SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ----------------

                                   FORM 10-QSB


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999

                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

               For the transition period from _______ to ________

                             Commission file number: 333-63685

                         CLARKSTON FINANCIAL CORPORATION
        (Exact name of small business issuer as specified in its charter)

            MICHIGAN                                      38-3412321   
  (State of other jurisdiction of                      (I.R.S. Employer
  incorporation or organization)                       Identification No.)

                 15 South Main Street, Clarkston, Michigan 48346
               (Address of principal executive offices) (Zip Code)

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

                                   -----------

Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.
Yes __X__  No ______

The number of shares outstanding of each of the issuers classes of common stock,
as of the latest  practicable date: 947,800 shares of the Company's Common Stock
(no par value) were outstanding as of May 10, 1999.

Transitional Small Business Disclosure Format (check one):  Yes _____  No __X__

                                       -1-
<PAGE>
                                      INDEX




                                                                            Page
                                                                       Number(s)

Part I.     Financial Information (unaudited):

            Item 1.
            Consolidated Financial Statements                                3-6
            Notes to Consolidated Financial Statements                         7

            Item 2.
            Management's Discussion and Analysis of
            Financial Condition and Results of Operations                  11-14

Part II.    Other Information

            Item 1.
            Legal Proceedings                                                 15

            Item 2.
            Changes in Securities and Use of Proceeds                         15

            Item 3.
            Defaults Upon Senior Securities                                   15

            Item 4.
            Submission of Matters to a Vote of Securities Holders             15

            Item 5.
            Other Information                                                 15

            Item 6.
            Exhibits and Reports on Form 8-K                                  15

Signatures                                                                    16

                                       -2-
<PAGE>
Part I   Financial Information (unaudited)

                         CLARKSTON FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                March 31, 1999 (unaudited) and December 31, 1998
                             (dollars in thousands)
--------------------------------------------------------------------------------
<TABLE>
                                                                                    March 31,       December 31,
                                                                                      1999              1998       
                                                                                 -------------      -------------
                                                                                  (Unaudited)
ASSETS
<S>                                                                               <C>               <C>
Cash and Cash Equivalents:
     Total cash and due from banks                                               $       282         $      92
     Federal funds sold                                                                3,900             8,350
     Certificates of Deposit                                                           1,008                --
                                                                                       -----         ---------
       Total Cash and Cash Equivalents                                                 5,190             8,442

   Marketable securities                                                               6,371                --

   Loans, less Loan Loss Reserve:
     Total loans                                                                       1,430                --
     Allowance for loan losses                                                           (18)               --
                                                                                       -----          --------
     Net Loans                                                                         1,412                --

   Net Property and Equipment                                                            344               291
   Accrued interest receivable                                                            44                --
   Other Assets                                                                           10                --
                                                                                   ---------          --------
     Total Assets                                                                  $  13,371          $  8,733
                                                                                   =========          ========

LIABILITIES AND SHAREHOLDERS' EQUITY

   Deposits
     Noninterest-bearing                                                               1,606                --
     Interest-bearing                                                                  3,310                --
                                                                                    --------          --------
       Total deposits                                                                  4,916                --
     Accrued Expenses and Other Liabilities                                               36               126

   Shareholders' Equity
     Common stock, no par value; 10,000,000
       shares authorized, 951,000 shares
       issued and outstanding as of March 31,
       1999 and December 31, 1998                                                      4,378             4,378
     Capital surplus                                                                   4,378             4,378
     Accumulated deficit                                                                (337)             (149)
                                                                                     -------          --------
       Total Shareholder Equity                                                        8,419             8,607
                                                                                     -------          --------

       Total Liabilities and Shareholders' Equity                                    $13,371          $  8,733
                                                                                     =======          ========
</TABLE>
--------------------------------------------------------------------------------

           See accompanying notes to consolidated financial statements

                                       -3-
<PAGE>
                         CLARKSTON FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENT OF INCOME
                        Three months ended March 31, 1999
                  (dollars in thousands, except per share data)
                                   (unaudited)
--------------------------------------------------------------------------------
<TABLE>
                                                                                 Three Months
                                                                                    ended
                                                                                March 31, 1999
                                                                                 (unaudited)
<S>                                                                              <C>
   Interest Income
     Loans, including fees                                                        $      7
     Securities                                                                         58
     Federal Funds sold                                                                 66
                                                                                  --------
       Total interest income                                                           131

