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Clarkston Financial Corporation Reports 2019 Q1 Results

CLARKSTON, Mich., April 18, 2019 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC - News), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $578,000 or $0.17 per share for the three months ended March 31, 2019, compared to net income of $484,000 or $0.15 per share for the three months ended March 31, 2018.

J. Grant Smith, CEO, said, "2019 is off to a very good start for the Corporation. We have exceeded our budget targets for the first quarter which is generally our lowest performing quarter during the year. The loan pipeline is very good and we are continuing with our efforts to procure new deposit relationships. Our focus remains on strong balance sheet fundamentals and operating results above our peers. The Bank’s regulatory capital continues to grow through strong operating performance and good expense control. We expect our performance results to continue to be very good going forward.”     

Operating Results

The Corporation’s net interest income increased to $1,973,000 for the quarter ended March 31, 2019 compared to $1,759,000 for the same period ended March 31, 2018.  This represents an increase of $214,000 or 12.17% quarter over quarter.  This increase is primarily due to the growth in our loan portfolio. The net interest margin of the Bank improved this quarter ending March 31, 2019 at 4.01% compared to March 31, 2018 when it was 3.90%. The repricing of our commercial real estate portfolio combined with new loan originations is the main contributor to the improved net interest margin.     

Noninterest income decreased during the first quarter of 2019 when compared to the first quarter 2018.  The Corporation posted $123,000 for the quarter compared to $138,000 for the quarter ended March 31, 2018, a decrease of $15,000 or 10.87%.  The decrease is mostly attributable to less revenue from loan and deposit fee income. However, management does have several SBA loans that are expected to close in the second quarter which will enhance non-interest income. Noninterest expense slightly increased, ending the first quarter at $1,362,000 compared to $1,286,000 for the same period ended March 31, 2018, an increase of $76,000 or 5.91%.    

Balance Sheet

Total assets at March 31, 2019, were $219,190,000 compared to $201,575,000 at March 31, 2018, an increase of $17,615,000 or 8.74%.  The increase is mainly due to an increase in loans and deposits.

Gross loans increased $17,546,000 from $177,083,000 at March 31, 2018, to $194,629,000 at March 31, 2019, an increase of 9.91%.  Total deposits increased $15,227,000 or 8.45%, ending at $195,451,000 for March 31, 2019, up from $180,224,000 for March 31, 2018.  Total stockholders’ equity increased slightly from $15,823,000 at March 31, 2018 to $18,439,000 at March 31, 2019, an increase of $2,616,000 or 16.53%. 

Asset Quality

There were no non-performing loans at March 31, 2019. There remains one non-performing asset at $706,000 as of the first quarter for 2019. The allowance for loan loss slightly decreased to 1.06% of total loans as of March 31, 2019 compared to 1.16% for the same period 2018.  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)   (audited)   (unaudited)
    3/31/2019   12/31/2018   3/31/2018
Assets            
             
Cash and due from banks   $12,918     $7,422     $10,988  
Securities – Available for sale     6,182       6,440       7,539  
Federal Home Loan Bank stock, at cost     232       232       232  
             
Loans     194,629       192,075       177,083  
Allowance for possible loan losses     (2,064 )     (2,064 )     (2,054 )
Net loans     192,565       190,011       175,029  
             
Banking premises and equipment     3,536       3,581       3,598  
Deferred tax asset     2,183       2,352       2,835  
Other real estate owned     706       706       721  
Accrued interest receivable and other assets     868       886       633  
Total assets   $219,190     $211,630     $201,575  
             
Liabilities and Stockholders' Equity            
Liabilities            
Deposits            
Noninterest-bearing demand deposits     84,459       80,127       82,361  
Interest-bearing     110,992       98,007       97,862  
Total deposits     195,451       178,134       180,224  
             
Other Liabilities            
Federal Home Loan Bank advances     0       0       0  
Other borrowings     4,955       15,056       5,160  
Accrued interest payable and other liabilities     344       654       369  
Total liabilities     200,751       193,844       185,752  
             
