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Clarkston Financial Corporation Reports 2017 Q2 Results

/EIN News/ -- CLARKSTON, Mich., July 27, 2017 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) - (News), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $765,000 or $0.24 per share for the three months ended June 30, 2017, compared to net income of $315,000 or $0.10 per share for the three months ended June 30, 2016. For the six months ended June 30, 2017, the corporation reported net income of $1,134,000 or $0.35 per share compared to net income of $510,000 or $0.18 per share for the same period in 2016.

J. Grant Smith, CEO, said, "Our board of directors is very proud of our team and our earnings performance. The Bank continues to exceed its performance targets. We have a very specific strategic plan in place and we are executing the plan with precision. The quarter’s performance was aided by a recovery on a previously charged off loan, however, when normalizing the earnings performance the Bank still posted a return on assets of 1.22%. Our team is focused on procuring additional loan opportunities, maintaining expense control and garnering new deposits to further bolster an outstanding deposit mix. The effort and discipline of our team will continue to provide the fundamentals to further enhance our financial performance as we traverse through the remainder of the year.”  

Operating Results

The Corporation’s net interest income increased significantly to $2,109,000 for the quarter ended June 30, 2017 compared to $1,620,000 for the same period ended June 30, 2016.  This represents an increase of $489,000 or 30.19% 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 well above its peer group average ending at 4.01% for the quarter ended June 30, 2017. 

Noninterest income increased during the second quarter of 2017 when compared to the second quarter 2016.  The Corporation posted $290,000 for the quarter compared to $159,000 for the quarter ended June 30, 2016, an increase of $131,000 or 82.39%.  The increase is mostly attributable to gains realized on the sale of SBA loans. In addition, noninterest income was up significantly quarter over quarter due to a large recovery on a previously charged off loan in the amount of $494,000 of which $94,000 was retained in the allowance for loan loss. Noninterest expense decreased, ending the second quarter at $1,217,000 compared to $1,275,000 for the same period ended June 30, 2016, a decrease of $58,000 or 4.55%. 

Balance Sheet

Total assets at June 30, 2017 were $191,533,000 compared to $176,881,000 at June 30, 2016, an increase of $14,652,000 or 8.28%.  The increase in assets is due to increases in loans.

Gross loans increased $28,391,000 from $139,425,000 at June 30, 2016, to $167,816,000 at June 30, 2017, an increase of 20.36%.  Total deposits increased $9,240,000 or 5.91%, ending at $165,707,000 for June 30, 2017, up from $156,467,000 for June 30, 2016.  Total stockholders’ equity increased from $14,465,000 at June 30, 2016 to $16,412,000 at June 30, 2017, an increase of $1,947,000 or 13.46%. 

Asset Quality

There were no non-performing loans at June 30, 2017 as well as for the same period 2016.  The allowance for loan loss increased to 1.17% of total loans as of June 30, 2017 compared to 1.12% 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.


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
             
(Dollars, in thousands)            
    (unaudited)       (unaudited)
    6/30/2017   12/31/2016   6/30/2016
Assets            
             
Cash and due from banks   $ 7,653     $ 9,004     $ 17,191  
Securities – Available for sale     7,795       8,481       9,921  
Federal Home Loan Bank stock, at cost     232       232       232  
             
Loans     167,816       151,887       139,425  
Allowance for possible loan losses     (1,957 )     (1,767 )     (1,558 )
Net loans     165,859       150,119       137,867  
             
Banking premises and equipment     3,645       3,682       3,759  
Deferred tax asset     4,976       5,595       5,989  
Other real estate owned     721       1,221       1,221  
Accrued interest receivable and other assets     653       674       702  
Total assets   $   191,533     $   179,007     $   176,881  
             
Liabilities and Stockholders' Equity            
Liabilities            
Deposits            
Noninterest-bearing demand deposits     76,165       80,217       84,356  
Interest-bearing     89,542       77,625       72,110  
Total deposits     165,707       157,842       156,467  
             
Other Liabilities            
Other borrowings     9,014       5,416       5,519  
Accrued interest payable and other liabilities     400       560       431  
Total liabilities     175,121       163,818       162,416  
             
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       (40 )
Accumulated deficit     (7,262 )     (8,396 )     (9,279 )
Accumulated other comprehensive income (loss)     (52 )     (141 )     12  
             
Total stockholders' equity     16,412       15,189       14,465  
             
Total liabilities and stockholders' equity   $   191,533     $   179,007     $   176,881  


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
               
(Dollars, in thousands)              
  (unaudited)   (unaudited)
  Three Months Ended   Six Months Ended
  6/30/2017   6/30/2016   6/30/2017   6/30/2016
Interest Income              
Interest and fees on loans $ 1,891     $ 1,656     $ 3,643     $ 3,258  
Interest on investment securities:   41       48       84       105  
Interest on federal funds sold   7       21       13       29  
Total interest income   1,939       1,725       3,740       3,391  
               
