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Clarkston Financial Corporation Reports 2015 Q2 Results

20:00 EDT 22 Jul 2015 | Globe Newswire

CLARKSTON, Mich., July 23, 2015 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $216,000 or $0.07 per share for the three months ended June 30, 2015, compared to net income of $232,000 or $.07 per share for the three months ended June 30, 2014. For the six months ended June 30, 2015, the corporation reported a net income of $467,000 or $0.15 per share compared to a net income of $512,000 or $0.16 per share for the same period in 2014. During the first quarter 2015 the Corporation returned to booking a provision for income taxes.  The pre-tax net income was $704,000 for the six months ended June 30, 2015.  This represents an increase of $192,000 or 37.50% in pre-tax income year over year.

J. Grant Smith, CEO, said, "During the second quarter we successfully completed the closures of two of our retail branch offices. In addition, we have further enhanced our retail electronic delivery channels to meet the needs of our customers and the changing demographic of potential new customers who demand electronic delivery channels. The cost savings associated with these two closures will enhance our profitability and will allow us to better serve our current and prospective customers. The fundamentals of the Bank remain strong; low loan delinquency, very little non-performing loans and an excellent net interest margin are the catalyst for continued positive operating performance.”    

Operating Results

The Corporation’s net interest income increased slightly to $1,353,000 for the quarter ended June 30, 2015 compared to $1,346,000 for the same period ended June 30, 2014.  The net interest margin of the Bank remains elevated compared to peers, but continues to have compression, ending at 4.42% for the quarter ended June 30, 2015, down from 4.93% for the quarter ended June 30, 2014.

Noninterest income increased during the second quarter 2015.  The quarter ended at $184,000 compared to $163,000 for the quarter ended June 30, 2014, an increase of $21,000 or 12.88%.  Noninterest expense decreased, ending the second quarter 2015 at $1,214,000 compared to $1,277,000 for the same period ended June 30, 2014, a decrease of $63,000 or 4.93%.     

Balance Sheet

Total assets at June 30, 2015 were $146,833,000 compared to $134,387,000 at June 30, 2014, an increase of $12,446,000 or 9.26%.  The increase in assets is largely due to increases in noninterest-bearing demand deposits.

Total loans increased $9,519,000 from $110,379,000 at June 30, 2014 to $119,898,000 at June 30, 2015, an increase of 8.62%.  Total deposits increased $10,847,000 or 9.31%, ending at $127,376,000 for June 30, 2015, up from $116,529,000 at June 30, 2014.  Total stockholders’ equity increased from $11,613,000 at June 30, 2014 to $13,338,000 at June 30, 2015, an increase of $1,725,000 or 14.85%. 

Asset Quality

Total non-performing loans increased to $200,000 at June 30, 2015 compared to $144,000 from the same period 2014, an increase of $56,000, or 38.89%.  The allowance for loan loss decreased to 1.49% of total loans as of June 30, 2015, compared to 1.67% for the same period 2014.  Management continually monitors the allowance for loan loss to determine its adequacy.

Clarkston State Bank opened in January 1999 and operates four 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)
  6/30/2015 12/31/2014 6/30/2014
Assets      
Cash and due from banks $  8,393  $  11,908  $  6,276 
Securities – Available for sale  7,084   5,581   6,191 
Federal Home Loan Bank stock, at cost  232   409   556 
       
Loans  119,898   114,680   110,379 
Allowance for possible loan losses  (1,785)  (1,873)  (1,842)
Net loans  118,113   112,807   108,537 
       
Banking premises and equipment  4,425   4,809   4,834 
Deferred tax asset  6,572   6,793   6,077 
Other real estate owned  1,396   1,396   1,396 
Accrued interest receivable and other assets  618   676   520 
Total assets $  146,833   $  144,379   $  134,387  
       
Liabilities and Stockholders' Equity      
Liabilities      
Deposits      
Noninterest-bearing demand deposits  53,121   52,919   44,841 
Interest-bearing  74,255   72,449   71,688 
Total deposits  127,376   125,368   116,529 
       
Other Liabilities      
Other borrowings  5,724   5,625   5,300 
Accrued interest payable and other liabilities  395   497   945 
Total liabilities  133,495   131,490   122,774 
       
Stockholders' Equity      
Common stock  11,945   11,917   11,917 
Paid-in capital  11,826   11,798   11,798 
Restricted stock - Unearned compensation  (51)  (24)  (60)
Accumulated deficit  (10,351)  (10,819)  (12,043)
Accumulated other comprehensive (loss) income  (31)  17   1 
Total stockholders' equity  13,338   12,889   11,613 
Total liabilities and stockholders' equity $  146,833   $  144,379   $  134,387  


