) per share for the same period in 2010.
J. Grant Smith, CEO, said, "We continue to diligently focus our efforts on resolving the remaining asset quality issues within our loan portfolio. We expect to experience some additional losses in order to finish the turnaround of the Corporation. We believe the Corporation's future looks bright once we can move past the asset quality issues. Our net interest income continues to improve while non interest expense continues to decline. Our team continues to make great progress and we are committed to completing the turnaround of the Corporation."
Operating Results
The Corporation's net interest income was $1,102,000 for the quarter ended September 30, 2011 compared to $972,000 for the same period ended September 30, 2010, an increase of $130,000 or 13.37%. The net interest margin of the Bank showed a slight decrease, ending at 4.44% for the quarter ended September 30, 2011, down from 4.68% for the quarter ended June 30, 2011. This decrease in net interest margin is representative of the reversal of accrued interest on loans placed onto nonaccrual during the quarter. There was a modest increase in the net interest margin from the quarter ended September 30, 2010, which was 4.37%.
Noninterest income decreased in the third quarter 2011 due to write downs of other real estate owned of $106,000, ending at $61,000 compared to $187,000 for the quarter ended September 30, 2010, a decrease of $126,000 or 67%. Noninterest expense continued to decline, ending the third quarter 2011 at $1,100,000 compared to $1,261,000 for the same period ended September 30, 2010. This represents a decline of $161,000 or 12.77%. 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 September 30, 2011 were $114,651,000 compared to $101,984,000 at September 30, 2010, an increase of $12,667,000 or 12.42%. At December 31, 2010 total assets were $103,711,000. The increase in total assets represents the influx of cash related to the recapitalization completed by the Corporation.
Total loans increased $7,924,000 from $81,864,000 at September 30, 2010 to $89,788,000 at September 30, 2011, an increase of 9.68%. Total deposits increased $6,628,000 or 6.84%, ending at $103,538,000 for September 30, 2011, up from $96,910,000 at September 30, 2010. Total stockholders' equity increased from $(2,753,000) at September 30, 2010 to $7,475,000 at September 30, 2011, an increase of $10,228,000 or 371.52%. This increase is due to the completion of the recapitalization at the Corporation.
Asset Quality
Total non-performing loans have increased to $4,852,000 at September 30, 2011 compared to $2,800,000 from the same period 2010, an increase of $2,052,000, or 73.29%. The significant increase is primarily attributable to a single credit. The allowance for loan loss decreased to 2.41% of total loans as of September 30, 2011, compared to 3.76% 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. Management continually monitors the allowance for loan loss to assure it is adequate for future losses.
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 | |||||||||
| CONSOLDATED BALANCE SHEET | |||||||||
| (Dollars, in thousands) | |||||||||
| (unaudited) | (unaudited) | ||||||||
| 9/30/2011 | 12/31/2010 | 9/30/2010 | |||||||
| Assets | |||||||||
| Cash and cash equivalents: | |||||||||
| Cash and due from banks | $ 7,418 | $ 7,125 | $ 4,521 | ||||||
| Federal funds sold | --- | --- | --- | ||||||
| Total cash and cash equivalents | 7,418 | 7,125 | 4,521 | ||||||