   Interest Expense
     Deposits                                                                           25
     Other                                                                               -
       Total interest expense                                                           25

   Net interest income                                                                 106

   Provision for loan losses                                                            18
                                                                                  --------
   Net interest income after provision for loan losses                                  88

   Noninterest income                                                                    6

   Noninterest expense
     Salaries and benefits                                                             131
     Occupancy expense of premises                                                      21
     Furniture and equipment expense                                                    20
     Computer and data processing expenses                                              36
     Advertising and Public Relations                                                   36
     Professional fees                                                                  23
     Other expense                                                                      15
                                                                                   -------
       Total noninterest expense                                                       282

   Loss before federal income tax                                                     (188)

   Federal income tax                                                                    0

   Net loss                                                                        $  (188)
                                                                                   =======

   Basic and diluted loss per share                                                $  0.20
                                                                                   =======
</TABLE>
--------------------------------------------------------------------------------

          See accompanying notes to consolidated financial statements.

                                       -4-
<PAGE>
                         CLARKSTON FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                        Three months ended March 31, 1999
                             (dollars in thousands)
                                   (unaudited)
--------------------------------------------------------------------------------
<TABLE>
                                                                                 Three Months
                                                                                    ended
                                                                                 March 31, 1999
                                                                                   (Unaudited)
<S>                                                                             <C>
Cash Flows from Operating Activities
       Net loss                                                                 $     (188)
       Adjustments to reconcile net income to net
       cash (used in) provided by operating activities:
           Increase in interest receivable                                             (44)
           Depreciation and amortization                                                17
           Increase (decrease) in accounts payable                                     (90)
           Loan loss provision                                                          18
           Increase in prepaid expenses                                                (10)
                                                                                 ---------

                  Total adjustments                                                   (109)

       Net cash used in operating activities                                          (297)

Cash Flows from Investing Activities:
       Increase in loans                                                            (1,430)
       Increase in securities                                                       (6,371)
       Equipment expenditures                                                          (70)
                                                                                 ---------
                                                                                    (7,871)
Cash Flows from Financing Activities:
       Increase in deposits                                                          4,916


Net decrease in cash and cash equivalents                                           (3,252)
Cash and cash equivalents at beginning of year                                       8,442

Cash and cash equivalents at March 31, 1999                                      $   5,190
                                                                                 =========
</TABLE>
--------------------------------------------------------------------------------

          See accompanying notes to consolidated financial statements.

                                       -5-
<PAGE>
                         CLARKSTON FINANCIAL CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                        Three months ended March 31, 1999
                             (dollars in thousands)
                                   (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
                                                                                                                 Total
                                                     Common           Capital           Accumulated           Shareholders'
                                                     Stock            Surplus             Deficit               Equity       
<S>                                                  <C>              <C>                <C>                   <C>
Balance, December 31, 1998                             $4,378          $4,378            $     (149)            $8,607

Net income (loss) for three months
ended March 31, 1999 (unaudited)                                                               (188)              (188)

                                                     --------         -------              --------            -------
Balance, March 31, 1999                                $4,738          $4,378                 ($337)            $8,419
                                                     ========         =======              =========           =======

</TABLE>




--------------------------------------------------------------------------------

          See accompanying notes to consolidated financial statements.

                                       -6-
<PAGE>
                         CLARKSTON FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                March 31, 1999 (unaudited) and December 31, 1998
--------------------------------------------------------------------------------


NOTE 1 BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information  and with the  instructions  to Form  10-QSB and
Article  10 of  Regulation  S-X.  Accordingly,  they do not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals)  considered  necessary for a fair
presentation  have been included.  Operating  results for the three month period
ended March 31, 1999, are not necessarily  indicative of the results that may be
expected for the year ended December 31, 1999. For further information, refer to
the  consolidated  financial  statements and footnotes  thereto  included in the
Company's  Proxy  Statement  dated March 5, 1999  containing  audited  financial
statements  for the  period  from  May 18,  1998  (date of  inception),  through
December 31, 1998.

NOTE 2 COMPUTATION OF EARNINGS PER SHARE

     Basic  earnings  (loss) per share is based on net income (loss)  divided by
the weighted average number of shares outstanding during the period.


