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Clarkston Financial Corporation Reports 2017 Q3 Results

/EIN News/ -- CLARKSTON, Mich., Oct. 30, 2017 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) - (News), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $407,000 or $0.13 per share for the three months ended September 30, 2017, compared to net income of $371,000 or $0.11 per share for the three months ended September 30, 2016. For the nine months ended September 30, 2017, the corporation reported net income of $1,541,000 or $0.47 per share compared to net income of $881,000 or $0.27 per share for the same period in 2016.

J. Grant Smith, CEO, said, "Our performance continues to outpace the prior quarter as well as year over year. Our team is working very diligently while maintaining discipline with both expense control and loan portfolio concentrations. We are continuing with our efforts to lower our concentration in investor real estate while at the same time improving our regulatory capital. Both our efficiency and noninterest expense ratios at the Bank are lower than our peers. We are continuing with our strategic plan which calls for the Bank to lower our investor real estate concentration levels, increase regulatory capital and outperform our peers when it comes to expense control. Our financial results for the past quarter reflects the efforts of our team and the precise execution of our strategy. We expect more of the same execution as we move throughout the fourth quarter.”  

Operating Results

The Corporation’s net interest income increased slightly to $1,769,000 for the quarter ended September 30, 2017 compared to $1,618,000 for the same period ended September 30, 2016.  This represents an increase of $151,000 or 9.33% 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 above its peer group average ending at 3.88% for the quarter ended September 30, 2017. 

Noninterest income decreased during the third quarter of 2017 when compared to the third quarter 2016.  The Corporation posted $125,000 for the quarter compared to $195,000 for the quarter ended September 30, 2016, a decrease of $70,000 or 35.90%.  The decrease is mostly attributable to gains realized in 2016 on the sale of SBA loans. Noninterest expense increased, ending the third quarter at $1,230,000 compared to $1,195,000 for the same period ended September 30, 2016, an increase of $35,000 or 3.00%.  However, year-to-date the Corporation’s noninterest expense for 2017 was 4.17% or $160,000 lower at $3,678,000 compared to $3,838,000 in 2016.

Balance Sheet

Total assets at September 30, 2017 were $203,763,000 compared to $176,814,000 at September 30, 2016, an increase of $26,949,000 or 15.24%.  The increase in assets is mainly due to an increase of loans.

Gross loans increased $22,622,000 from $149,027,000 at September 30, 2016, to $171,649,000 at September 30, 2017, an increase of 15.18%.  Total deposits increased $27,850,000 or 18.15%, ending at $181,323,000 for September 30, 2017, up from $153,473,000 for September 30, 2016.  Total stockholders’ equity increased from $14,852,000 at September 30, 2016 to $16,814,000 at September 30, 2017, an increase of $1,962,000 or 13.21%. 

Asset Quality

There was one non-performing loan at September 30, 2017 for $168,000 compared to none for the same period in 2016.  The allowance for loan loss increased to 1.17% of total loans as of September 30, 2017 compared to 1.07% 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)       (unaudited)
    9/30/2017   12/31/2016   9/30/2016
Assets            
             
Cash and due from banks   $   16,717     $   9,004     $   7,214  
Securities – Available for sale     7,337       8,481       10,558  
Federal Home Loan Bank stock, at cost     232       232       232  
             
Loans     171,649       151,887       149,027  
Allowance for possible loan losses     (2,004 )     (1,767 )     (1,593 )
Net loans     169,644       150,119       147,434  
             
Banking premises and equipment     3,620       3,682       3,726  
Deferred tax asset     4,783       5,595       5,782  
Other real estate owned     721       1,221       1,221  
Accrued interest receivable and other assets     708       674       647  
Total assets   $   203,763     $   179,007     $   176,814  
             
Liabilities and Stockholders' Equity            
Liabilities            
Deposits            
Noninterest-bearing demand deposits     79,981       80,217       83,635  
Interest-bearing     101,343       77,625       69,838  
Total deposits     181,323       157,842       153,473  
             
Other Liabilities            
Federal Home Loan Bank advances     0       0       2,500  
Other borrowings     5,263       5,416       5,468  
Accrued interest payable and other liabilities     364       560       521  
Total liabilities     186,949       163,818       161,962  
             
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       (37 )
Accumulated deficit     (6,855 )     (8,396 )     (8,908 )
Accumulated other comprehensive income  (loss)     (57 )     (141 )     26  
             
