Clarkston Financial Corporation Reports 2015 Results

CLARKSTON, Mich., Feb. 04, 2016 -- Clarkston Financial Corporation (“Corporation”) (OTCBB:CKFC), the holding company for Clarkston State Bank (“Bank”), today reported a net income of $227,000 or $0.07 per share for the three months ended December 31, 2015, compared to net income of $926,000 or $0.30 per share for the three months ended December 31, 2014. For the twelve months ended December 31, 2015, the corporation reported a net income of $1,030,000 or $0.32 per share compared to a net income of $1,736,000 or $0.53 per share for the same period in 2014. During the first quarter 2015 the Corporation returned to booking a provision for income taxes.  The pre-tax net income was $1,547,000 for the twelve months ended December 31, 2015 compared to $1,078,000 for the period ended December 31, 2014.  This represents an increase of $469,000 or 43.50% in pre-tax income year over year.

J. Grant Smith, CEO, said, "We are very pleased with our performance in 2015. Our balance sheet fundamentals are very good and we have been prudent with our lending decisions. We believe we need to remain disciplined with our loan underwriting and not risk the temptation to take undue risk which is something we are seeing in the marketplace right now. We continue to maintain a very good net interest margin which ended the year at 4.29%. Both our loan and deposit portfolios have grown by double digits during the year. Most notable was the growth in our noninterest-bearing deposits which increased by $29.5 million or 55.72% during the year. We are positioned to continue our growth and we expect our operating performance to continue to improve in 2016.”

Operating Results

The Corporation’s net interest income increased to $1,409,000 for the quarter ended December 31, 2015 compared to $1,353,000 for the same period ended December 31, 2014.  The net interest margin of the Bank remains elevated compared to peers, but continues to have compression, ending at 4.29% for the quarter ended December 31, 2015, down from 4.50% for the quarter ended December 31, 2014.

Noninterest income decreased during the fourth quarter 2015.  The decrease is largely due to write downs on other real estate owned of $275,000 in December 2015.  The quarter ended at ($95,000) compared to $203,000 for the quarter ended December 31, 2014, a decrease of $298,000.  Noninterest expense decreased slightly, ending the third quarter 2015 at $1,246,000 compared to $1,288,000 for the same period ended December 31, 2014, a decrease of $42,000 or 3.26%.     

Balance Sheet

Total assets at December 31, 2015 were $172,302,000 compared to $144,379,000 at December 31, 2014, an increase of $27,923,000 or 19.34%.  The increase in assets is largely due to increases in noninterest-bearing demand deposits which had a year over year increase of $29,489,000 or 55.72%.

Net loans increased $12,692,000 from $112,807,000 at December 31, 2014 to $125,499,000 at December 31, 2015, an increase of 11.25%.  Total deposits increased $26,999,000 or 21.53%, ending at $152,367,000 for December 31, 2015, up from $125,368,000 at December 31, 2014.  Total stockholders’ equity increased from $12,889,000 at December 31, 2014 to $13,892,000 at December 31, 2015, an increase of $1,003,000 or 7.78%. 

Asset Quality

Total non-performing loans were zero at December 31, 2015 compared to $144,000 from the same period 2014.  The allowance for loan loss decreased to 1.20% of total loans as of December 31, 2015, compared to 1.63% for the same period 2014.  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