Clarkston Financial Corporation Reports 2016 Q3 Results
CLARKSTON, Mich., Oct. 26, 2016 (GLOBE NEWSWIRE) — Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) – (News), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $371,000 or $0.11 per share for the three months ended September 30, 2016, compared to net income of $336,000 or $0.10 per share for the three months ended September 30, 2015. For the nine months ended September 30, 2016, the corporation reported a net income of $881,000 or $0.27 per share compared to a net income of $803,000 or $0.25 per share for the same period in 2015.
J. Grant Smith, CEO, said, “With each passing quarter our performance continues to get better and better. Earlier this year we reengineered some of our processes within our deposit operations which helped to further reduce costs. In addition, our lending performance has been very good this year. The combination of these two factors has resulted in a significant improvement in our financial performance. Our asset quality fundamentals continue to out-perform industry peers and when combined with a robust net interest margin (4.13%) are the catalyst for very good bottom line performance. We expect the performance to continue to improve as we execute the initiative within our strategic plan.”
Operating Results
The Corporation’s net interest income increased to $1,618,000 for the quarter ended September 30, 2016 compared to $1,421,000 for the same period ended September 30, 2015. The net interest margin of the Bank remains elevated compared to peers, but continues to have compression, ending at 4.13% for the quarter ended September 30, 2016, down from 4.41% for the quarter ended September 30, 2015.
Noninterest income decreased during the third quarter 2016. The quarter ended at $195,000 compared to $326,000 for the quarter ended September 30, 2015, a decrease of $131,000 or 40.18%. The decrease in noninterest income is attributable to the gain on sale of loans recognized in the third quarter 2015. Noninterest expense decreased, ending the third quarter 2016 at $1,195,000 compared to $1,247,000 for the same period ended September 30, 2015, a decrease of $52,000 or 4.17%. The decline in noninterest expense has helped to improve the Corporation’s efficiency ratio, ending the quarter at 65.89% compared to 71.40% at September 30, 2015.
Balance Sheet
Total assets at September 30, 2016 were $176,814,000 compared to $156,777,000 at September 30, 2015, an increase of $20,037,000 or 12.78%. The increase in assets is largely due to increases in noninterest-bearing demand deposits.
Net loans increased $26,848,000 from $120,586,000 at September 30, 2015 to $147,434,000 at September 30, 2016, an increase of 22.26%. Total deposits increased $16,576,000 or 12.11%, ending at $153,473,000 for September 30, 2016, up from $136,897,000 at September 30, 2015. Total stockholders’ equity increased from $13,672,000 at September 30, 2015 to $14,852,000 at September 30, 2016, an increase of $1,180,000 or 8.63%.
Asset Quality
The Bank continued to not have any non-performing loans at September 30, 2016. The allowance for loan loss decreased to 1.07% of total loans as of September 30, 2016, compared to 1.47% for the same period 2015. 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) | |||||||||||||||||||||
| 9/30/2016 | 12/31/2015 | 9/30/2015 | |||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and due from banks | $ | 7,214 | $ | 24,264 | $ | 16,272 | |||||||||||||||||
| Securities – Available for sale | 10,558 | 9,649 | 6,764 | ||||||||||||||||||||
| Federal Home Loan Bank stock, at cost | 232 | 232 | 232 | ||||||||||||||||||||
| Loans | 149,027 | 127,028 | 122,387 | ||||||||||||||||||||