| Securities – Available for sale | 9,929 | 8,748 | 8,320 | ||||||
| Federal Home Loan Bank stock, at cost | 556 | 662 | 760 | ||||||
| Loans | 89,788 | 80,160 | 81,864 | ||||||
| Allowance for possible loan losses | (2,161) | (2,566) | (3,075) | ||||||
| Net loans | 87,627 | 77,594 | 78,789 | ||||||
| Banking premises and equipment | 4,628 | 4,731 | 4,731 | ||||||
| Other real estate owned | 4,122 | 4,365 | 4,520 | ||||||
| Accrued interest receivable and other assets | 371 | 486 | 343 | ||||||
| Total assets | $ 114,651 | $ 103,711 | $ 101,984 | ||||||
| Liabilities and Stockholders' Equity (Deficit) Liabilities | |||||||||
| Deposits | |||||||||
| Noninterest-bearing demand deposits | 24,175 | 20,051 | 20,745 | ||||||
| Interest-bearing | 79,363 | 80,515 | 76,165 | ||||||
| Total deposits | 103,538 | 100,566 | 96,910 | ||||||
| Other Liabilities | |||||||||
| Federal Home Loan Bank advances | --- | --- | 2,000 | ||||||
| Other borrowings | 3,330 | 5,330 | 5,330 | ||||||
| Accrued interest payable and other liabilities | 308 | 551 | 497 | ||||||
| Total liabilities | 107,176 | 106,447 | 104,737 | ||||||
| Stockholders' Equity | |||||||||
| Common stock | 11,807 | 6,630 | 6,645 | ||||||
| Paid-in capital | 11,688 | 6,630 | 6,645 | ||||||
| Restricted stock - Unearned compensation | (17) | (53) | (117) | ||||||
| Accumulated deficit | (16,136) | (16,037) | (16,073) | ||||||
| Accumulated other comprehensive income (loss) | 133 | 94 | 147 | ||||||
| Total stockholders' equity (deficit) | 7,475 | (2,736) | (2,753) | ||||||
| Total liabilities and stockholders' equity | $ 114,651 | $ 103,711 | $ 101,984 | ||||||
| CLARKSTON FINANCIAL CORPORATION | ||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||
| (Dollars, in thousands) | ||||||||||||
|
(unaudited) Three Months Ended |
(unaudited) Nine Months Ended |
|||||||||||
| 9/30/2011 | 9/30/2010 | 9/30/2011 | 9/30/2010 | |||||||||
| Interest Income | ||||||||||||
| Interest and fees on loans | $ 1,230 | $ 1,262 | $ 3,724 | $ 3,833 | ||||||||
| Interest on investment securities: | 81 | 78 | 247 | 278 | ||||||||
| Interest on federal funds sold | 3 | 3 | 17 | 6 | ||||||||
| Total interest income | 1,314 | 1,343 | 3,988 | 4,117 | ||||||||
| Interest Expense | ||||||||||||
| Deposits | 170 | 266 | 555 | 996 | ||||||||
| Borrowings | 42 | 105 | 165 | 315 | ||||||||
| Total interest expense | 212 | 371 | 720 | 1,311 | ||||||||
| Net Interest Income | 1,102 | 972 | 3,268 | 2,806 | ||||||||
| Provision for Possible Loan Losses | 275 | 650 | 275 | 910 | ||||||||
| Net Interest Income/(Expense) after provision for possible loan losses | 827 | 322 | 2,993 | 1,896 | ||||||||
| Noninterest Income | ||||||||||||
| Service fees on loan and deposit accounts | 143 | 150 | 451 | 457 | ||||||||
| Gain on sale of securities | --- | --- | 55 | 50 | ||||||||
| Loss on sale of other real estate owned | (106) | (28) | (157) | (115) | ||||||||
| Other | 24 | 66 | 110 | 213 | ||||||||
| Total noninterest income | 61 | 187 | 459 | 604 | ||||||||
| Noninterest Expense | ||||||||||||
| Salaries and employee benefits | 465 | 498 | 1,488 | 1,485 | ||||||||
| Occupancy | 144 | 141 | 450 | 413 | ||||||||
| Advertising | 17 | 14 | 54 | 33 | ||||||||
| Outside processing | 134 | 130 | 397 | 397 | ||||||||
| Professional fees | 50 | 98 | 188 | 334 | ||||||||
| FDIC insurance | 25 | 126 | 234 | 358 | ||||||||
| Defaulted loan expense | 173 | 171 | 446 | 568 | ||||||||
| Other | 92 | 82 | 294 | 279 | ||||||||