NOTE 3 PRINCIPLES OF CONSOLIDATION

     The accompanying  consolidated financial statements include the accounts of
Clarkston Financial Corporation (the "Company), and its wholly-owned subsidiary,
Clarkston  State Bank (the "Bank").  All significant  intercompany  accounts and
transactions have been eliminated in consolidation.


NOTE 4 COMPARATIVE DATA

     The  Company  was  incorporated  on May 18,  1998,  and the Bank opened for
operations  on January 4, 1999.  Comparable  statements of income and cash flows
for the three  months ended March 31, 1998,  have not been  presented  since the
Company  had not been  incorporated  and did not  have  operations  during  that
period.

                                       -7-
<PAGE>
                         CLARKSTON FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                March 31, 1999 (unaudited) and December 31, 1998
--------------------------------------------------------------------------------


NOTE 5 - SECURITIES

The  amortized  cost and fair values of securities  were as follows  (dollars in
thousands):
<TABLE>
Available for Sale

                                                                       Gross              Gross
                                                     Amortized       Unrealized         Unrealized         Fair
                                                         Cost          Gains              Losses          Values
<S>                                                  <C>              <C>                 <C>             <C>
March 31, 1999 (Unaudited)
   Taxable variable rate demand
     municipal revenue bonds and
     short-term corporate
       commercial paper                              $  6,371         $      0          $       0        $ 6,371 
                                                     =========        ========          =========        =======
</TABLE>



Contractual maturities of debt securities at March 31, 1999, were as follows. No
held-to-maturity  securities existed at March 31, 1999.  Expected maturities may
differ from contractual  maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
                                                                                  Available-for-Sale Securities
                                                                                  Amortized             Fair
                                                                                    Cost               Values
                                                                                    (dollars in thousands)
     <S>                                                                       <C>                  <C>
     Due from 1999 to 2002                                                     $     6,371          $    6,371
     Due from 2003 to 2007                                                               0                   0
                                                                                ----------           ---------
                                                                               $     6,371          $    6,371
                                                                                ==========           =========
</TABLE>



--------------------------------------------------------------------------------

                                   (Continued)

                                       -8-
<PAGE>
                         CLARKSTON FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                March 31, 1999 (unaudited) and December 31, 1998
--------------------------------------------------------------------------------


   NOTE 6 - LOANS

Loans are as follows (dollars in thousands):
<TABLE>
                                                                                    March 31       December 31,
                                                                                       1999              1998        
                                                                                  (Unaudited)
     <S>                                                                           <C>              <C>
     Commercial                                                                      $   338        $     -
     Mortgage                                                                            758              -
     Consumer                                                                            334              -
                                                                                     -------        -------
                                                                                       1,430              -
     Allowance for loan losses                                                            18              -
                                                                                     $ 1,412        $     -
                                                                                     =======        =======
</TABLE>

Activity in the allowance for loan losses is as follows (dollars in thousands):
<TABLE>
                                                                                                     Period from
                                                                                    Three               May 21,
                                                                                   months          (date of inception)
                                                                                    ended              through
                                                                                  March 31,          December 31,
                                                                                     1999                1998            
                                                                                  (Unaudited)
     <S>                                                                         <C>                 <C>
     Balance at beginning of period                                               $        0         $       -
       Provision charged to operating expense                                             18                 -
                                                                                  ----------         ---------

     Balance at end of period                                                     $       18         $       -
                                                                                  ==========         =========
</TABLE>



--------------------------------------------------------------------------------

                                   (Continued)

                                       -9-
<PAGE>
                         CLARKSTON FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                March 31, 1999 (unaudited) and December 31, 1998
--------------------------------------------------------------------------------


NOTE 7 - PREMISES AND EQUIPMENT - NET

Premises and equipment are as follows (dollars in thousands):
<TABLE>
                                                                                            Accumulated        Carrying
                                                                             Cost           Depreciation         Value  
   <S>                                                                     <C>             <C>                 <C>
   March 31, 1999 (unaudited)
     Building and improvements                                             $      74       $        1         $      73
     Furniture and equipment                                                     287               16               271
                                                                           ---------       ----------         ---------
                                                                           $     361       $       17         $     344
                                                                           =========       ==========         =========

   December 31, 1998
     Building and improvements                                             $      59       $        0         $      59
     Furniture and equipment                                                     232                0               232
                                                                           ---------       ----------         ---------
                                                                           $     291       $        0         $     291
                                                                           =========       ==========         =========
</TABLE>


