[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission file number: 333-63685
CLARKSTON FINANCIAL CORPORATION
(Exact name of small business issuer as specified in its charter)
| MICHIGAN (State of other jurisdiction of incorporation or organization) | 38-3412321 (I.R.S. Employer Identification No.) |
15 South Main Street, Clarkston, Michigan 48346
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 625-8585
Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ___X___ No ______
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 1,026,012 shares of the Company’s Common Stock (no par value) were outstanding as of September 30, 2002.
Transitional Small Business Disclosure Format (check one): Yes ______ No ____X___
Page
Number(s)
---------
Part I Financial Information (unaudited):
Item 1.
------
Consolidated Financial Statements........................ 3-7
Notes to Consolidated Financial Statements............... 8-11
Item 2.
------
Management's Discussion and Analysis of
Financial Condition and Results of Operations............12-15
Part II. Other Information
Item 1.
------
Legal Proceedings........................................ 16
Item 2.
------
Changes in Securities and Use of Proceeds................ 16
Item 3.
------
Defaults Upon Senior Securities.......................... 16
Item 4.
------
Submission of Matters to a Vote of Securities Holders.... 16
Item 5.
------
Other Information......................................... 16
Item 6.
------
Exhibits and Reports on Form 8-K.......................... 16
Signatures .......................................................... 17
2
Part I Financial Information (unaudited)
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
September 30, 2002 (unaudited) and December 31, 2001
(dollars in thousands, except per share data)
September 30, December 31,
2002 2001
---------------- ---------
(Unaudited)
ASSETS
Cash and Cash Equivalents
Total cash and due from banks................................ $ 2,776 $ 1,856
Federal funds sold.......................................... 2,201 3,975
---------------- -------------
Total Cash and Cash Equivalents......................... 4,977 5,831
Securities Held to Maturity......................................... 16,262 5,605
Securities Available for Sale, at fair value........................ 38,277 36,905
Loans, less Loan Loss Reserve
Total loans.................................................. 49,966 34,455
Allowance for loan losses.................................... (610) (419)
---------------- --------------
Net Loans.................................................... 49,357 34,036
Net Property and Equipment.......................................... 1,417 794
Accrued interest receivable......................................... 552 441
Deferred Tax Asset.................................................. 123 140
Other Assets........................................................ 151 168
--------------- -------------
Total Assets............................................ $ 111,113 $ 83,920
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing.......................................... 12,246 9,230
Interest-bearing............................................. 87,518 64,930
------------- ----------
Total deposits.......................................... 99,764 74,160
Accrued Expenses and Other Liabilities....................... 1,637 1,093
Shareholders' Equity
Common stock, no par value: 10,000,000
Shares authorized; 1,026,012 shares
issued and outstanding as of September 30,
2002 and December 31, 2001............................. 4,306 4,306
Capital surplus.............................................. 4,306 4,306
Retained Earnings............................................ 583 88
Accumulated other comprehensive income (loss)................ 517 (33)
-------------- ------------
Total Shareholder Equity............................... 9,712 8,667
-------------- -----------
Total Liabilities and Shareholders' Equity............ $ 111,113 $ 83,920
============ ==========
See accompanying notes to consolidated financial statements
3
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
Three and Nine Month Periods Ended September 30, 2002 and September 30, 2001
(dollars in thousands, except per share data)
(unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Interest Income
Loans, including fees ................ $ 880 $ 680 $ 2,317 $ 1,847
Securities............................ 692 569 2,094 1,502
Federal Funds sold.................... 16 31 51 131
-------- ---------- ----------- ----------
Total interest income............ 1,588 1,280 4,462 3,480
Interest Expense
Deposits.............................. 729 700 2,016 1,909
Other................................. 0 0 0 0
-------- ---------- ----------- ----------
Total interest expense........... 729 700 2,016 1,909
Net Interest Income.......................... 859 580 2,446 1,571
Provision for loan losses.................... 108 32 153 73
-------- ---------- ----------- ----------
Net interest income
After provision for loan losses.............. 751 548 2,293 1,498
Noninterest income
Gains on sale of securities............. 36 89 77 127
Other income............................ 99 38 279 193
-------- ---------- ----------- ----------
Total noninterest income......... 135 127 356 320
Noninterest expense
Salaries and benefits................... 279 202 969 606
Occupancy expense of premises........... 54 41 180 115
Furniture and equipment expense......... 45 40 133 110
Computer and data processing expenses... 54 71 174 168
Advertising and public relations........ 39 34 85 86
Professional fees....................... 54 24 126 81
Amortization of deposit premium
and conversion cost................. 6 5 22 17
Other expense........................... 53 50 204 118
-------- ---------- ----------- ----------
Total noninterest expense........ 584 467 1,893 1,301
-------- ---------- ----------- ----------
Profit before federal income tax............. 302 208 756 517
Federal income tax........................... 107 70 261 167
-------- ---------- ----------- ----------
Net profit .................................. 195 $ 138 $ 495 $ 350
======== ========== =========== ==========
Basic and diluted profit per share........... $ .19 $ .13 $ .48 $ .34
======== ========== =========== ==========
See accompanying notes to consolidated financial statements.
