Source: Sherman Publications

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Things looking up for Clarkston State Bank

by Don Rush

September 14, 2011

Grant Smith, president and CEO of Claktson State Bank has successsfully guided the local institution to financial stability. Photo by D. Rush
It wasn't too long ago rumors were running rampant on Main Street: Clarkston State Bank was going out business.

While those rumors were not true, there was a time when federal and state regulators had slapped a consent order on Clarkston State Bank and 11 other community banks across Michigan.

"We were the first to be released from the consent orders," bank president and CEO Grant Smith said. "And, while we were never in any immediate danger of closing, it wasn't good."

Smith said in June of 2008 the FDIC put the dozen community banks on notice that they were on the troubled list. He said CSB had to satisfy 21 points of concern.

In short, the community banks suffered from bad loans during the economic tsunami that swept in, just like the rest of the country. Smith, who started with the bank in 2001 and became president/CEO in January 2008, said the bank board recognized the financial storm that was brewing during the later part of 2005.

"To our credit, we started the procedures then and were able to turn the corner sooner than other banks," he said. "To the board's credit, they didn't do a lot of finger pointing. Everybody was committed to following the plan. Our motivation was simple. Failure was not an option. Failure was never discussed at board meetings. And, each quarter we were always able to make a little progress."

Some of the banks that were put on notice back in 2008 are now out of business

Under his direction, Clarkston State Bank has downsized assets, investors, reorganized staff and raised more capital. In the middle of August, the bank received word it was no longer on the list.

"We still have work to do," Smith said, "And we will aggressively work towards our goals."

Smith believes in community banking. He says community banks are "the lifeblood of many communities" because they offer loans to small businesses. "We want to reinvest into the local economy," he said.

As the bank moves forward, they are looking for other "good" locations for the bank to operate. "We are looking to grow the bank and rebuild our portfolio and reposition ourselves for 2012."

He also expressed his gratitude to the community, investors and 30-plus employees. "They hung in there with us. Our staff heard the rumors. It wasn't easy for them, so I am very appreciative."

Clarkston State Bank was started on Jan. 3, 1999, when local investors decided the community needed a bank. They took over the building that National Bank of Detroit had moth-balled location on S. Main Street in 1997. Ironically, the bank's current downtown home is the location of the first Clarkston State Bank which opened in 1911.

The bank currently has $113 million in assets. At it's high-point, Smith said the bank's assets total roughly $192 million.