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Clarkston Financial Corporation Reports 2017 Q4 Results

CLARKSTON, Mich., Jan. 30, 2018 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) - (News), the holding company for Clarkston State Bank (“Bank”), today reported a net loss of ($1,367,000) or ($0.42) per share for the three months ended December 31, 2017, compared to net income of $512,000 or $0.16 per share for the three months ended December 31, 2016. For the twelve months ended December 31, 2017, the corporation reported net income of $174,000 or $0.06 per share compared to net income of $1,297,000 or $0.40 per share for the same period in 2016. The net loss is directly attributable to the Tax Cut and Jobs Act (H.R. 1) signed into law on December 22, 2017. The change in tax law resulted in a charge to federal income tax expense of $1.69 million for 2017.   

J. Grant Smith, CEO, said, "Despite the year end charge to reduce the Corporation’s deferred tax asset per the change in tax law, the Corporation was on pace for another outstanding year. Pre-tax income grew by 29% year over year. While at the same time, balance sheet fundamentals continue to be outstanding. We expect our strong performance will continue throughout 2018. Excellent asset quality, combined with good expense control and very good core deposits will help to further enhance the Corporation’s performance going forward.”  

Operating Results

The Corporation’s net interest income increased slightly to $1,820,000 for the quarter ended December 31, 2017 compared to $1,695,000 for the same period ended December 31, 2016.  This represents an increase of $125,000 or 7.37% quarter over quarter.  This increase is due to the growth in our loan portfolio. The net interest margin of the Bank remains above its peer group average ending at 3.85% for the quarter ended December 31, 2017.   

Noninterest income decreased during the fourth quarter of 2017 when compared to the fourth quarter of 2016.  The Corporation posted $59,000 for the quarter compared to $243,000 for the quarter ended December 31, 2016, a decrease of $184,000 or 75.72%.  The decrease is mostly attributable to gains realized on the sale of SBA loans in 2016. Noninterest expense increased, ending the fourth quarter at $1,324,000 compared to $1,107,000 for the same period ended December 31, 2016, an increase of $217,000 or 19.60%.  However, year-to-date the Corporation’s noninterest expense for 2017 was 1.17% or $58,000 higher at $5,002,000 compared to $4,944,000 in 2016.

Balance Sheet

Total assets at December 31, 2017 were $193,311,000 compared to $179,007,000 at December 31, 2016, an increase of $14,304,000 or 7.99%.  The increase in assets is due to an increase of loans.

Gross loans increased $20,699,000 from $151,887,000 at December 31, 2016, to $172,586,000 at December 31, 2017, an increase of 13.63%.  Total deposits increased $13,738,000 or 8.70%, ending at $171,580,000 for December 31, 2017, up from $157,842,000 for December 31, 2016.  Total stockholders’ equity increased slightly from $15,189,000 at December 31, 2016 to $15,416,000 at December 31, 2017, an increase of $227,000 or 1.49%. 

Asset Quality

There was one non-performing loan at December 31, 2017 for $158,500 compared to none for the same period in 2016.  The allowance for loan loss slightly increased at 1.19% of total loans as of December 31, 2017 compared to 1.16% 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)      
    12/31/2017   12/31/2016  
              Assets          
           
Cash and due from banks   $   7,718     $   9,004    
Securities – Available for sale     6,889       8,481    
Federal Home Loan Bank stock, at cost     232       232    
           
Loans     172,586       151,887    
Allowance for possible loan losses     (2,052 )     (1,767 )  
Net loans     170,533       150,119    
           
Banking premises and equipment     3,611       3,682    
Deferred tax asset     2,939       5,595    
Other real estate owned     721       1,221    
Accrued interest receivable and other assets     667       674    
Total assets   $   193,311     $   179,007    
           
               Liabilities and Stockholders' Equity          
Liabilities          
Deposits          
Noninterest-bearing demand deposits     77,065       80,217    
Interest-bearing     94,515       77,625    
Total deposits     171,580       157,842    
           
Other Liabilities          
Federal Home Loan Bank advances     0       0    
Other borrowings     5,711       5,416    
Accrued interest payable and other liabilities     604       560    
Total liabilities     177,895       163,818    
           
Stockholders' Equity          
Common stock     11,923       11,923    
Paid-in capital     11,804       11,804    
Restricted stock - Unearned compensation     0       0    
Accumulated deficit     (8,205 )     (8,396 )  
Accumulated other comprehensive income (loss)     (105 )     (141 )  
           
