Clarkston Financial Corporation Reports 2017 Q1 Results
CLARKSTON, Mich, April 26, 2017 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC) - (News), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $369,000 or $0.11 per share for the three months ended March 31, 2017, compared to net income of $195,000 or $0.06 per share for the three months ended March 31, 2016. The increase in income is related to an increase in loan interest income and decrease in operating expenses.
J. Grant Smith, CEO, said, "Our first quarter was very good with prudent loan growth, operating expense control and modest deposit growth. We are right on target with our performance metrics and goals for the first quarter. As we move forward into the second quarter we expect our operating performance to be even better. Our team is working to increase our yield on our loan portfolio as interest rates rise in an effort to maintain the excellent net interest margin which was 4.07% for the first quarter. The efficiency ratio at the Bank for the first quarter was 64.7% and we expect the ratio to improve as we move forward through the second and third quarters.”
Operating Results
The Corporation’s net interest income increased to $1,666,000 for the quarter ended March 31, 2017 compared to $1,551,000 for the same period ended March 31, 2016, an increase of $115,000 or 7.41%. The increase is directly attributable to the growth within the loan portfolio. The net interest margin of the Bank continues to hold steady at 4.07%. However, the net interest margin is lower than the first quarter of 2016 where the net interest margin was 4.29%.
Noninterest income increased in the first quarter of 2017. The quarter ended at $170,000 compared to $139,000 for the quarter ended March 31, 2016, an increase of $31,000 or 22.30%. This increase was largely driven by gains associated with the sale of SBA loans and deposit account fees. Noninterest expense decreased, ending the first quarter 2017 at $1,232,000 compared to $1,368,000 for the same period ended March 31, 2016, a decrease of $136,000 or 9.94%.
Balance Sheet
Total assets at March 31, 2017 were $185,894,000 compared to $182,148,000 at March 31, 2016, an increase of $3,746,000 or 2.06%. Gross loans increased $25,058,000 from $137,276,000 at March 31, 2016 to $162,334,000 at March 31, 2017, an increase of 18.25%. Total deposits increased $2,435,000 or 1.50%, ending at $164,603,000 for March 31, 2017 up from $162,168,000 for March 31, 2016. Total stockholders’ equity increased from $14,114,000 at March 31, 2016, to $15,597,000 for March 31, 2017, an increase of $1,483,000 or 10.51%.
Asset Quality
The Bank’s asset quality remains extremely good. Non-performing assets has been reduced from $1,581,000 or 0.87% at March 31, 2016 to $721,000 or 0.39% at March 31, 2017. The allowance for loan loss decreased slightly to 1.12% in 2017 compared to1.13% of total loans as of March 31, 2016, which included booking a provision in 2017 compared to no provision booked in 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.
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CLARKSTON FINANCIAL CORPORATION | ||||||||||||
| CONSOLIDATED BALANCE SHEET | ||||||||||||
| (Dollars, in thousands) | ||||||||||||
| (unaudited) | (unaudited) | |||||||||||
| 3/31/2017 | 12/31/2016 | 3/31/2016 | ||||||||||
| Assets | ||||||||||||
| Cash and due from banks | $ | 6,587 | $ | 9,004 | $ | 24,502 | ||||||
| Securities – Available for sale | 8,130 | 8,481 | 9,319 | |||||||||
| Federal Home Loan Bank stock, at cost | 232 | 232 | 232 | |||||||||
| Loans | 162,334 | 151,887 | 137,276 | |||||||||
| Allowance for possible loan losses | (1,817 | ) | (1,767 | ) | (1,544 | ) | ||||||
| Net loans | 160,517 | 150,119 | 135,732 | |||||||||
| Banking premises and equipment | 3,647 | 3,682 | 3,873 | |||||||||
| Deferred tax asset | 5,402 | 5,595 | 6,177 | |||||||||
| Other real estate owned | 721 | 1,221 | 1,581 | |||||||||
| Accrued interest receivable and other assets | 657 | 674 | 731 | |||||||||
| Total assets | $ | 185,894 | $ | 179,007 | $ | 182,148 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Liabilities | ||||||||||||
| Deposits | ||||||||||||
| Noninterest-bearing demand deposits | 82,643 | 80,217 | 85,781 | |||||||||
| Interest-bearing | 81,960 | 77,625 | 76,387 | |||||||||
| Total deposits | 164,603 | 157,842 | 162,168 | |||||||||
| Other Liabilities | ||||||||||||
| Other borrowings | 5,365 | 5,416 | 5,570 | |||||||||
| Accrued interest payable and other liabilities | 329 | 560 | 296 | |||||||||
| Total liabilities | 170,297 | 163,818 | 168,033 | |||||||||
| 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 | (42 | ) | ||||||||
| Accumulated deficit | (8,027 | ) | (8,396 | ) | (9,594 | ) | ||||||
| Accumulated other comprehensive income (loss) | (103 | ) | (141 | ) | (21 | ) | ||||||
| Total stockholders' equity | 15,597 | 15,189 | 14,114 | |||||||||
