Clarkston Financial Corporation Reports 2019 Q3 Results
CLARKSTON, Mich., Oct. 28, 2019 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC - News), the holding company for Clarkston State Bank (“Bank”), today reported net income of $704,000 of $0.21 per share for the three months ended September 30, 2019, compared to net income of $604,000 or $0.18 per share for the three months ended September 30, 2018.
J. Grant Smith, CEO, said, "Our financial performance continues to be very good and progress on our merger with Waterford Bancorp is progressing very well. The Bank’s fundamentals are very good; excellent asset quality (0.00% delinquency, $0.00 non-performing loans), great deposit portfolio stratification (38.9% demand deposit accounts to total deposits) and low overhead (59.6% efficiency ratio). We have now received both regulatory and shareholder approval for the merger with Waterford Bancorp. The transaction is progressing, nicely and we expect an early first quarter 2020 closing.
Operating Results
The Corporation’s net interest income before provision, increased to $2,081,000 for the quarter ended September 30, 2019, compared to $1,856,000 for the same period ended September 30, 2018. This represents an increase of $225,000 or 12.12% quarter over quarter. The net interest margin of the Bank has decreased slightly to 3.88% as of September 30, 2019, compared to 3.90% for September 30, 2018. The Bank’s net interest margin has decreased as short-term interest rates have declined.
Noninterest income decreased during the third quarter of 2019 when compared to the third quarter of 2018. The Corporation posted $124,000 for the quarter compared to $173,000 for the quarter ended September 30, 2018, a decrease of $49,000 or 28.32%. The decrease is mostly attributable to fewer gains realized in 2019 on the sale of SBA loans. Noninterest expense increased slightly, ending the third quarter at $1,316,000 compared to $1,259,000 for the same period ended September 30, 2018, an increase of $57,000 or 4.53%.
Balance Sheet
Total assets at September 30, 2019, were $228,749,000 compared to $208,271,000 at September 30, 2018, an increase of $20,478,000 or 9.83%.
Gross loans increased $22,745,000 from $183,002,000 at September 30, 2018, to $205,747,000 at September 30, 2019, an increase of 12.43%. Total deposits increased $17,681,000 or 9.52%, ending at $203,339,000 for September 30, 2019, up from $185,658,000 for September 30, 2018. Total stockholders’ equity increased slightly from $17,043,000 at September 30, 2018 to $19,912,000 at September 30, 2019, an increase of $2,869,000 or 16.83%.
Asset Quality
There were no non-performing loans at September 30, 2019. There remains one non-performing asset at $706,000 as of the third quarter of 2019. The allowance for loan loss decreased to 1.00% of total loans as of September 30, 2019 compared to 1.13% 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) | |||||||
| 9/30/2019 | 12/31/2018 | 9/30/2018 | |||||||
| Assets | |||||||||
| Cash and due from banks | $12,382 | $7,422 | $12,724 | ||||||
| Securities – Available for sale | 5,623 | 6,440 | 6,709 | ||||||
| Federal Home Loan Bank stock, at cost | 232 | 232 | 232 | ||||||
| Loans | 205,747 | 192,075 | 183,002 | ||||||
| Allowance for possible loan losses | (2,065) | (2,064) | (2,061) | ||||||
| Net loans | 203,682 | 190,011 | 180,941 | ||||||
| Banking premises and equipment | 3,459 | 3,581 | 3,632 | ||||||
| Deferred tax asset | 1,705 | 2,352 | 2,526 | ||||||
| Other real estate owned | 706 | 706 | 706 | ||||||
| Accrued interest receivable and other assets | 959 | 886 | 801 | ||||||
| Total assets | $228,749 | $211,630 | $208,271 | ||||||
| Liabilities and Stockholders' Equity | |||||||||
| Liabilities | |||||||||
| Deposits | |||||||||
| Noninterest-bearing demand deposits | 79,021 | 80,127 | 85,676 | ||||||
| Interest-bearing | 124,318 | 98,007 | 99,982 | ||||||
| Total deposits | 203,339 | 178,134 | 185,658 | ||||||
| Other Liabilities | |||||||||
| Federal Home Loan Bank advances | 0 | 0 | 0 | ||||||
| Other borrowings | 4,853 | 15,056 | 5,058 | ||||||
| Accrued interest payable and other liabilities | 645 | 654 | 512 | ||||||
| Total liabilities | 208,837 | 193,844 | 191,227 | ||||||