NOTE 8 - DEPOSITS

Deposits are summarized as follows (dollars in thousands):
<TABLE>
                                                                                            March 31,      December 31,
                                                                                              1999            1998
   <S>                                                                                     <C>              <C>  
   Demand deposit accounts                                                                 $    1,606        $       -
   Money market accounts                                                                        1,172                -
   Savings accounts                                                                               723                -
   Certificates of deposit                                                                      1,415                -
                                                                                           ----------        ---------

                                                                                           $    4,916        $       -
                                                                                           ==========        =========
</TABLE>

--------------------------------------------------------------------------------

                                   (Continued)

                                      -10-
<PAGE>
Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

General

     Clarkston Financial  Corporation (the "Company") is a Michigan  corporation
and was  incorporated  on May 18, 1998. The Company is the bank holding  company
for Clarkston State Bank (the "Bank").  The Bank commenced operations on January
4, 1999. The Bank is a Michigan chartered bank with depository  accounts insured
by the Federal Deposit Insurance Corporation.  The Bank provides a full range of
commercial and consumer banking services,  primarily in Clarkston,  Michigan and
the surrounding market area primarily located in north Oakland County, Michigan.

     The Company's plan of operation has been to establish its  management  team
within the first few months of its operations.  Management  believes that it has
been successful in  establishing  its management team and that it can administer
the Company's growth.

     On April 6, 1999,  the Bank entered into an agreement  with The State Bank,
Fenton,   Michigan,  to  acquire  certain  assets  and  assume  certain  deposit
liabilities  with  respect  to The State  Bank's  branch  office  located in the
Foodtown  grocery store at 6555 Sashabaw  Road,  Clarkston,  Michigan.  The Bank
expects  to add  approximately  $2.9  million  in  deposits  as a result  of the
transaction. The transaction is subject to regulatory approvals. If approved, it
is expected that the transaction will be completed during the summer of 1999.

Financial Condition

     Total  assets of the  Company  increased  by $4.6  million  or 53% to $13.4
million at March 31, 1999,  from $8.7 million at December 31, 1998. The increase
in assets is primarily  attributable to the Bank continuing to attract  customer
deposits.  The first  quarter of 1999 was the  Company's  first full  quarter of
operations,  and the number of deposit accounts  increased from none at December
31, 1998,  to 491 deposit  accounts at March 31, 1999.  The Company  anticipates
that the Bank's assets will continue to increase during 1999,  which will be the
Bank's first full year of operations.

     Cash and cash equivalents, which includes federal funds sold and short-term
investments,  decreased  $3.2  million or 38% to $5.2 million at March 31, 1999,
from $8.4  million at  December  31,  1998.  The  decrease  is the result of the
increase in the investment and loan portfolios since December 31, 1998.

     Securities  available  for sale  increased  $6.4 million to $6.4 million at
March 31, 1999 from $0 at December 31,  1998.  The increase is the result of the
investment of customer deposits that have been obtained since December 31, 1998,
and also the  purchase of  securities  using cash  generated  by a reduction  in
federal funds sold.

     The   allowance  for  loan  losses  as  of  March  31,  1999  was  $18,000,
representing approximately 1.25% of total loans outstanding, compared to no loan
loss  reserves at December 31,  1998,  at which time the Bank had not yet opened
for business.  Clarkston  Financial  Corporation  has not experienced any credit
losses as of March 31, 1999.

     Bank  premises  and  equipment  increased  by $53,000 or 18% to $344,000 at
March 31, 1999 from  $291,000 at December  31, 1998.  The increase  included the
purchase of an ATM machine and related  software,  an automobile  for the Bank's
courier, additional printers, and other miscellaneous items.

                                      -11-
<PAGE>
Results of Operations

     The net loss for the three month period ended March 31, 1999, was $188,000.
As of December 31, 1998, the Company had a retained deficit of $149,000,  and as
of March 31, 1999, the Company had a retained deficit of $337,000.  The retained
deficit and net losses are  primarily  the result of costs of opening the Bank's
office,  wages paid to employees,  and fees and expenses incurred in forming the
Company and applying for regulatory approvals.  Significant ongoing additions to
loan  loss  reserves  will  also  contribute  to net  losses in 1999 as the Bank
increases its loan portfolio. Management believes that the Company will generate
a net loss for 1999 as a result of  expenditures  made to build  its  management
team and open its main office, together with the time needed to more effectively
utilize  its  capital  and  generate  loan  interest  and fee  income  by making
additional  loans.  Management  believes that the expenditures  made in 1998 and
1999 will create the infrastructure and lay the foundation for future growth and
profitability in subsequent years.