| Allowance for possible loan losses | (1,593 | ) | (1,529 | ) | (1,801 | ) | |||||||||||||||||
| Net loans | 147,434 | 125,499 | 120,586 | ||||||||||||||||||||
| Banking premises and equipment | 3,726 | 3,915 | 4,426 | ||||||||||||||||||||
| Deferred tax asset | 5,782 | 6,276 | 6,400 | ||||||||||||||||||||
| Other real estate owned | 1,221 | 1,581 | 1,396 | ||||||||||||||||||||
| Accrued interest receivable and other assets | 647 | 886 | 701 | ||||||||||||||||||||
| Total assets | $ | 176,814 | $ | 172,302 | $ | 156,777 | |||||||||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||
| Noninterest-bearing demand deposits | 83,635 | 82,408 | 62,585 | ||||||||||||||||||||
| Interest-bearing | 69,838 | 69,959 | 74,312 | ||||||||||||||||||||
| Total deposits | 153,473 | 152,367 | 136,897 | ||||||||||||||||||||
| Other Liabilities | |||||||||||||||||||||||
| Other borrowings | 7,968 | 5,621 | 5,673 | ||||||||||||||||||||
| Accrued interest payable and other liabilities | 521 | 422 | 535 | ||||||||||||||||||||
| Total liabilities | 161,962 | 158,410 | 143,105 | ||||||||||||||||||||
| Stockholders’ Equity | |||||||||||||||||||||||
| Common stock | 11,945 | 11,945 | 11,945 | ||||||||||||||||||||
| Paid-in capital | 11,826 | 11,826 | 11,826 | ||||||||||||||||||||
| Restricted stock – Unearned compensation | (37 | ) | (45 | ) | (48 | ) | |||||||||||||||||
| Accumulated deficit | (8,908 | ) | (9,789 | ) | (10,016 | ) | |||||||||||||||||
| Acc. other comprehensive income (loss) | 26 | (45 | ) | (35 | ) | ||||||||||||||||||
| Total stockholders’ equity | 14,852 | 13,893 | 13,672 | ||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 176,814 | $ | 172,302 | $ | 156,777 | |||||||||||||||||
| CLARKSTON FINANCIAL CORPORATION | |||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||||||||||||||
| (Dollars, in thousands) | (unaudited) | (unaudited) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| 9/30/2016 | 9/30/2015 | 9/30/2016 | 9/30/2015 | ||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||
| Interest and fees on loans | $ | 1,667 | $ | 1,493 | $ | 4,925 | $ | 4,370 | |||||||||||||||
| Interest on investment securities: | 44 | 37 | 149 | 106 | |||||||||||||||||||
| Interest on federal funds sold | 11 | 2 | 40 | 12 | |||||||||||||||||||
| Total interest income | 1,722 | 1,532 | 5,114 | 4,488 | |||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||
| Deposits | 42 | 52 | 129 | 160 | |||||||||||||||||||
| Borrowings | 62 | 59 | 196 | 223 | |||||||||||||||||||
| Total interest expense | 104 | 111 | 325 | 383 | |||||||||||||||||||
| Net Interest Income | 1,618 | 1,421 | 4,789 | 4,105 | |||||||||||||||||||
| Provision for Possible Loan Losses | 30 | – | 30 | – | |||||||||||||||||||
| Net Interest Income after provision for possible loan losses |
|||||||||||||||||||||||
| 1,588 | 1,421 | 4,759 | 4,105 | ||||||||||||||||||||
| Noninterest Income | |||||||||||||||||||||||
| Service fees on loan and deposit accounts | 124 | 118 | 368 | 355 | |||||||||||||||||||
| Gain on sale of securities | – | – | – | 34 | |||||||||||||||||||
| Loss on sale of other real estate owned | – | – | (14 | ) | – | ||||||||||||||||||
| Other | 71 | 208 | 139 | 571 | |||||||||||||||||||
| Total noninterest income | 195 | 326 | 493 | 960 | |||||||||||||||||||
| Noninterest Expense | |||||||||||||||||||||||
| Salaries and employee benefits | 703 | 701 | 2,277 | 2,223 | |||||||||||||||||||
| Occupancy | 122 | 117 | 372 | 414 | |||||||||||||||||||
| Advertising | 35 | 19 | 105 | 78 | |||||||||||||||||||
| Outside processing | 116 | 105 | 356 | 336 | |||||||||||||||||||
| Professional fees | 41 | 57 | 139 | 152 | |||||||||||||||||||
| FDIC insurance | 32 | 26 | 85 | 71 | |||||||||||||||||||
| Defaulted loan expense | 22 | 86 | 125 | 172 | |||||||||||||||||||
