updated 4/29/2011 9:45:46 AM ET 2011-04-29T13:45:46

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.

The Clarkston Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8228

 

CLARKSTON FINANCIAL CORPORATION

CONSOLIDATED FINANCIAL HIGHLIGHTS
 
(Dollars in thousands, except share and per share data)  
   
  Quarter Ended      
         
  3/31/2011 12/31/2010 3/31/2010  
MARKET DATA        
Book value per share  $ 0.25  $  (1.23)  $ (0.76)  
Market value per share  $ 0.90  $ 0.50  $ 0.66  
Earnings per share - basic & diluted  $ (0.03)  $ 0.06  $ (0.73)  
Average basic and diluted shares outstanding 5,464,777 2,225,706 1,466,087  
Period end common shares 26,737,435 2,225,706 2,225,706  
         
PERFORMANCE RATIOS        
Return on average assets -0.14% -1.24% -0.95%  
Return on average equity -13.58% -72.55% -184.16%  
Net interest margin - CSB 4.60% 4.18% 3.53%  
Efficiency ratio 103.03% 96.86% 118.87%  
Texas Ratio 58.12% 143.60% 130.31%  
         
CAPITAL & LIQUIDITY        
Total Risk Based Capital - CSB 12.03% 3.91% 3.89%  
Tier 1 Risk Based Capital - CSB 10.76% 2.64% 2.61%  
Tier 1 Leverage - CSB 9.07% 2.26% 2.20%  
Loan to deposit ratio 80.81% 79.71% 83.83%  
         
ASSET QUALITY        
Gross loan charge-offs    $ 91  $ 559  $ 122  
Net loan charge-offs    $    5    $ 509  $ 83  
Allowance for loan and lease losses to total loans 3.16% 3.20% 4.21%  
Nonperforming loans to total loans 4.09% 3.37% 6.20%  
Nonperforming assets to total assets 6.43% 6.81% 7.22%  
 
 

CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
 
(Dollars, in thousands)
  (unaudited)   (unaudited)
  3/31/2011 12/31/2010 3/31/2010
Assets      
       
Cash and cash equivalents:      
Cash and due from banks  $ 10,715  $ 7,125  $ 4,780
Federal funds sold -- -- 1,405
Total cash and cash equivalents 10,715 7,125 6,185
       
Securities – Available for sale 11,670 8,748 11,973
Federal Home Loan Bank stock, at cost 662 662 760
       
Loans 81,027 80,160 87,051
Allowance for possible loan losses (2,560) (2,566) (3,666)
Net loans 78,467 77,594 83,385
       
Banking premises and equipment 4,723 4,731 4,821
Other real estate owned 3,789 4,365 2,548
Accrued interest receivable and other assets 484 486 302
Total assets  $ 110,510  $ 103,711  $ 109,974
       
Liabilities and Stockholders' Equity (Deficit)      
Liabilities      
Deposits      
Noninterest-bearing demand deposits 22,601 20,051 20,240
Interest-bearing 77,671 80,515 83,601
Total deposits 100,272 100,566 103,841
       
Other Liabilities      
Federal Home Loan Bank advances -- -- 2,000
Other borrowings 4,330 5,330 5,330
Accrued interest payable and other liabilities 457 551 492
Total liabilities 105,059 106,447 111,664
       
Stockholders' Equity      
Common stock 10,733 6,630 6,645
Paid-in capital 10,733 6,630 6,645
Restricted stock - Unearned compensation (30) (53) (175)
Accumulated deficit (16,076) (16,037) (14,974)
Accumulated other comprehensive income (loss) 91 94 170
       
Total stockholders' equity 5,451 (2,736) (1,690)
       
Total liabilities and stockholders' equity  $ 110,510  $ 103,711  $ 109,974
 
 
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
     
(Dollars, in thousands)    
  (unaudited) (unaudited)
  3/31/2011 3/31/2010
Interest Income    
Interest and fees on loans  $ 1,218  $ 1,290
Interest on investment securities: 84 111
Interest on federal funds sold 4 1
Total interest income 1,306 1,402
     
Interest Expense    
Deposits 205 396
Borrowings     76 106
Total interest expense 281 502
     
Net Interest Income 1,025 900
     
Provision for Possible Loan Losses  -- 50
     
Net Interest Income/(Expense) after provision for possible loan losses  1,025  850
   
Noninterest Income    
Service fees on loan and deposit accounts 149 159
Gain on sale of securities  -- 33
Loss on sale of other real estate owned 28 (19)
Other 49 76
Total noninterest income 226 249
     
Noninterest Expense    
Salaries and employee benefits 514 507
Occupancy 156 139
Advertising 18 9
Outside processing 127 125
Professional fees 76 159
FDIC insurance 126 107
Defaulted loan expense 160 210
Other 112 110
Total noninterest expense 1,289 1,366
     
Loss before income taxes (38) (267)
     
Income Tax Benefit  --   -- 
     
Net Loss  $ (38)  $ (267)

 

CLARKSTON FINANCIAL CORPORATION
LOAN INFORMATION
 
  (unaudited)   (unaudited)
CATEGORY 3/31/2011 12/31/2010 3/31/2010
       
Commercial Loans  $ 8,041  $ 8,565  $ 7,865
Real Estate Mortgage Loans:      
Commercial  59,492  57,752  60,232
1-4 Residential   9,610  9,869  10,651
Construction and other  3,145  3,160  7,145
Total mortgage loans on real estate   72,247  70,781  78,027
       
Consumer   739  814  1,158
Total Loans  81,027   80,160  87,051
       
Less: Allowance for loan losses  (2,560)  (2,566)  (3,666)
Net Loans  $ 78,467  $  77,594  $ 83,385
       
  (unaudited)   (unaudited)
ASSET QUALITY 3/31/2011 12/31/2010 3/31/2010
       
Total nonaccrual loans  $ 3,315  $ 2,700  $ 5,395
Total loans past due 90 days or more and still accruing  --   --   -- 
Total nonperforming loans  3,315  2,700  $ 5,395
Other real estate owned  3,789  4,365  2,548
Total nonperforming assets  $ 7,104  $ 7,065  $ 7,943
CONTACT: Media Contact:
         Clarkston Financial Corporation
         Julie Nemeth, Marketing/Public Relations
         (248)459-1664

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