Total stockholders' equity     16,814       15,189       14,852  
             
Total liabilities and stockholders' equity   $   203,763     $   179,007     $   176,814  



CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
               
(Dollars, in thousands)              
  (unaudited)   (unaudited)
  Three Months Ended   Nine Months Ended
  9/30/2017   9/30/2016   9/30/2017   9/30/2016
Interest Income              
Interest and fees on loans $ 1,926   $ 1,667   $ 5,569     $ 4,925  
Interest on investment securities:   34     44     119       149  
Interest on federal funds sold   17     11     31       40  
Total interest income   1,978     1,722     5,718       5,114  
               
Interest Expense              
Deposits   160     42     347       129  
Borrowings   49     63     182       196  
Total interest expense   209     104     529       325  
               
Net Interest Income   1,769     1,618     5,190       4,789  
               
Provision for Possible Loan Losses    
  45
      30       (265 )       30  
               
Net Interest Income after provision for possible loan losses              
  1,724   1,588     5,455     4,759  
               
Noninterest Income              
Service fees on loans and deposits   115     124     355       368  
Gain on sale of securities   0     0     0       0  
Gain/(Loss) on sale of other real estate owned   0     0     4       (14 )
Other   11     71     227       139  
Total noninterest income   125     195     586       493  
               
Noninterest Expense              
Salaries and employee benefits   742     703     2,204       2,277  
Occupancy   127     122     370       372  
Advertising   40     35     110       105  
Outside processing   126     116     367       356  
Professional fees   50     41     129       139  
FDIC insurance   13     32     60       85  
Defaulted loan expense   5     22     16       125  
Other   127     124     422       379  
Total noninterest expense   1,230     1,195     3,678       3,838  
               
Income/(Loss) before income taxes   620     588     2,362       1,414  
               
Income Tax Expense     213       217       821         533  
               
Net Income/(Loss) $ 407   $ 371   $ 1,541     $ 881  


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
             
(Dollars in thousands, except share and per share data)   Quarter Ended
             
    09/30/17 06/30/17 03/31/17 12/31/16 09/30/16
MARKET DATA            
Book value per share   $   5.17   $   5.05   $   4.80   $   4.67   $   4.55  
Market value per share   $   6.90   $   6.30   $   6.60   $   5.25   $   3.95  
Earnings per share - basic & diluted   $   0.13   $   0.24   $   0.11   $   0.16   $   0.11  
Period end common shares     3,249,156     3,249,156     3,249,156     3,249,156     3,261,156  
             
PERFORMANCE RATIOS            
Return on average assets     0.82 %   1.62 %   0.79 %   1.14 %   0.84 %
Return on average equity     7.90 %   15.14 %   7.56 %   10.66 %   10.17 %
Net interest margin - CSB     3.88 %   4.01 %   4.07 %   4.12 %   4.13 %
Efficiency ratio     64.91 %   59.52 %   67.08 %   57.12 %   65.89 %
Texas Ratio     4.44 %   3.37 %   3.60 %   6.32 %   7.32 %
             
CAPITAL & LIQUIDITY            
Tier 1 Leverage - CSB     9.30 %   9.53 %   9.09 %   9.04 %   8.76 %
Common Equity Tier 1 Capital - CSB     10.07 %   9.95 %   9.71 %   10.01 %   9.50 %
Tier 1 Risk Based Capital - CSB     10.07 %   9.95 %   9.71 %   10.01 %   9.50 %
Total Risk Based Capital - CSB     11.19 %   11.06 %   10.78 %   11.12 %   10.50 %
Loan to deposit ratio     94.66 %   101.27 %   98.62 %   96.23 %   97.10 %
             
ASSET QUALITY            
Gross loan charge-offs   $   1   $   0   $   0   $   0   $   0  
Net loan charge-offs (recoveries)   $   (2 ) $   (495 ) $   (4 ) $   (170 ) $   (5 )
Allowance for loan and lease losses to total loans     1.17 %   1.17 %   1.12 %   1.16 %   1.07 %
Nonperforming loans to total loans     0.10 %   0.00 %   0.00 %   0.00 %   0.00 %
Nonperforming assets to total assets     0.44 %   0.38 %   0.39 %   0.68 %   0.69 %

 

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