Stockholders' Equity            
Common stock     11,923       11,923       11,923  
Paid-in capital     12,099       12,099       11,804  
Restricted stock - Unearned compensation     (172 )     (197 )     9  
Accumulated deficit     (5,282 )     (5,860 )     (7,721 )
Accumulated other comprehensive income (loss)     (130 )     (179 )     (191 )
             
Total stockholders' equity     18,439       17,786       15,823  
             
Total liabilities and stockholders' equity   $219,190     $211,630     $201,575  



 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
       
(Dollars, in thousands)      
  (unaudited)
  Three Months Ended
  3/31/2019   3/31/2018
Interest Income      
Interest and fees on loans $2,307   $1,927  
Interest on investment securities:   38     42  
Interest on federal funds sold   21     28  
Total interest income   2,366     1,997  
       
Interest Expense      
Deposits   316     179  
Borrowings   76     59  
Total interest expense   393     238  
       
Net Interest Income   1,973     1,759  
       
Provision for Possible Loan Losses   0     0  
       
Net Interest Income after provision for possible loan losses 1,973     1,759  
       
Noninterest Income      
Loan and deposit service fees   112     128  
Loss on sale of other real estate owned   0     0  
Other   11     11  
Total noninterest income   123     138  
       
Noninterest Expense      
Salaries and employee benefits   817     766  
Occupancy   127     121  
Advertising   71     44  
Outside processing   144     146  
Professional fees   51     50  
FDIC insurance   21     21  
Defaulted loan expense   2     (1 )
Other   129     141  
Total noninterest expense   1,362     1,286  
       
Income/(Loss) before income taxes   734     611  
       
Income Tax Expense     156       127  
       
Net Income/(Loss) $578   $484  


 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
             
(Dollars in thousands, except share and per share data)   Quarter Ended
             
    03/31/19 12/31/18 09/30/18 06/30/18 03/31/18
MARKET DATA            
Book value per share   $5.57   $5.37   $5.15   $4.97   $4.78  
Market value per share   $6.81   $7.20   $7.50   $8.01   $8.00  
Earnings per share - basic & diluted   $0.17   $0.19   $0.18   $0.19   $0.15  
Period end common shares     3,309,156     3,309,156     3,309,156     3,309,156     3,309,156  
             
PERFORMANCE RATIOS            
Return on average assets     1.07 %   1.22 %   1.17 %   1.23 %   0.97 %
Return on average equity     10.41 %   11.97 %   11.51 %   12.04 %   9.75 %
Net interest margin     4.01 %   3.96 %   3.90 %   3.81 %   3.90 %
Efficiency ratio     64.97 %   60.93 %   62.02 %   62.39 %   67.79 %
Texas ratio     2.98 %   3.07 %   3.21 %   3.32 %   3.52 %
             
CAPITAL & LIQUIDITY            
Tier 1 Leverage     10.13 %   10.05 %   9.77 %   9.68 %   9.36 %
Common Equity Tier 1 Capital     10.81 %   10.65 %   10.63 %   10.32 %   10.19 %
Tier 1 Risk Based Capital     10.81 %   10.65 %   10.63 %   10.32 %   10.19 %
Total Risk Based Capital     11.84 %   11.70 %   11.73 %   11.43 %   11.33 %
Loan to deposit ratio     99.58 %   107.83 %   98.57 %   100.76 %   98.26 %
             
ASSET QUALITY            
Gross loan charge-offs   $0   $0   $0   $0   $0  
Net loan charge-offs (recoveries)   $(1 ) $(3 ) $(3 ) $(4 ) $(2 )
Allowance for loan and lease losses to total loans     1.06 %   1.07 %   1.13 %   1.13 %   1.16 %
Nonperforming loans to total loans     0.00 %   0.00 %   0.00 %   0.00 %   0.00 %
Nonperforming assets to total assets     0.32 %   0.34 %   0.34 %   0.35 %   0.36 %