| Total noninterest expense | 1,100 | 1,261 | 3,551 | 3,867 | ||||||||
| Loss before income taxes | (212) | (752) | (99) | (1,366) | ||||||||
| Income Tax Benefit | --- | --- | --- | --- | ||||||||
| Net Loss | $ (212) | $ (752) | $ (99) | $ (1,366) | ||||||||
| CLARKSTON FINANCIAL CORPORATION | ||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||
| (Dollars in thousands, except share and per share data) | ||||||||||||||
| Quarter Ended | ||||||||||||||
| 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | ||||||||||
| MARKET DATA | ||||||||||||||
| Book value per share | $ 0.23 | $ 0.24 | $ 0.25 | $ (1.23) | $ (1.24) | |||||||||
| Market value per share | $ 0.90 | $ 0.50 | $ 0.90 | $ 0.50 | $ 0.63 | |||||||||
| Earnings per share - basic & diluted | $ (0.03) | $ 0.02 | $ (0.03) | $ 0.06 | $ (1.35) | |||||||||
| Average basic shares outstanding | 31,950,625 | 30,142,227 | 5,464,777 | 2,225,706 | 2,225,706 | |||||||||
| Average diluted shares outstanding | 31,950,625 | 30,142,227 | 5,464,777 | 2,225,706 | 2,225,706 | |||||||||
| Period end common shares | 31,950,625 | 31,950,625 | 26,737,435 | 2,225,706 | 2,225,706 | |||||||||
| PERFORMANCE RATIOS | ||||||||||||||
| Return on average assets | -0.76% | 0.54% | -0.14% | 0.13% | -2.85% | |||||||||
| Return on average equity | -11.04% | 8.66% | -13.58% | -5.00% | -146.81% | |||||||||
| Net interest margin - CSB | 4.44% | 4.68% | 4.60% | 4.21% | 4.37% | |||||||||
| Efficiency ratio | 94.56% | 88.49% | 103.03% | 96.86% | 108.76% | |||||||||
| Texas Ratio | 73.57% | 64.49% | 58.12% | 143.60% | 137.98% | |||||||||
| CAPITAL & LIQUIDITY | ||||||||||||||
| Total Risk Based Capital - CSB | 11.40% | 12.03% | 12.03% | 3.91% | 3.75% | |||||||||
| Tier 1 Risk Based Capital - CSB | 10.14% | 10.77% | 10.76% | 2.64% | 2.48% | |||||||||
| Tier 1 Leverage - CSB | 8.96% | 9.18% | 9.07% | 2.26% | 2.11% | |||||||||
| Loan to deposit ratio | 84.11% | 85.40% | 80.81% | 79.71% | 80.93% | |||||||||
| ASSET QUALITY | ||||||||||||||
| Gross loan charge-offs | $ 350 | $ 382 | $ 91 | $ 559 | $ 614 | |||||||||
| Net loan charge-offs | $ 317 | $ 358 | $ 5 | $ 509 | $ 542 | |||||||||
| Allowance for loan and lease losses to total loans | 2.41% | 2.58% | 3.16% | 3.20% | 3.76% | |||||||||
| Nonperforming loans to total loans | 5.40% | 5.20% | 4.09% | 3.37% | 3.42% | |||||||||
| Nonperforming assets to total assets | 7.83% | 7.17% | 6.43% | 6.81% | 7.18% | |||||||||
| CLARKSTON FINANCIAL CORPORATION | |||||
| LOAN INFORMATION | |||||
| CATEGORY |
(unaudited) 9/30/2011 |
12/31/2010 |
(unaudited) 9/30/2010 |
||
| Commercial Loans | $ 13,112 | $ 8,565 | $ 8,166 | ||
| Real Estate Mortgage Loans: | |||||
| Commercial | 63,298 | 57,752 | 58,831 | ||
| 1-4 Residential | 9,337 | 9,869 | 10,003 | ||
| Construction and other | 3,483 | 3,160 | 3,943 | ||
| Total mortgage loans on real estate | 76,118 | 70,781 | 72,777 | ||
| Consumer | 558 | 814 | 921 | ||
| Total Loans | 89,788 | 80,160 | 81,864 | ||
| Less: Allowance for loan losses | (2,161) | (2,566) | (3,075) | ||
| Net Loans | $ 87,627 | $ 77,594 | $ 78,789 | ||
| ASSET QUALITY |
(unaudited) 9/30/2011 |
12/31/2010 |
(unaudited) 9/30/2010 |
||
| Total nonaccrual loans | $ 4,852 | $ 2,700 | $ 2,800 | ||
| Total loans past due 90 days or more and still accruing | --- | --- | --- | ||
| Total nonperforming loans | 4,852 | 2,700 | 2,800 | ||
| Other real estate owned | 4,122 | 4,365 | 4,520 | ||
| Total nonperforming assets | $ 8,974 | $ 7,065 | $ 7,320 | ||