8-K

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: October 19, 2007

CLARKSTON FINANCIAL CORPORATION
(Exact name of registrant as
specified in its charter)

Michigan
(State or Other
jurisdiction of
incorporation) 333-63685
(Commission
File Number) 38-3412321
(IRS Employer
Identification No.)

6600 Highland Road, Suite 24
Waterford, Michigan
(Address of principal executive office) 48327
(Zip Code)

Registrant’s telephone number,
including area code: (248) 625-8585

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[_]      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
[_]      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
[_]      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).
[_]      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Item 2.02.      Results of Operations and Financial Condition.

On October 19, 2007, Clarkston Financial Corporation issued a press release announcing results for the third quarter ended September 30, 2007. A copy of the press release is attached as Exhibit 99.1.

The information in this Form 8-K and the attached Exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.      Financial Statements and Exhibits.

Exhibit

99.1 Press release dated October 19, 2007.

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: October 19, 2007 CLARKSTON FINANCIAL CORPORATION
(Registrant)


Bt: /s/ James W. Distelrath
      ——————————————
      James W. Distelrath
      Chief Financial Officer

EX-99

Exhibit 99.1

Contact:    Clarkston Financial Corp. - J. Grant Smith, President and COO, 248 922-6945
                   Marcotte Financial Relations - Mike Marcotte, 248 656-3873

Clarkston Financial Corporation
Reports Q3 & 9-Month Results
For Immediate Release

CLARKSTON, Mich., Oct. 19, 2007 — Clarkston Financial Corporation (OTCBB: CKSB), the holding company for Clarkston State Bank and Huron Valley State Bank, says its results for the third quarter and nine months ended September 30, 2007 were adversely affected by increased provisions for possible loan losses and lower net interest income. Edwin L. Adler, Board Chairman and CEO, and J. Grant Smith, President and Chief Operating Officer, jointly announced today.

Third-quarter results
Total revenues — net interest income plus noninterest income — were $1,666,000, compared with total revenues of $1,935,000, for the year-earlier quarter. The 13.9% decline chiefly reflects a 16.3% slip in net interest income. The reduction in net interest income is attributable to margin compression, nonperforming loans and slowed loan growth. The provision for the quarter was $2,561,000, compared with $269,000 for the third quarter of 2006. The increase results from Michigan’s difficult economy, weak housing and real-estate markets, and an increase in nonperforming loans, especially real estate loans. The net loss for the quarter was $1,642,000, equivalent to $1.28 per diluted share. This contrasts with net income of $105,000, or $0.08 per diluted share, for Q3-2006.

Net charge-offs for the quarter totaled $1,529,000, a contrast to a recovery of $226,000 a year ago. Nonperforming loans were 3.7% of total loans at quarter’s end, compared with 1.5% at midyear, 2.1% at the end of Q1-2007 and 1.6% at the close of Q3-2006.

Nine-month results
For the first nine months of 2007, total revenues were $5,462,000, comparable to total revenues of $5,535,000 for the first nine months of 2006. Net interest income was off 3% from fractionally higher cost of funds. Aided by higher bank service charges and fees, non-interest income rose 10% to $823,000, from $747,000 for the year-earlier period. The net loss for the first nine months was $1,464,000, or $1.15 per diluted share. The net loss for the first nine months of 2006 was $447,000, or $0.35 per diluted share. The 2007 results include a provision for possible loan loss of $2,638,000, versus a provision of $1,635,000 a year ago.

Mr.     Smith said: “We continue to work very hard to address the credit quality issues within the commercial lending department at Clarkston State Bank. However, the poor economic environment continues to put further pressure on our borrowers, which has resulted in more non-performing loans. In addition to working through some of our older problem credits, we are aggressively addressing challenges from the sharp downturn in the housing and real estate sectors. While we have no exposure to subprime mortgages, we are working through several stalled real estate projects. On a positive note, we are beginning to see improvement in loan demand at both Clarkston State Bank and Huron Valley State Bank. Huron Valley State Bank has moved to its new headquarters branch building in Milford and this has assisted in increased loan and deposit business.”

