CLARKSTON, Mich., July 27, 2017 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") 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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