     Interest  income was  $131,000  for the three month  period ended March 31,
1999,  consisting  primarily of interest income on federal funds and securities.
Interest  expense was $25,000  for the three month  period  ended March 31, 1999
related to interest incurred on interest bearing deposits.

     The Company has an  allowance  for loan  losses of  approximately  1.25% of
total loans at March 31, 1999. The provision for loan losses for the three month
period  ended  March 31, 1999 was  $18,000.  This amount is expected to increase
substantially  in 1999 as a result of  anticipated  increases  in the total loan
portfolio.  Management  believes  the current  rate of  providing  for loan loss
reserve is adequate.

     In each accounting period,  management evaluates the problems and potential
losses in the loan portfolio.  Consideration is also given to off-balance  sheet
items that may  involve  credit  risk,  such as  commitments  to extend  credit.
Management's  evaluation of the allowance is further based on  consideration  of
actual loss  experience,  the present and  prospective  financial  condition  of
borrowers, adequacy of collateral, industry concentrations within the portfolio,
and general economic conditions.  The results of these evaluations are reflected
in the allowance and periodic provision for credit losses.

     The  primary  risk  element   considered  by  management   regarding   each
installment  and  residential  real estate  loan is the lack of timely  payment.
Management  has a reporting  system that monitors past due loans and has adopted
policies  to pursue  its  creditor's  rights  in order to  preserve  the  Bank's
position.  The  primary  risk  elements  concerning  commercial  loans  are  the
financial condition of the borrower, the sufficiency of the collateral, and lack
of timely  payment.  Management has a policy of requesting and reviewing  annual
financial  statements  from its  commercial  loan  customers,  and  periodically
reviews existence of collateral and value for selected loans.

     Other  income of $6,000 for the three  month  period  ended  March 31, 1999
consisted of income from deposit service charges and other miscellaneous fees.

     The main components of other expenses were primarily salaries and benefits.
Other  expense for the three  month  period  ended March 31, 1999 was  $151,000,
consisting  primarily of occupancy and equipment expenses,  legal and accounting
fees, marketing expenses, insurance and supplies.

Liquidity and Capital Resources

     The  Company  obtained  its  initial  equity  capital in an initial  public
offering of its common stock to investors in November,  1998. The Company's plan
of operation for the next twelve months does not  contemplate  the need to raise
additional  capital  during that period.  Management  believes  that its current
capital and liquidity will provide the Company with adequate  capital to support
its expected level of deposit and loan growth and to otherwise meet its cash and
capital requirements for at least the next two or three years.

                                      -12-
<PAGE>
Year 2000 Compliance

     Because many computerized systems use only two digits to record the year in
date fields (for example, the year 1998 is recorded as 98), such systems may not
be able to  accurately  process  dates  ending in the year 2000 and  after.  The
effects of the issue will vary from  system to system and may  adversely  affect
the ability of a financial  institution's  operations  as well as its ability to
prepare  financial  statements.  The Company and the Bank were organized in 1998
and the Company  acquired its computer  equipment  within the past twelve months
and has contracted with a leading supplier of information  processing  services.
This equipment and these  services were  purchased with  assurances of Year 2000
compliance.

     Company management has developed a comprehensive Year 2000 Compliance Plan.
The  Company  has  procedures  in place to assess  Year 2000  compliance  by the
Company and its vendors. In addition,  the Bank asks commercial  borrowers about
Year 2000 compliance as part of the loan application and review process.

     To date,  the Company has spent less than $20,000 on Year 2000  compliance.
Management  believes that the  additional  costs to complete the Company's  Year
2000 compliance will be minimal.

     The  Company  presently  anticipates  that it will  complete  its Year 2000
assessment and any necessary  remediation by December 31, 1999.  However,  there
can be no assurance that the Company will be successful in implementing its Year
2000 remediation plan according to the anticipated  schedule.  In addition,  the
Company may be  adversely  affected by the  inability of other  companies  whose
systems interact with the Company to become Year 2000 compliant.