| Stockholders' Equity | |||||||||
| Common stock | 11,923 | 11,923 | 11,923 | ||||||
| Paid-in capital | 12,099 | 12,099 | 11,804 | ||||||
| Restricted stock - Unearned compensation | (123) | (197) | 61 | ||||||
| Accumulated deficit | (3,958) | (5,860) | (6,505) | ||||||
| Accumulated other comprehensive income (loss) | (29) | (179) | (239) | ||||||
| Total stockholders' equity | 19,912 | 17,786 | 17,043 | ||||||
| Total liabilities and stockholders' equity | $228,749 | $211,630 | $208,271 | ||||||
| CLARKSTON FINANCIAL CORPORATION | ||||||||||||||
| CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||
| (Dollars, in thousands) | ||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| 9/30/2019 | 9/30/2018 | 9/30/2019 | 9/30/2018 | |||||||||||
| Interest Income | ||||||||||||||
| Interest and fees on loans | $2,579 | $2,139 | $7,364 | $6,066 | ||||||||||
| Interest on investment securities: | 34 | 39 | 105 | 124 | ||||||||||
| Interest on federal funds sold | 27 | 16 | 78 | 63 | ||||||||||
| Total interest income | 2,640 | 2,194 | 7,548 | 6,254 | ||||||||||
| Interest Expense | ||||||||||||||
| Deposits | 468 | 272 | 1,194 | 663 | ||||||||||
| Borrowings | 91 | 65 | 255 | 187 | ||||||||||
| Total interest expense | 559 | 338 | 1,448 | 849 | ||||||||||
| Net Interest Income | 2,081 | 1,856 | 6,100 | 5,405 | ||||||||||
| Provision for Possible Loan Losses | 0 | 0 | 0 | 0 | ||||||||||
| Net Interest Income after provision for possible loan losses | 2,081 | 1,856 | 6,100 | 5,405 | ||||||||||
| Noninterest Income | ||||||||||||||
| Loan and deposit service fees | 116 | 119 | 340 | 365 | ||||||||||
| Loss on sale of other real estate owned | 0 | 0 | 0 | 0 | ||||||||||
| Other | 9 | 55 | 75 | 198 | ||||||||||
| Total noninterest income | 124 | 173 | 415 | 563 | ||||||||||
| Noninterest Expense | ||||||||||||||
| Salaries and employee benefits | 785 | 758 | 2,368 | 2,289 | ||||||||||
| Occupancy | 130 | 128 | 379 | 367 | ||||||||||
| Advertising | 68 | 45 | 208 | 135 | ||||||||||
| Outside processing | 146 | 124 | 447 | 398 | ||||||||||
| Professional fees | 57 | 53 | 257 | 157 | ||||||||||
| FDIC insurance | (1) | 21 | 34 | 63 | ||||||||||
| Defaulted loan expense | 1 | (7) | 9 | (7) | ||||||||||
| Other | 131 | 136 | 403 | 416 | ||||||||||
| Total noninterest expense | 1,316 | 1,259 | 4,105 | 3,818 | ||||||||||
| Income/(Loss) before income taxes | 889 | 771 | 2,410 | 2,150 | ||||||||||
| Income Tax Expense | 185 | 167 | 508 | 449 | ||||||||||
| Net Income/(Loss) | $704 | $604 | $1,902 | $1,701 | ||||||||||
| CLARKSTON FINANCIAL CORPORATION | ||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||
| (Dollars in thousands, except share and per share data) | Quarter Ended | |||||
| 09/30/19 | 06/30/19 | 03/31/19 | 12/31/18 | 09/30/18 | ||
| MARKET DATA | ||||||
| Book value per share | $6.02 | $5.79 | $5.57 | $5.37 | $5.15 | |
| Market value per share | $10.35 | $10.34 | $6.81 | $7.20 | $7.50 | |
| Earnings per share - basic & diluted | $0.21 | $0.19 | $0.17 | $0.19 | $0.18 | |
| 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 | 1.24% | 1.12% | 1.07% | 1.22% | 1.17% | |
| Return on average equity | 11.93% | 10.83% | 10.41% | 11.97% | 11.51% | |
| Net interest margin | 3.88% | 4.00% | 4.01% | 3.96% | 3.90% | |
| Efficiency ratio | 59.69% | 64.46% | 64.97% | 60.93% | 62.02% | |
| Texas ratio | 2.78% | 2.88% | 2.98% | 3.07% | 3.21% | |
| CAPITAL & LIQUIDITY | ||||||
| Tier 1 Leverage | 10.44% | 10.13% | 10.13% | 10.05% | 9.77% | |
| Common Equity Tier 1 Capital | 10.99% | 10.94% | 10.81% | 10.65% | 10.63% | |
| Tier 1 Risk Based Capital | 10.99% | 10.94% | 10.81% | 10.65% | 10.63% | |
| Total Risk Based Capital | 11.96% | 11.95% | 11.84% | 11.70% | 11.73% | |
| Loan to deposit ratio | 101.18% | 107.62% | 99.58% | 107.83% | 98.57% | |
| ASSET QUALITY | ||||||
| Gross loan charge-offs | $0 | $0 | $0 | $0 | $0 | |
| Net loan charge-offs (recoveries) | ($1) | ($0) | ($1) | ($3) | ($3) | |
| Allowance for loan and lease losses to total loans | 1.00% | 1.02% | 1.06% | 1.07% | 1.13% | |
| Nonperforming loans to total loans | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |
| Nonperforming assets to total assets | 0.31% | 0.32% | 0.32% | 0.34% | 0.34% | |
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