4
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three and Nine Month Periods Ended September 30, 2002 and September 30, 2001
(dollars in thousands)
(Unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September, 30 September 30,
2002 2001 2002 2001
---- ---- ---- ----
Net profit as Reported................... $195 $ 138 $495 $ 350
Other Comprehensive
Income, Net of Tax:
Change in unrealized gain / loss
on securities
available for sale............. 575 297 550 314
-------- ------ --------- --------
Comprehensive Profit..................... $ 770 $ 435 $ 1,045 $ 664
======== ======= ========= =======
See accompanying notes to consolidated financial statements.
5
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Nine Months ended September 30, 2002
(dollars in thousands)
(Unaudited)
Accumulated
Other Total
Common Capital Retained Comprehensive Shareholders'
Stock Surplus Earnings Income Equity
--------- ------- --------- ------------------ ----------
Balance December 31, 2001..................... $ 4,306 $4,306 $88 $(33) $8,667
Net income for nine months
Ended September 30, 2002 (unaudited).......... 495 495
Increase in fair market value of securities
available for sale............................ 550 550
---------- --------- -------- ---- ------------
Balance September 30, 2002.................... $ 4,306 $4,306 $ 583 $ 517 $ 9,712
======= ======= ============ ======== ================
See accompanying notes to consolidated financial statements.
6
CLARKSTON FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months ended September 30, 2002 and September 30, 2001
(dollars in thousands)
(unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
2002 2001
---------- ----
Net Cash Provided by Operating Activities:
Net cash provided by operating activities..................... $ 1,399 $ 901
Cash Flows from Investing Activities:
Net increase in loans......................................... (15,511) (7,231)
Purchase of held-to-maturity securities....................... (10,669) (2,906)
Proceeds from maturities of held-to-maturity securities....... 0 12,059
Proceeds from sales of held-to-maturity securities............ 0 4,368
Purchase of available-for-sale securities..................... (24,465) (46,719)
Proceeds from sales of available-for-sale securities.......... 23,496 24,656
Property and equipment expenditures........................... (708) (558)
------------- -------------
Net cash provided by investing activities..................... (27,857) (16,331)
Cash Flows from Financing Activities:
Increase in deposits.......................................... 25,603 17,078
------------- -------------
Net increase in cash and cash equivalents............................ (855) 1,648
Cash and cash equivalents at beginning of year....................... 5,831 3,412
------------- -------------
Cash and cash equivalents at September 30, 2002 and 2001............. $ 4,976 $ 5,060
============= =============
See accompanying notes to consolidated financial statements.
7
CLARKSTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002 (unaudited) and December 31, 2001
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Proxy Statement dated April 1, 2002 containing audited financial statements as of December 31, 2001, 2000 and 1999.
Basic earnings (loss) per share is based on net income (loss) divided by the weighted average number of shares outstanding during the period.
The accompanying consolidated financial statements include the accounts of Clarkston Financial Corporation (the "Company"), and its wholly-owned subsidiary, Clarkston State Bank (the "Bank"). All significant intercompany accounts and transactions have been eliminated in consolidation.
