Clarkston Financial (CKFC) in Michigan has implemented a 10-for-1 reverse stock split.

The split took place Friday morning and reduced the $119 million-asset company's outstanding stock to roughly 3.2 million shares. Clarkston's share price was $8 at the close of trading on Thursday.

"We previously raised significant common equity to improve the capitalization of the company," J. Grant Smith, the company's chief executive, said in a press release Thursday. "As a result, this reverse stock split is necessary to better align our share price with the earnings capacity of the company."

The Detroit-area company has returned to well-capitalized status since taking heavy losses on its real estate loans during the financial crisis. Its bank had a Tier 1 leverage ratio of 8.29% and a total risk-based capital ratio at 10.74% on March 31, according to the Federal Deposit Insurance Corp.

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