The Federal Deposit Insurance Corp. has terminated its consent order against Clarkston State Bank in Michigan after the bank recapitalized with investments from private citizens and current board members and made improvements in managing its loan portfolio.

The $111 million-asset bank was put under consent order in June 2008 when its total risk-based capital ratio was 7.87%. The ratio after then dropped to 3.7% in June 2010 but the capital infusion boosted the ratio to 12.03% by the end of this year's second quarter.
"We worked diligently at satisfying the FDIC's requirements, and are now well capitalized and operationally even stronger than before," J. Grant Smith, Clarkston's president and chief executive officer said in a news release Tuesday.
Clarkston reported net income of $151,000 for the quarter that ended June 30, compared to a net loss of $348,000 for the same period a year earlier. Though its nonperforming loans increased by 13% year over year, to more than $4.4 million, its allowance for loan losses decreased by 98 basis points, to 2.58% of total loans.

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