8
CLARKSTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002 (unaudited) and December 31, 2001
The amortized cost and fair values of securities were as follows (dollars in thousands):
Available for Sale
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---------- ----------- ------------ -------
September 30, 2002 (Unaudited)
------------------------------
Taxable variable rate demand
Municipal revenue bonds,
Short term corporate
Commercial paper, and bonds
of government agencies........... $37,448 $935 $ (106) $38,277
======== ==== ========== =======
Held to Maturity
September 30, 2002 (Unaudited)
------------------------------
Taxable variable rate demand
Municipal revenue bonds,
Short term corporate
Commercial paper, and bonds
of government agencies........... $16,262 $621 $ (17) $16,866
========= ===== =========== =======
Contractual maturities of debt securities at September 30, 2002, were as follows. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Available-for-Sale Securities
-------------------------------
Amortized Estimated
Cost Market Value
------ ------------
(dollars in thousands)
Due from 2002 to 2003.................................... $ 0 $ 0
Due from 2003 to 2005.................................... 0 0
Due from 2005 to 2007.................................... 2,026 2,049
Due from 2007 to 2032.................................... 35,422 36,228
------ ------
$37,448 $38,277
======= =======
Held-To-Maturity
------------------------------
Amortized Estimated
Cost Market Value
------------ ------------
Due from 2002-2003....................................... $ 0 $ 0
Due from 2003-2005....................................... 0 0
Due from 2005-2007....................................... 0 0
Due from 2007-2032....................................... 16,262 16,866
------ ------
$ 16,262 $16,866
======== =======
(Continued)
9
CLARKSTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002 (unaudited) and December 31, 2001
Loans are as follows (dollars in thousands):
September 30, December 31,
2002 2001
---------------- -----------
(Unaudited)
Commercial...................................... $41,033 $25,299
Mortgage........................................ 5,299 5,441
Consumer........................................ 3,634 3,715
-------------- --------
49,966 34,455
Allowance for loan losses....................... 610 419
------------- --------
$ 49,356 $ 34,036
============= ========
Activity in the allowance for loan losses is as follows (dollars in thousands):
For the
Nine months Year Ended
Ended December 31,
September 30, 2002 2001
------------------ ----------
(unaudited)
Balance at beginning of period............................ $ 419 $ 379
Provision charged to operating expense............. 153 90
Net loan (charge-offs) recoveries......................... 38 (50)
--------- ---------------
Balance at end of period.................................. $ 610 $ 419
========= =============
Allowance for loan losses as a percentage of
loans at end of period............................. 1.22% 1.21%
======= ============
(Continued)
10
CLARKSTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002 (unaudited) and December 31, 2001
Premises and equipment are as follows (dollars in thousands):
September 30, 2002 December 31, 2001
------------------ -----------------
(unaudited)
Building and improvements................................... $ 1,085 $ 404
Furniture and equipment 679 652
--------- --------
Total Bank premises and equipment........................... 1,764 1,056
Less accumulated depreciation............................... 347 262
--------- --------
Net carrying amount......................................... $ 1,417 $ 794
======= =======
NOTE 7 - DEPOSITS
Interest-bearing deposits are summarized as follows (dollars in thousands):
September 30, December 31,
2002 2001
-------------- -----------
Demand deposit accounts.......................................... $4,664 $ 2,233
Money market accounts............................................ 27,425 17,291
Savings accounts................................................. 7,243 5,692
Certificates of Deposit.......................................... 48,185 39,714
------ --------
$ 87,517 $ 64,930
========= ========
(Continued)
11
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Clarkston Financial Corporation (the "Company") is a Michigan corporation incorporated on May 18, 1998. The Company is the bank holding company for Clarkston State Bank (the "Bank"). The Bank commenced operations on January 4, 1999. The Bank is a Michigan chartered bank with depository accounts insured by the Federal Deposit Insurance Corporation. The Bank provides a full range of commercial and consumer banking services, primarily in Clarkston, Michigan and the surrounding market area primarily located in north Oakland County, Michigan. The Bank operates five customer service locations including two full service branches.
Financial Condition
Total assets of the Company increased by $27.2 million or 32.4% to $111.1 million at September 30, 2002, from $83.9 million at December 31, 2001. The increase in assets is primarily attributable to the Bank continuing to attract customer deposits. The Company anticipates that the Bank's assets will continue to increase during the fourth quarter of 2002, which is the Bank's fourth full year of operations.
