Clarkston Financial (CKSB) 8-K Results of Operations and Financial Condition

Clarkston Financial Corp.
Reports Turnaround Plan is Working

[ PR Newswire  ·  2007-08-01 ]

Q2/6-Month Results and Profitability Improve

CLARKSTON, Mich., Aug. 1 /PRNewswire-FirstCall/ – Clarkston Financial Corporation (OTC Bulletin Board: CKSB), the holding company for Clarkston State Bank and Huron Valley State Bank, says its turnaround plan is working. Results for the second quarter and first half of 2007 showed marked improvement over comparable year-earlier periods. Total revenues for both reporting periods were modestly higher, while nonperforming assets and the loan loss provision were noticeably lower.

Q2 Results

Total revenues for the second quarter of 2007 were $1,902,000, compared with total revenues of $1,826,000 for Q2-2006. Net income was $47,000, or $0.04 per diluted share, a substantial improvement from the year-earlier net loss of $198,000, or $0.16 per diluted share. The improvement reflects higher net interest income and noninterest income, a reduction in the loan loss provision, and successful cost controls. Total nonperforming loans decreased 11.4% to $2,329,000, from $2,630,000 during the quarter.

6-Month Results

At midyear 2007, total revenues were $3,797,000, up slightly from total revenues of $3,602,000 for the first half of 2006. Net income was $180,000, or $0.14 per diluted share, in contrast to the year-earlier net loss of $552,000, or $0.44 per diluted share. Net interest and noninterest income rose and the provision for loan losses fell approximately 95%. Total nonperforming loans decreased 29.1% from year end 2006 when nonperforming loans were $3,286,000.

“Our results are encouraging despite the poor economic conditions. We have improved revenues and successfully reduced nonperforming loans for both quarters of 2007. We obviously are still not at the performance level we expect, however, we are making great strides within our operations and are optimistic about our future,” J. Grant Smith, President and COO, said.

Edwin L. Adler, Board Chairman, added, “The past two years have been challenging and difficult for our board members, our staff, and our shareholders. Nonetheless, we can restore investor confidence and move beyond the current challenges to resume our position as a preferred financial institution across all the markets that we serve.”

Clarkston Financial Corporation is the holding company for Clarkston State Bank and Huron Valley State Bank. Clarkston State Bank opened in January 1999 and operates five branches and one loan center in Clarkston, Waterford, and Independence Township. Huron Valley State Bank opened in August 2005. Clarkston Financial Corporation owns 55% of the 820,000 common shares outstanding, with Milford-area investors owning the balance.

Safe Harbor. This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which 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 regulation; 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; changes in the national and local economy; and other factors included in the Corporation’s filings with the Securities and Exchange Commission, available via EDGAR. The Corporation assumes no responsibility to update forward-looking statements.

CLARKSTON FINANCIAL CORPORATION
Historical Income Statement Data
000‘s omitted

	Unaudited									Unaudited
	Three Months Ended Jun 2007			Three Months Ended Mar 2007			Three Months Ended Jun 2006			Six Months Ended Jun 2007			Six Months Ended Jun 2006
Total Interest Income	$	3,446		$	3,525		$	3,242		$	6,970		$	6,237
Interest Expense		1,833			1,905			1,660			3,738			3,127
Net Interest Income		1,613			1,620			1,582			3,232			3,110
Provision for Loan Losses		60			17			534			77			1,366
Security Gains/(Losses)		0			(2	)		0			(2	)		3
Gain on loan sales		84			62			81			147			119
Service fees on loan and
Deposit accounts		195			207			166			402			373
Other Income		10			6			(3	)		18			(3	)
Total Other Income		289			273			244			565			492
Salary & Benefit Expense		1,004			967			839			1,971			1,630
Occupancy Expense		233			212			280			446			534
Other Expense		574			603			543			1,175			1,031
Total Other Expense		1,811			1,782			1,662			3,592			3,195
EBIT		31			94			(370	)		128			(959	)
Tax		51			37			(113	)		88			(280	)
Minority Interest		(67	)		(73	)		(59	)		(140	)		(127	)
Net Income	$	47		$	130		$	(198	)	$	180		$	(552	)
Reported EPS (diluted)	$	0.04		$	0.10		$	(0.16	)	$	0.14		$	(0.44	)
Dividends Per Share		0			0			0			0			0
Selected Financial Ratios:
Total Risk Based Capital		12.73	%		12.51	%		13.09	%		12.73	%		13.09	%
Return on Average Assets		0.09	%		0.24	%		-0.38	%		0.17	%		-0.55	%
Return on Average Equity		1.26	%		3.58	%		-5.50	%		2.44	%		-7.53	%
Net Interest Margin		3.21	%		3.14	%		3.20	%		3.18	%		3.23	%
Average Assets		211,227			217,000			207,855			214,113			203,388
Net charge-offs ($)		920			174			1,092			1,094			1,736
Gross charge-offs ($)		965			526			1,115			1,491			1,766

CLARKSTON FINANCIAL CORPORATION
Historical Balance Sheet Data
000‘s omitted

	(Unaudited)						(Unaudited)
	Jun 2007			Mar 2007			Dec 2006			Jun 2006
Total Assets	$	206,767		$	213,763		$	220,378		$	211,221
Loans HFS		348			969			120			217
Total Portfolio Loans		150,683			154,887			157,715			140,601
Loan Loss Reserve		(1,733	)		(2,593	)		(2,750	)		(1,560	)
Non-accrual Loans		2,216			2,505			2,431			916
Loans 90 days + Still Accruing		113			125			855			491
Total Non-performing Loans		2,329			2,630			3,286			1,407
Repossessed Assets		584			452			3			182
Total Securities		38,879			41,455			43,864			48,009
Premises/Furniture & Fixtures		6,505			6,292			4,730			4,824
Noninterest-bearing Deposits		24,085			20,928			23,922			27,157
Interest bearing Deposits		145,249			154,198			158,119			151,891
Total Deposits		169,334			175,126			182,041			179,048
CD's>$100K		45,884			49,889			51,961			48,230
Trust Preferred		4,000			4,000			4,000			4,000
Advances from FHLB		12,200			15,200			15,200			10,200
Common Equity		14,749			15,006			14,766			13,984
Common Shares Outstanding at
End of Period		1,274			1,262			1,262			1,246
Goodwill/Intangibles		0			0			0			2