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
        
 (unaudited) (unaudited)
(Dollars, in thousands)Three Months Ended Six Months Ended
 6/30/2015 6/30/2014 6/30/2015 6/30/2014
Interest Income       
Interest and fees on loans$  1,445  $  1,445  $  2,878  $  2,870 
Interest on investment securities: 32   33   69   75 
Interest on federal funds sold 5   2   9   3 
Total interest income 1,482   1,480   2,956   2,948 
        
Interest Expense       
Deposits 56   51   108   105 
Borrowings 73   83   164   167 
Total interest expense 129   134   272   272 
Net Interest Income 1,353   1,346   2,684   2,676 
Provision for Possible Loan Losses   -     -     -   - 

Net Interest Income after provision for possible loan losses
       
 1,353  1,346   2,684  2,676 
        
Noninterest Income       
Service fees on loan and deposit accounts 123   136   237   259 
Gain on sale of securities   34     -     34   - 
Loss on sale of other real estate owned -   (3)  -   (3)
Other 27   30   363   184 
Total noninterest income 184   163   634   440 
        
Noninterest Expense       
Salaries and employee benefits 694   695   1,522   1,425 
Occupancy 147   146   297   289 
Advertising 31   19   59   39 
Outside processing 113   118   230   244 
Professional fees 41   99   95   176 
FDIC insurance 23   32   46   80 
Defaulted loan expense 33   38   86   87 
Other 132   130   279   264 
Total noninterest expense 1,214   1,277   2,614   2,604 
Income before income taxes 323   232   704   512 
Income Tax Expense   107     -      237     -  
Net Income$  216  $  232  $  467  $  512 


CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
           
(Dollars in thousands, except share and per share data)         
  Quarter Ended
           
  6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
MARKET DATA          
Book value per share $  4.09  $  4.04  $  3.97  $   3.67  $   3.58 
Market value per share $  3.32  $  4.00  $  3.77  $  4.35  $   4.30 
Earnings per share - basic & diluted $  0.07  $  0.08  $  0.29  $  0.09  $   0.07 
Period end common shares  3,261,156   3,261,156   3,246,156   3,246,156   3,246,156 
           
PERFORMANCE RATIOS          
Return on average assets  0.59%  0.69%  2.59%  0.87%  0.70%
Return on average assets - CSB  0.74%  0.94%  2.47%  1.21%  1.11%
Return on average equity  6.52%  7.81%  30.80%  10.21%  8.13%
Return on average equity - CSB  6.04%  7.82%  21.05%  9.82%  8.92%
Net interest margin - CSB  4.42%  4.43%  4.50%  4.71%  4.93%
Efficiency ratio  79.00%  78.59%  82.80%  80.84%  84.64%
Texas Ratio  11.60%  11.59%  11.10%  11.40%  11.36%
           
CAPITAL & LIQUIDITY          
Tier 1 Leverage - CSB  8.55%  8.71%  8.78%  8.82%  9.30%
Common Equity Tier 1 Capital - CSB  9.18%  9.84%  -   -   - 
Tier 1 Risk Based Capital - CSB  9.18%  9.84%  9.68%  9.52%  9.82%
Total Risk Based Capital - CSB  10.43%  11.10%  10.93%  10.77%  11.08%
Loan to deposit ratio  94.13%  88.83%  91.47%  91.23%  94.72%
           
ASSET QUALITY          
Gross loan charge-offs $  3  $  249  $   -  $  11  $   -  
Net loan charge-offs (recoveries) $  (14) $  101  $  (20) $  (12) $  (20)
Allowance for loan and lease losses to total loans  1.49%  1.55%  1.63%  1.65%  1.67%
Nonperforming loans to total loans  0.17%  0.19%  0.13%  0.13%  0.13%
Nonperforming assets to total assets  1.09%  1.09%  1.07%  1.09%  1.15%


CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
      
 (unaudited)   (unaudited)
CATEGORY6/30/2015 12/31/2014 6/30/2014
      
Commercial Loans$  12,895  $  13,737  $  13,474 
Real Estate Mortgage Loans:     
Commercial   97,608     91,496     86,389 
1-4 Residential   4,592     5,086     5,601 
Construction and other   1,417     4,136     4,770 
Total mortgage loans on real estate   103,617     100,718     96,760 
Consumer   3,386     225     145 
Total Loans   119,898     114,680     110,379 
Less:  Allowance for loan losses   (1,785)    (1,873)    (1,842)
Net Loans$  118,113  $  112,807  $  108,537 
      
      
 (unaudited)   (unaudited)
ASSET QUALITY6/30/2015 12/31/2014 6/30/2014
      
Total nonaccrual loans$  200  $  144  $  144 
Total loans past due 90 days or more and still accruing   -      -      -  
Total nonperforming loans   200     144     144 
Other real estate owned   1,396     1,396     1,396 
Total nonperforming assets$  1,596  $  1,540  $  1,540 

 

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

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