More

Clarkston Financial Corp.
Q3 & 9-month 2007 results
Page 2

Mr.     Adler added, “Our results are disappointing. We are facing strong headwinds. The feeble economy and abysmal real-estate sector are significantly impairing the market in Southeast Michigan. We have watched virtually all banks in Southeast Michigan report poor operating results in recent quarters. We have adjusted our organization to the realities of the marketplace. We have the right people and products. We’re well positioned in an otherwise strong market. We are hopeful that the business climate in the markets that we serve will improve in the months and year ahead. We have the resolve to persevere and we sincerely hope our shareholders share our belief and vision.”

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 context of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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 regulations; 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 free online via EDGAR at SEC.GOV. The Corporation assumes no responsibility to update forward-looking statements.

More
(financial schedules follow)

CLARKSTON FINANCIAL CORPORATION
Historical Balance Sheet Data
000's omitted

	Unaudited						Unaudited
	Sep 2007			Jun 2007			Dec 2006			Sep 2006
Total Assets	$	203,703		$	206,767		$	220,378		$	218,878
Loans HFS		645			348			120			577
Total Portfolio Loans		148,483			150,683			157,715			152,195
Loan Loss Reserve		(2,766	)		(1,733	)		(2,750	)		(2,055	)
Non-accrual Loans		5,352			2,216			2,431			1,676
Loans 90 days + Still Accruing		199			113			855			718
Total Non-performing Loans		5,551			2,329			3,286			2,394
Repossessed Assets		555			584			3			16
Total Securities		37,372			38,879			43,864			47,324
Premises/Furniture & Fixtures		7,227			6,505			4,730			4,764
Noninterest-bearing Deposits		24,401			24,085			23,922			22,554
Interest bearing Deposits		147,041			145,249			158,119			159,746
Total Deposits		171,442			169,334			182,041			182,300
CD's>$100K		46,247			45,884			51,961			53,538
Trust Preferred		4,000			4,000			4,000			4,000
Advances from FHLB		10,700			12,200			15,200			10,200
Common Equity		13,553			14,749			14,766			14,573
Common Shares Outstanding at End of Period		1,274			1,274			1,262			1,246
Goodwill/Intangibles		0			0			0			0

CLARKSTON FINANCIAL CORPORATION
Historical Income Statement Data
000's omitted

	Unaudited									Unaudited
	Three Months Ended Sep 2007			Three Months Ended Jun 2007			Three Months Ended Sep 2006			Nine Months Ended Sep 2007			Nine Months Ended Sep 2006
Total Interest Income	$	3,211		$	3,446		$	3,465		$	10,182		$	9,701
Interest Expense		1,805			1,833			1,786			5,543			4,913
Net Interest Income		1,406			1,613			1,679			4,639			4,788
Provision for Loan Losses		2,561			60			269			2,638			1,635
Security Gains/(Losses)		0			0			0			(2	)		3
Gain on loan sales		50			84			82			196			200
Service fees on loan and deposit accounts		198			195			183			600			557
Other Income		12			10			(9	)		29			(13	)
Total Other Income		260			289			256			823			747
Salary & Benefit Expense		783			1,004			808			2,754			2,438
Occupancy Expense		212			233			259			658			793
Other Expense		680			574			474			1,857			1,505
Total Other Expense		1,675			1,811			1,541			5,269			4,734
EBIT		(2,570	)		31			125			(2,445	)		(834	)
Tax		(873	)		51			86			(785	)		(194	)
Minority Interest		(55	)		(67	)		(66	)		(196	)		(193	)
Net Income	$	(1,642	)	$	47		$	105		$	(1,464	)	$	(447	)
Reported EPS (diluted)	$	(1.28	)	$	0.04		$	0.08		$	(1.15	)	$	(0.35	)
Dividends Per Share		0			0			0			0			0
Selected Financial Ratios:
Total Risk Based Capital		12.06	%		12.72	%		12.38	%		12.06	%		12.38	%
Return on Average Assets		-3.16	%		0.09	%		0.21	%		-0.93	%		-0.29	%
Return on Average Equity		-43.87	%		1.26	%		2.84	%		-13.18	%		-4.07	%
Non Interest Margin		2.87	%		3.21	%		3.26	%		3.08	%		3.24	%
Average Assets		206,139			211,227			203,546			211,455			205,306
Net charge-offs ($)		1,529			920			(226	)		2,622			1,510
Gross charge-offs ($)		1,542			965			17			3,034			1,783