Cash and cash equivalents, which include federal funds sold and short-term investments, decreased $800,000 or 13.8% to $5.0 million at September 30, 2002 from $5.8 million at December 31, 2001. The decrease is primarily the result of reinvesting cash into investments in an effort to get better utilization and additional spread income.
Securities increased $12.0 million or 28.2% to $54.5 million at September 30, 2002 from $42.5 million at December 31, 2001. The increase is the result of deposit growth and efforts to increase spread income by keeping less cash in federal funds.
Total loans increased by $15.5 million or 44.9% to $50.0 million at September 30, 2002, from $34.5 million at December 31, 2001. Management continues to cultivate current loan relationships and has actively marketed its lending territory to further increase the loan portfolio throughout the year.
The allowance for loan losses as of September 30, 2002 was $610,000, representing approximately 1.22% of total loans outstanding, compared to $419,000 as of December 31, 2001.
Deposit growth continues to be robust increasing $25.6 million or 34.5% to $99.8 million for the nine months ended September 30, 2002, from $74.2 million at December 31, 2001. The deposit growth is attributable to aggressively marketing the three new Bank offices opened in 2001.
As of December 31, 2001, the Company had an accumulated profit of $88,000 and as of September 30, 2002, the retained earnings was $583,000. The retained earnings continue to improve as the Bank has increased its net interest and non-interest income while continuing to maintain low operating expenses.
12
Results of Operations
The Company's net profit was $195,000 for the third quarter of 2002 compared to net profit of $138,000 for the third quarter of 2001. The Bank began operations in 1999 and has earned a profit every month since January, 2000. Net profit for the nine month period ended September 30, 2002 was $495,000 and included a federal income tax provision of $261,000.
Interest income for the third quarter of 2002 was $1.6 million, an increase of 23.1% from interest income of $1.3 for the third quarter of 2001. Interest income for the nine months ended September 30, 2002 was $4.5 million, an increase of 28.6% from $3.5 million for the nine months ended September 30, 2001. This increase resulted primarily from the increase in loans and securities as effective yields have either remained stable or decreased over the prior year. Interest expense was $729,000 for the three months ended September 30, 2002, an increase of 4.1% from interest expense of $700,000 for the three months ended September 30, 2001. Interest expense was $2.0 million for the nine months ended September 30, 2002, a slight increase of 5.3% from interest expense of $1.9 million for the nine months ended September 30, 2001. This rate of increase was significantly lower than the Company's increase in deposits due to declining short-term interest rates on customer deposits.
The Company had an allowance for loan losses of approximately 1.22% of total loans at September 30, 2002. The provision expense for loan loss for the three month period ended September 30, 2002, was $108,000. Management believes the current rate of providing for the loan loss reserve is adequate.
In each accounting period, management evaluates the problems and potential losses in the loan portfolio. Moreover, consideration is also given to off-balance sheet items that may involve credit risk, such as commitments to extend credit. Management's evaluation of the allowance is further based on consideration of actual loss experience, the present and prospective financial condition of borrowers, adequacy of collateral, industry concentrations within the portfolio and general economic conditions. The results of these evaluations are reflected in the allowance and periodic provision for credit losses. Please note, the Bank has no other off-balance sheet liabilities other than commitments to extend credit in the form of letters and lines of credit
The primary risk element considered by management regarding each installment and residential real estate loan is the lack of timely payments. Management has a reporting system that monitors past due loans and has adopted policies to pursue its creditor's rights in order to preserve the Bank's position. The primary risk elements concerning commercial loans are the financial condition of the borrower, the sufficiency of the collateral and lack of timely payment. Management has a policy of requesting and reviewing annual financial statements from its commercial loan customers and periodically reviews the existence and value of collateral for selected loans.
Noninterest expense was $584,000 for the third quarter of 2002, a $117,000 (or 25.1%) increase over the third quarter of 2001, the increase is primarily attributable to increases in salaries and benefits due to the increase of full time equivalents and normal raises given to employees. Noninterest expense was $1.9 million for the nine months ended September 30, 2002, an increase of $600,000 or 45.5%, over the same nine month period ended September 30, 2001. These increases are consistent with management's plans to grow the assets of the Bank as noted by the opening of several offices during 2001.