Interest Expense              
Deposits   114       42       187       87  
Borrowings   71       63       133       133  
Total interest expense   185       105       320       221  
               
Net Interest Income   1,754       1,620       3,420       3,171  
               
Provision for Possible Loan Losses   (355 )     0       (310 )     0  
               
Net Interest Income after provision for possible loan losses              
  2,109     1,620       3,730     3,171  
               
Noninterest Income              
Service fees on loan and deposit accounts   118       129       240       244  
Gain on sale of securities   0       0       -       0  
Loss on sale of other real estate owned   0       (14 )     4       (14 )
Other   172       44       217       67  
Total noninterest income   290       159       460       298  
               
Noninterest Expense              
Salaries and employee benefits   715       727       1,462       1,574  
Occupancy   121       123       243       250  
Advertising   35       35       70       70  
Outside processing   122       118       241       240  
Professional fees   36       54       79       98  
FDIC insurance   24       27       47       53  
Defaulted loan expense   2       69       11       103  
Other   161       122       295       255  
Total noninterest expense   1,217       1,275       2,449       2,643  
               
Income/(Loss) before income taxes   1,182       504       1,742       826  
               
Income Tax Expense   418       189       608       316  
               
Net Income/(Loss) $ 765     $ 315     $ 1,134     $ 510  


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
             
(Dollars in thousands, except share and per share data)   Quarter Ended
             
    06/30/17 03/31/17 12/31/16 09/30/16 06/30/16
MARKET DATA            
Book value per share   $ 5.05   $ 4.80   $ 4.67   $ 4.55   $ 4.44  
Market value per share   $ 6.30   $ 6.60   $ 5.25   $ 3.95   $ 3.85  
Earnings per share - basic & diluted   $ 0.24   $ 0.11   $ 0.16   $ 0.11   $ 0.11  
Period end common shares     3,249,156     3,249,156     3,249,156     3,261,156     3,261,156  
             
PERFORMANCE RATIOS            
Return on average assets     1.62 %   0.79 %   1.14 %   0.84 %   0.71 %
Return on average equity     15.14 %   7.56 %   10.66 %   10.17 %   8.88 %
Net interest margin - CSB     4.01 %   4.07 %   4.12 %   4.13 %   4.15 %
Efficiency ratio     59.52 %   67.08 %   57.12 %   65.89 %   71.65 %
Texas Ratio     3.37 %   3.60 %   6.32 %   7.32 %   7.57 %
             
CAPITAL & LIQUIDITY            
Tier 1 Leverage - CSB     9.53 %   9.09 %   9.04 %   8.76 %   8.38 %
Common Equity Tier 1 Capital - CSB     9.95 %   9.71 %   10.01 %   9.50 %   9.67 %
Tier 1 Risk Based Capital - CSB     9.95 %   9.71 %   10.01 %   9.50 %   9.67 %
Total Risk Based Capital - CSB     11.06 %   10.78 %   11.12 %   10.50 %   10.70 %
Loan to deposit ratio     101.27 %   98.62 %   96.23 %   97.10 %   89.11 %
             
ASSET QUALITY            
Gross loan charge-offs   $ 0   $ 0   $ 0   $ 0   $ 0  
Net loan charge-offs (recoveries)   $ (495 ) $ (4 ) $ (170 ) $ (5 ) $ (14 )
Allowance for loan and lease losses to total loans     1.17 %   1.12 %   1.16 %   1.07 %   1.12 %
Nonperforming loans to total loans     0.00 %   0.00 %   0.00 %   0.00 %   0.00 %
Nonperforming assets to total assets     0.38 %   0.39 %   0.68 %   0.69 %   0.69 %


CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
           
(Dollars, in thousands) (unaudited)       (unaudited)
CATEGORY 6/30/2017   12/31/2016   6/30/2016
           
Commercial Loans $ 25,330     $ 18,781     $ 18,222  
Real Estate Mortgage Loans:          
Commercial   120,302       118,838       109,408  
1-4 Residential   2,976       3,036       3,810  
Construction and other   1,581       2,468       1,650  
Total mortgage loans on real estate   124,859       124,341       114,868  
Consumer Loans   17,626       8,765       6,335  
Total Loans   167,816       151,887       139,425  
Less:  Allowance for loan losses   (1,957 )     (1,767 )     (1,558 )
Net Loans $ 165,859     $ 150,119     $ 137,867  
           
           
  (unaudited)   (unaudited)   (unaudited)
ASSET QUALITY 6/30/2017   12/31/2016   6/30/2016
           
Total nonaccrual loans $ 0     $ 0     $ 0  
Total loans past due 90 days or more and still accruing   0       0       0  
Total nonperforming loans   0       0       0  
Other real estate owned   721       1,221       1,221  
Total nonperforming assets $ 721     $ 1,221     $ 1,221  


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

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