| Other | 124 | 136 | 379 | 415 | |||||||||||||||||||
| Total noninterest expense | 1,195 | 1,247 | 3,838 | 3,861 | |||||||||||||||||||
| Income before income taxes | 588 | 500 | 1,414 | 1,204 | |||||||||||||||||||
| Income Tax Expense | 217 | 164 | 533 | 401 | |||||||||||||||||||
| Net Income | $ | 371 | $ | 336 | $ | 881 | $ | 803 | |||||||||||||||
| CLARKSTON FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||
| (Dollars in thousands, except share and per share data) |
Quarter Ended | |||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | ||||||||||||
| MARKET DATA | ||||||||||||||||
| Book value per share | $ | 4.55 | $ | 4.44 | $ | 4.33 | $ | 4.26 | $ | 4.19 | ||||||
| Market value per share | $ | 3.95 | $ | 3.85 | $ | 4.00 | $ | 3.70 | $ | 4.30 | ||||||
| Earnings per share – basic & diluted | $ | 0.11 | $ | 0.11 | $ | 0.06 | $ | 0.07 | $ | 0.10 | ||||||
| Period end common shares | 3,261,156 | 3,261,156 | 3,261,156 | 3,261,156 | 3,261,156 | |||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||
| Return on average assets | 0.84 | % | 0.71 | % | 0.46 | % | 0.57 | % | 0.91 | % | ||||||
| Return on average equity | 10.17 | % | 8.88 | % | 5.64 | % | 6.62 | % | 9.99 | % | ||||||
| Net interest margin – CSB | 4.13 | % | 4.15 | % | 4.29 | % | 4.29 | % | 4.41 | % | ||||||
| Efficiency ratio | 65.89 | % | 71.65 | % | 80.97 | % | 94.80 | % | 71.40 | % | ||||||
| Texas Ratio | 7.32 | % | 7.57 | % | 10.15 | % | 10.90 | % | 9.72 | % | ||||||
| CAPITAL & LIQUIDITY | ||||||||||||||||
| Tier 1 Leverage – CSB | 8.76 | % | 8.38 | % | 8.40 | % | 8.46 | % | 8.85 | % | ||||||
| Common Equity Tier 1 Capital – CSB | 9.50 | % | 9.67 | % | 9.57 | % | 9.09 | % | 9.15 | % | ||||||
| Tier 1 Risk Based Capital – CSB | 9.50 | % | 9.67 | % | 9.57 | % | 9.09 | % | 9.15 | % | ||||||
| Total Risk Based Capital – CSB | 10.50 | % | 10.70 | % | 10.62 | % | 10.36 | % | 10.40 | % | ||||||
| Loan to deposit ratio | 97.10 | % | 89.11 | % | 84.65 | % | 83.37 | % | 89.40 | % | ||||||
| ASSET QUALITY | ||||||||||||||||
| Gross loan charge-offs | $ | 0 | $ | 0 | $ | 0 | $ | 14 | $ | 0 | ||||||
| Net loan recoveries | $ | (5 | ) | $ | (14 | ) | $ | (16 | ) | $ | (3 | ) | $ | (16 | ) | |
| Allowance for loan and lease losses | 1.07 | % | 1.12 | % | 1.12 | % | 1.20 | % | 1.47 | % | ||||||
| Nonperforming loans to total loans | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
| Nonperforming assets to total assets | 0.69 | % | 0.69 | % | 0.87 | % | 0.92 | % | 0.89 | % | ||||||
| CLARKSTON FINANCIAL CORPORATION | |||||||||||
| LOAN INFORMATION | |||||||||||
| (unaudited) | (unaudited) | ||||||||||
| CATEGORY | 9/30/2016 | 12/31/2015 | 9/30/2015 | ||||||||
| Commercial Loans | $ | 19,376 | $ | 14,126 | $ | 12,529 | |||||
| Real Estate Mortgage Loans: | |||||||||||
| Commercial | 117,313 | 102,098 | 99,476 | ||||||||
| 1-4 Residential | 3,321 | 4,077 | 4,334 | ||||||||
| Construction and other | 2,604 | 1,369 | 1,389 | ||||||||
| Total mortgage loans on real estate | 123,238 | 107,544 | 105,199 | ||||||||
| Consumer | 6,413 | 5,358 | 4,659 | ||||||||
| Total Loans | 149,027 | 127,028 | 122,387 | ||||||||
| Less: Allowance for loan losses | (1,593 | ) | (1,529 | ) | (1,801 | ) | |||||
| Net Loans | $ | 147,434 | $ | 125,499 | $ | 120,586 | |||||
| (unaudited) | (unaudited) | ||||||||||
| ASSET QUALITY | 9/30/2016 | 12/31/2015 | 9/30/2015 | ||||||||
| Total nonaccrual loans | $ | - | $ | - | $ | - | |||||
| Total loans past due 90 days or more and still accruing | - | - | - | ||||||||
| Total nonperforming loans | - | - | - | ||||||||
| Other real estate owned | 1,221 | 1,581 | 1,396 | ||||||||
| Total nonperforming assets | $ | 1,221 | $ | 1,581 | $ | 1,396 | |||||
Media Contact: Clarkston Financial Corporation – J. Grant Smith, CEO, 248-922-6945.