13
Liquidity and Capital Resources
Liquidity is measured by our ability to raise funds through deposits, borrowed funds, capital or cash flow from the repayment of loans and investment securities. These funds are used to meet deposit withdrawals, maintain reserve requirements, fund loans and support our operations. Liquidity is primarily achieved through the growth of deposits and liquid assets such as securities available for sale, matured securities, and federal funds sold. Asset and liability management is the process of managing our balance sheet to achieve a mix of earning assets and liabilities that maximizes profitability, while providing adequate liquidity.
Our liquidity strategy is to fund loan growth with deposits and to maintain an adequate level of short- and medium-term investments to meet typical daily loan and deposit activity. Although deposits from depositors located in our market area have consistently increased, there is no assurance that deposit growth alone will be sufficient to fund our loan growth and provide monies for additional investing activities.
Shareholders' equity is a non-interest bearing source of funds that provides support for asset growth. The Company obtained its initial equity capital in an initial public offering of its common stock in November, 1998. The Company believes it has sufficient capital for its present size, however, given the Company's growth strategy, the Company expects it may be necessary to raise additional equity capital within the next twelve months.
Forward Looking Statements
This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995, and is including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Company and the subsidiaries include, but are not limited to, changes in: interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.
14
| (a) | Evaluation of Disclosure Controls and Procedures. The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) as of a date within 90 days of the filing date of this Form 10-QSB Quarterly Report (the “Evaluation Date”), have concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company would be made known to them by others within the Company, particularly during the period in which this Form 10-QSB Quarterly Report was being prepared. |
| (b) | Changes in Internal Controls. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of the most recent evaluation, nor any significant deficiencies or material weaknesses in such internal controls requiring corrective actions. As a result, no corrective actions were taken. |
15
From time to time, we may be involved in various legal proceedings that are incidental to our business. In our opinion, we are not a party to any current legal proceedings that are material to our financial condition, either individually or in the aggregate.
None.
None.
None.
The Audit Committee of the Board of Directors approved the categories of all non-audit services performed by the company’s independent accountants during the period covered by this report
(a) Exhibits
| 99.1 | Certificate of the Chief Executive Officer of Clarkston Financial Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 99.2 | Certificate of the Chief Financial Officer of Clarkston Financial Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
(b) Reports on Form 8-K - None.
16
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Quarterly Report on Form 10-QSB for the quarter ended September 30, 2002, to be signed on its behalf by the undersigned, thereunto duly authorized.
| CLARKSTON FINANCIAL CORPORATION /s/ Edwin L. Adler Edwin L. Adler Chief Executive Officer /s/ J. Grant Smith J. Grant Smith Chief Financial Officer |
DATE: November 13, 2002
17
I, Edwin L. Adler, certify that:
| 1. | I have reviewed this quarterly report on Form 10-QSB of Clarkston Financial Corporation; |
| 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: |
| (a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; | |
| (b) | evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and | |
| (c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| (a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and | |
| (b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and |
18
| 6. | The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Date: November 13, 2002
| /s/ Edwin L. Adler Edwin L. Adler Chief Executive Officer |
19
I, J. Grant Smith, certify that:
| 1. | I have reviewed this quarterly report on Form 10-QSB of Clarkston Financial Corporation; |
| 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: |
| (a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; | |
| (b) | evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and | |
| (c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| (a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and | |
| (b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and |
20
| 6. | The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Date: November 13, 2002
| /s/J. Grant Smith J. Grant Smith Chief Financial Officer |
21
EXHIBIT INDEX
| Exhibit | Description |
| 99.1 | Certificate of the Chief Executive Officer of Clarkston Financial Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 99.2 | Certificate of the Chief Financial Officer of Clarkston Financial Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
22
I, Edwin L. Adler, Chief Executive Officer of Clarkston Financial Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2002 which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
(2) the information contained in the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2002 fairly presents, in all material respects, the financial condition and results of operations of Clarkston Financial Corporation.
Dated: November 13, 2002
| /s/ Edwin L. Adler Edwin L. Adler Chief Executive Officer |
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I, J. Grant Smith, Chief Financial Officer of Clarkston Financial Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2002 which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
(2) the information contained in the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2002 fairly presents, in all material respects, the financial condition and results of operations of Clarkston Financial Corporation.
Dated: November 13, 2002
| /s/ J. Grant Smith J. Grant Smith Chief Financial Officer |
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