     The Bank's  core  processing  applications  are  provided  by a third party
vendor, Jack Henry and Associates,  Inc. The Company has received correspondence
from Jack Henry and  Associates,  Inc. which  documents the status of their Year
2000  compliance.  The  Company  has  been  advised  that  the  Jack  Henry  and
Associates, Inc. software has been successfully tested for Year 2000 compliance.

     Although the Company expects its internal systems to be Year 2000 compliant
as described  above,  the Company is in the process of  preparing a  contingency
plan that will  specify  what it plans to do if  important  internal or external
systems are not Year 2000 compliant in a timely manner.

     Management  does  not  anticipate  that the  Company  will  incur  material
operating  expenses  or  be  required  to  invest  heavily  in  computer  system
improvements  to be Year 2000  compliant.  Nevertheless,  the  inability  of the
Company to successfully  address Year 2000 issues could result in  interruptions
in the Company's  business and have a material  adverse  effect on the Company's
results of operations.

Recent Regulatory Developments

     Various  bills have been  introduced  in the Congress that would allow bank
holding companies to engage in a wider range of nonbanking activities, including
greater  authority to engage in securities and insurance  activities.  While the
scope of permissible  nonbanking  activities and the conditions  under which the
new powers  could be  exercised  varies  among the bills,  the  expanded  powers
generally  would be available to a bank holding company only if the bank holding
company and its bank subsidiaries remain well- capitalized and well-managed. The
bills also impose various  restrictions on  transactions  between the depository
institution   subsidiaries   of  bank  holding   companies  and  their  non-bank
affiliates.   These   restrictions   are  intended  to  protect  the  depository
institutions from the risks of the new nonbanking  activities  permitted to such
affiliates.  At this time,  the Company is unable to predict  whether any of the
pending  bills will be enacted and,  therefore,  is unable to predict the impact
such legislation may have on the operations of the Company and the Bank.

                                      -13-
<PAGE>
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

     This report contains certain forward-looking  statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.   The  Company  intends  such
forward-looking  statements  to be covered  by the safe  harbor  provisions  for
forward-looking  statements  contained in the Private  Securities  Reform Act of
1995,  and is  including  this  statement  for  purposes  of these  safe  harbor
provisions.  Forward-looking statements,  which are based on certain assumptions
and describe  future plans,  strategies  and  expectations  of the Company,  are
generally  identifiable  by use  of the  words  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate,"  "project"  or  similar  expressions.  The  Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain.  Factors which could have a material adverse affect on the
operations and future prospects of the Company and the subsidiaries include, but
are not limited to, changes in: interest  rates,  general  economic  conditions,
legislative/regulatory  changes,  monetary  and  fiscal  policies  of  the  U.S.
Government,  including  policies of the U.S.  Treasury  and the Federal  Reserve
Board, the quality or composition of the loan or investment  portfolios,  demand
for loan products, deposit flows, competition,  demand for financial services in
the Company's  market area and accounting  principles,  policies and guidelines.
These risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such  statements.  Further
information  concerning  the  Company  and its  business,  including  additional
factors  that  could  materially  affect the  Company's  financial  results,  is
included in the Company's filings with the Securities and Exchange Commission.


                                      -14-
<PAGE>
PART II - OTHER INFORMATION


Item 1.   Legal Proceedings.

None.


Item 2.   Changes in Securities and Use of Proceeds.

None.


Item 3.   Defaults Upon Senior Securities.

None.


Item 4.   Submission of Matters to a Vote of Securities Holders.

None.

Item 5.   Other Information.

None.


Item 6.  Exhibits and Reports on Form 8-K.

    (a)  Exhibits -

         27     Financial Data Schedule
                (EDGAR version only)

    (b) Reports on Form 8-K - None.


                                      -15-
<PAGE>
                                   SIGNATURES

     In accordance with the requirements of the Securities Exchange Act of 1934,
as amended,  the Registrant has duly caused this Quarterly Report on Form 10-QSB
for the  quarter  ended  March  31,  1999,  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.



                              CLARKSTON FINANCIAL CORPORATION



                              /s/ David T. Harrison 
                              David T. Harrison
                              President and Chief Executive Officer


                              /s/ James L. Richardson          
                              James L. Richardson
                              Treasurer


DATE:     May 14, 1999

                                      -16-


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