| Total liabilities and stockholders' equity | $ | 185,894 | $ | 179,007 | $ | 182,148 | ||||||
| CLARKSTON FINANCIAL CORPORATION | |||
| CONSOLIDATED STATEMENT OF OPERATIONS | |||
| (Dollars, in thousands) | |||
| (unaudited) | |||
| Three Months Ended | |||
| 3/31/2017 | 3/31/2016 | ||
| Interest Income | |||
| Interest and fees on loans | $1,752 | $1,602 | |
| Interest on investment securities: | 44 | 57 | |
| Interest on federal funds sold | 6 | 8 | |
| Total interest income | 1,802 | 1,667 | |
| Interest Expense | |||
| Deposits | 73 | 45 | |
| Borrowings | 63 | 71 | |
| Total interest expense | 135 | 116 | |
| Net Interest Income | 1,666 | 1,551 | |
| Provision for Possible Loan Losses | 45 | 0 | |
| Net Interest Income after provision for possible loan losses | |||
| 1,621 | 1,551 | ||
| Noninterest Income | |||
| Service fees on loan and deposit accounts | 122 | 116 | |
| Gain on sale of securities | - | 0 | |
| Loss on sale of other real estate owned | 4 | 0 | |
| Other | 45 | 23 | |
| Total noninterest income | 170 | 139 | |
| Noninterest Expense | |||
| Salaries and employee benefits | 747 | 847 | |
| Occupancy | 121 | 127 | |
| Advertising | 35 | 35 | |
| Outside processing | 119 | 122 | |
| Professional fees | 44 | 44 | |
| FDIC insurance | 23 | 27 | |
| Defaulted loan expense | 9 | 34 | |
| Other | 134 | 133 | |
| Total noninterest expense | 1,232 | 1,368 | |
| Income/(Loss) before income taxes | 560 | 322 | |
| Income Tax Expense | 190 | 127 | |
| Net Income/(Loss) | $369 | $195 | |
| CLARKSTON FINANCIAL CORPORATION | ||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||
| (Dollars in thousands, except share and per share data) | Quarter Ended | |||||||||||||||
| 03/31/17 | 12/31/16 | 09/30/16 | 06/30/16 | 03/31/16 | ||||||||||||
| MARKET DATA | ||||||||||||||||
| Book value per share | $ | 4.80 | $ | 4.67 | $ | 4.55 | $ | 4.44 | $ | 4.33 | ||||||
| Market value per share | $ | 6.60 | $ | 5.25 | $ | 3.95 | $ | 3.85 | $ | 4.00 | ||||||
| Earnings per share - basic & diluted | $ | 0.11 | $ | 0.16 | $ | 0.11 | $ | 0.11 | $ | 0.06 | ||||||
| Period end common shares | 3,249,156 | 3,249,156 | 3,261,156 | 3,261,156 | 3,261,156 | |||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||
| Return on average assets | 0.79 | % | 1.14 | % | 0.84 | % | 0.71 | % | 0.46 | % | ||||||
| Return on average equity | 7.56 | % | 10.66 | % | 10.17 | % | 8.88 | % | 5.64 | % | ||||||
| Net interest margin - CSB | 4.07 | % | 4.12 | % | 4.13 | % | 4.15 | % | 4.29 | % | ||||||
| Efficiency ratio | 67.08 | % | 57.12 | % | 65.89 | % | 71.65 | % | 80.97 | % | ||||||
| Texas Ratio | 3.60 | % | 6.32 | % | 7.32 | % | 7.57 | % | 10.15 | % | ||||||
| CAPITAL & LIQUIDITY | ||||||||||||||||
| Tier 1 Leverage - CSB | 9.09 | % | 9.04 | % | 8.76 | % | 8.38 | % | 8.40 | % | ||||||
| Common Equity Tier 1 Capital - CSB | 9.71 | % | 10.01 | % | 9.50 | % | 9.67 | % | 9.57 | % | ||||||
| Tier 1 Risk Based Capital - CSB | 9.71 | % | 10.01 | % | 9.50 | % | 9.67 | % | 9.57 | % | ||||||
| Total Risk Based Capital - CSB | 10.78 | % | 11.12 | % | 10.50 | % | 10.70 | % | 10.62 | % | ||||||
| Loan to deposit ratio | 98.62 | % | 96.23 | % | 97.10 | % | 89.11 | % | 84.65 | % | ||||||
| ASSET QUALITY | ||||||||||||||||
| Gross loan charge-offs | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 14 | ||||||
| Net loan charge-offs (recoveries) | $ | (4 | ) | $ | (170 | ) | $ | (5 | ) | $ | (14 | ) | $ | (16 | ) | |
| Allowance for loan and lease losses to total loans | 1.12 | % | 1.16 | % | 1.07 | % | 1.12 | % | 1.12 | % | ||||||
| Nonperforming loans to total loans | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
| Nonperforming assets to total assets | 0.39 | % | 0.68 | % | 0.69 | % | 0.69 | % | 0.87 | % | ||||||
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CLARKSTON FINANCIAL CORPORATION | |||||||||||
| LOAN INFORMATION | |||||||||||
| (unaudited) | (unaudited) | ||||||||||
| CATEGORY | 3/31/2017 | 12/31/2016 | 3/31/2016 | ||||||||
| Commercial Loans | $20,100 | $18,781 | $16,552 | ||||||||
| Real Estate Mortgage Loans: | |||||||||||
| Commercial | 124,641 | 118,838 | 110,616 | ||||||||
| 1-4 Residential | 2,919 | 3,036 | 3,797 | ||||||||
| Construction and other | 632 | 2,468 | 760 | ||||||||
| Total mortgage loans on real estate | 128,192 | 124,341 | 115,173 | ||||||||
| Consumer | 14,043 | 8,765 | 5,551 | ||||||||
| Total Loans | 162,334 | 151,887 | 137,276 | ||||||||
| Less: Allowance for loan losses | (1,817 | ) | (1,767 | ) | (1,544 | ) | |||||
| Net Loans | $160,517 | $150,119 | $135,732 | ||||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||||
| ASSET QUALITY | 3/31/2017 | 12/31/2016 | 3/31/2016 | ||||||||
| 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 | 1,581 | ||||||||
| Total nonperforming assets | $721 | $1,221 | $1,581 | ||||||||
Media Contact: Clarkston Financial Corporation – J. Grant Smith, CEO, 248-922-6945
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