Total stockholders' equity     15,416       15,189    
           
Total liabilities and stockholders' equity   $   193,311     $   179,007    

/EIN News/ --

CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
               
(Dollars, in thousands)              
  (unaudited)
  (unaudited)
  Three Months Ended   Twelve Months Ended
  12/31/2017   12/31/2016   12/31/2017   12/31/2016
Interest Income              
Interest and fees on loans $ 2,008     $ 1,768     $ 7,516     $ 6,640
Interest on investment securities:   34       40       153       189
Interest on federal funds sold   27       6       58       46
Total interest income   2,070       1,814       7,727       6,875
               
Interest Expense              
Deposits   176       54       523       183
Borrowings   74       65       256       261
Total interest expense   250       119       779       444
               
Net Interest Income   1,820       1,695       6,948       6,431
               
Provision for Possible Loan Losses     45         20         (220 )       50
               
               
Net Interest Income after provision for possible loan losses   1,775     1,675       7,168     6,381
               
Noninterest Income              
Service fees on loan and deposit accounts   49       124       465       544
Gain on sale of securities   0       12       0       12
Loss on sale of other real estate owned   0       0       4       204
Other   11       108       238       29
Total noninterest income   59       243       706       789
               
Noninterest Expense              
Salaries and employee benefits   808       630       3,011       2,906
Occupancy   90       124       460       504
Advertising   71       (5 )     182       101
Outside processing   127       117       494       470
Professional fees   7       54       136       191
FDIC insurance   23       21       83       136
Defaulted loan expense   14       29       30       0
Other   184       138       606       636
Total noninterest expense   1,324       1,107       5,002       4,944
               
Income/(Loss) before income taxes   510       811       2,871       2,226
               
Income Tax Expense (1)     1,877         299         2,698         929
               
Net Income/(Loss) ($ 1,367 )   $ 512     $ 174     $ 1,297
(1) Income tax expense includes $1,689 in deferred income tax expense as a result of the Tax Cuts and Jobs Act (H.R. 1)


 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
 
(Dollars in thousands, except share and per share data) Quarter Ended
 
  12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
MARKET DATA  
Book value per share $ 4.74   $ 5.17   $ 5.05   $ 4.80   $ 4.67  
Market value per share $ 8.10   $ 6.90   $ 6.30   $ 6.60   $ 5.25  
Earnings per share - basic & diluted $ (0.42 ) $ 0.13   $ 0.24   $ 0.11   $ 0.16  
Period end common shares   3,249,156     3,249,156     3,249,156     3,249,156     3,249,156  
 
PERFORMANCE RATIOS  
Return on average assets pre-Tax Cuts and Jobs Act   1.10 %   0.82 %   1.62 %   0.79 %   1.14 %
Return on average assets with Tax Cuts and Jobs Act   -2.71 %   0.82 %   1.62 %   0.79 %   1.14 %
Return on average equity pre-Tax Cuts and Jobs Act   10.45 %   7.90 %   15.14 %   7.56 %   10.66 %
Return on average equity with Tax Cuts and Jobs Act   -26.30 %   7.90 %   15.14 %   7.56 %   10.66 %
Net interest margin - CSB   3.85 %   3.88 %   4.01 %   4.07 %   4.12 %
Efficiency ratio   70.48 %   64.91 %   59.52 %   67.08 %   57.12 %
Texas Ratio   4.35 %   4.44 %   3.37 %   3.60 %   6.32 %
 
CAPITAL & LIQUIDITY  
Tier 1 Leverage - CSB   9.08 %   9.30 %   9.53 %   9.09 %   9.04 %
Common Equity Tier 1 Capital - CSB   10.12 %   10.07 %   9.95 %   9.71 %   10.01 %
Tier 1 Risk Based Capital - CSB   10.12 %   10.07 %   9.95 %   9.71 %   10.01 %
Total Risk Based Capital - CSB   11.26 %   11.19 %   11.06 %   10.78 %   11.12 %
Loan to deposit ratio   100.59 %   94.66 %   101.27 %   98.62 %   96.23 %
 
ASSET QUALITY  
Gross loan charge-offs $ 0   $ 1   $   -    $   -    $ 0  
Net loan charge-offs (recoveries) $ (3 ) $ (2 ) $ (495 ) $ (4 ) $ (170 )
Allowance for loan and lease losses to total loans   1.19 %   1.17 %   1.17 %   1.12 %   1.16 %
Nonperforming loans to total loans   0.09 %   0.10 %   0.00 %   0.00 %   0.00 %
Nonperforming assets to total assets   0.45 %   0.44 %   0.38 %   0.39 %   0.68 %
   

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