CLARKSTON, Mich., April 29, 2011 (GLOBE NEWSWIRE) -- Clarkston Financial Corporation ("Corporation") (OTCBB:CKFC), the holding company for Clarkston State Bank ("Bank"), today reported a net loss of $38,000 or ($0.03) per basic and diluted common share for the three months ended March 31, 2011, compared to a net loss of $267,000 or $(0.73) per share for the three months ended March 31, 2010.
J. Grant Smith, Clarkston Financial Corporation President and Chief Executive Officer, said, "Although the Corporation posted a small loss for the first quarter, I am proud to announce that we have successfully raised approximately $8,000,000 in new equity. The capital was raised from a combination of local private investors as well as our board of directors, who believe in our mission and successes. All are committed to and are confident in the future of the Bank and the Corporation.
Mr. Smith continued, "During the first quarter, approximately $7,200,000 of this money was infused into the Bank. After the infusion the Bank's quarter end capital ratios were the following: Tier I Leverage Ratio of 9.07%; Tier I Risk Based Capital Ratio of 10.76%; Total Risk Based Capital of 12.03%. Based on these capital ratios the Bank is in excess of what is required to be considered well-capitalized by the Bank's primary regulator."
Mr. Smith concluded, "Our team has worked long and hard to get back to well-capitalized status. We have executed our plan with precision and cooperation from our primary regulator. It is now time to complete the turnaround of the Bank and return the Bank to profitability. We are very excited about our future."
Operating Results
The Corporation's net interest income was $1,025,000 for the quarter ended March 31, 2011 compared to $900,000 for the same period ended March 31, 2010, an increase of $125,000 or 13.88%. The net interest margin of the Bank continues to rise, ending at 4.60% for the quarter ended March 31, 2011, up from 3.53% for the quarter ended March 31, 2010. The rise in net interest margin is reflective of stronger core deposits, and more favorable deposit pricing.
For the second consecutive quarter, the Bank did not have to write a provision for loan loss. This is a reflection of improved asset quality, as well as an adequate allowance for loan and lease losses. As of March 31, 2011, the allowance for loan and lease losses was 3.16%, well above peer averages.
Noninterest income remained relatively flat, with a modest decline due to security gains during the first quarter 2010. Noninterest expense continued to decline, ending the first quarter 2011 at $1,289,000 compared to $1,366,000 for the same period ended March 31, 2010. This represents a decline of $77,000 or 5.64%. This decrease is a direct result of lower costs related to defaulted loans, another sign of improving asset quality.
Balance Sheet
Total assets at March 31, 2011 were $110,510,000 compared to $109,974,000 at March 31, 2010, an increase of $536,000 or 0.49%. The increase in total assets represents the influx of cash related to the capital raise completed by the Corporation.
Total loans decreased $6,024,000 from $87,051,000 at March 31, 2010 to $81,027,000 at March 31, 2011, a decline of 6.92%. Total deposits also shrank to $100,272,000 at March 31, 2011 from $103,841,000 at March 31, 2010, a decline of $3,569,000 or 3.44%. Both the decline in loans and deposits were a direct function of management's efforts to reduce the balance sheet and preserve capital.
Total stockholders' equity increased from ($1,690,000) at March 31, 2010 to $5,451,000 at March 31, 2011, an increase of $7,141,000 or 422.54%. This increase is due to the completion of the capital raise at the Corporation.
Asset Quality
The Bank continues to see significant improvements in the level of non-performing loans. Total non-performing loans have significantly decreased to $3,315,000 at March 31, 2011 compared to $5,395,000 from the same period 2010, a decline of $2,080,000, or 38.55%.
The allowance for possible loan losses decreased to 3.16% of total loans as of March 31, 2011, compared to 4.21% for the same period 2010. The decline in the allowance for loan loss percentage represents a strengthening of the loan portfolio, thus eliminating the need for a provision expense in the first quarter. The improved loan portfolio is a direct result of stronger controls over loan underwriting and an increased focus on credit administration.
Clarkston State Bank opened in January 1999 and operates four branches in Clarkston, Waterford, and Independence Township, 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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CONTACT: Media Contact: Clarkston Financial Corporation Julie Nemeth, Marketing/Public Relations (248)459-1664
