Yesterday, Clarkston Financial Corporation, the holding company for Clarkston State Bank, reported operating results for the second quarter ended June 30, 2010.

Total revenues for the first quarter (net interest income plus noninterest income) were $1,103,000, compared with total revenues of $1,176,000 for Q2 2009. For the six months ended June 30, 2010, total revenues were $2,251,000, compared to $2,653,000 for the six months ended 2009.

Net interest income was lower as a direct result of reducing the size of the balance sheet. Earning assets declined; however, interest-bearing liabilities declined at a more rapid rate. This resulted in a stronger net interest margin. With nonaccrual loans continuing to decline, Clarkston Financial Corporation expects the net interest margin to continue to improve.

The net loss for the second quarter was $348,000, or ($0.16) per diluted share. This is in comparison to a net loss of $766,000, or ($0.52) per diluted share, for Quarter 2 of 2009. For the six months, the net loss was $615,000, or ($0.28) per diluted share. This represents a slight improvement over the net loss of $684,000, or ($0.47) per diluted share for the six months ended 2009.

J. Grant Smith, Clarkston Financial Corporation’s Chief Executive Officer, said, “The focus remains on strengthening our asset quality and finalizing our recapitalization plan. We are working closely with our regulatory partners to finalize approvals which we expect to complete in the third quarter. In the meantime, we continue to maintain excellent liquidity while we focus on improving our core profitability as evidenced by the significant improvement in our net interest margin. On the asset quality front, our nonaccrual loans continue to decline and we have maintained our accruing loan delinquency for loans 30-89 days past due at less than peer levels for six consecutive months. Total delinquency continues to decline as well and is very near peer levels. We will continue to follow our turnaround plan until we have achieved our goals which are now clearly attainable.”

Clarkston State Bank provides commercial and consumer banking products and services in Michigan. They operate four branches in Clarkston, Waterford, and Independence Township. Clarkston State Bank opened in January 1999.

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