Contacts:
Community Central Bank Corp. – Ray Colonius - P:586 783-4500
| COMMUNITY CENTRAL BANK CORPORATION | |
| ANNOUNCES PROFITABLE Q3 RESULTS | For Immediate Release |
MOUNT CLEMENS, Mich., October 31, 2008 -- Community Central Bank Corporation (NasdaqGM:CCBD), the holding company for Community Central Bank, today reported earnings for the quarter ended September 30, 2008. Net income for the third quarter of 2008 was $104,000, or $0.03 per diluted share, compared to $597,000, or $0.16 per diluted share, for the third quarter ended 2007. Net income for the nine months ended September 30, 2008 was $619,000, or $0.17 per diluted share, compared to net income of $1,791,000, or $0.46 per diluted share, for the nine months ended September 30, 2007.
David A. Widlak, President and CEO commented, “We continue to center on those activities which grow revenue and increase our bank capital. Our focus continues to be directed at development of our deposit base, diversification of revenue and a reduction in nonperforming assets. At September 30, 2008, we remained “Well Capitalized,” the highest regulatory capital level. We remain vigilant in our current economic environment and aware of the challenges at hand as we continue our efforts to stem the increase and ultimately reduce current levels of nonperforming assets and strengthen the core operations of the Bank. While earnings continue to be pressured by the tough Michigan economy, our strategy is to diversify revenue and maintain capital at the Bank and Holding Company.”
Total deposits increased $32.4 million for the first nine months of 2008, with $11.2 million occurring in noninterest bearing demand deposits. Despite the competitive rate environment for deposits and a higher than anticipated cost of funds, we did improve net interest margin over the previous quarterly period. Net interest margin, on a fully tax-equivalent basis, was 2.36% for the three months ended September 30, 2008, up from 2.28% for the prior quarter ended June 30, 2008, but down from 2.83% for the three months ended September 30, 2007.
The Corporation recorded a $1.1 million provision for loan losses in the third quarter of 2008, based upon management’s review of the risks inherent in the loan portfolio and the level of our allowance for loan losses. Total nonperforming assets (which include nonaccruing loans, accruing loans 90 days or more past due, troubled debt restructured loans and foreclosed assets) as a percentage of total assets was 5.00% at September 30, 2008, compared to 4.20% at June 30, 2008 and 3.61% at December 31, 2007. The allowance for loan losses at September 30, 2008, was $7.8 million, or 1.96% of total loans and 30.59% of nonperforming loans (which includes nonaccruing loans, accruing loans 90 days or more past due and troubled debt restructured loans) versus $6.4 million, or 1.64% and 35.70% at December 31, 2007, respectively. Net loan charge offs on an annualized basis totaled 91 basis points for the first nine months of 2008 versus 28 basis points for the first nine months of 2007. Total year to date net loan charge offs were $2.7 million in 2008 versus $771,000 in 2007. On a positive note, we recorded $271,000 in recoveries for the first nine months of 2008 versus $45,000 for the first nine months of 2007.
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Community Central Bank Corp. – 2
Noninterest income was $2.1 million for the third quarter of 2008, increasing $260,000, or 14.2%, from the third quarter of 2007. The increase was primarily related to a net increase in the fair market value of assets and liabilities as measured under Statement of Financial Accounting Standards (SFAS 159). The increase was largely attributable to the fair value of the subordinated debenture connected with the February 2007 Trust Preferred Issuance. The net change in fair value which was largely associated with this instrument and the corresponding interest rate swap totaled $1.1 million in unrealized gains for the third quarter of 2008, as recorded in other income. The widening of market credit spreads for trust preferred securities experienced in the third quarter of 2008 dramatically increased the relative fair value of this financial liability. The Corporation hedges against changes in interest rates with an interest rate swap, which is also accounted for under SFAS 159. The hedge does not cover changes in credit spreads, which typically occur over much longer periods of time than we are currently experiencing. Changes in credit spreads are not easily predictable and may cause adverse changes in the fair value of this instrument and a possible loss of income in the future. Noninterest income was $7.5 million for the first nine months of 2008, increasing $3.1 million, or 69.5%, from the first nine months of 2007. The increase was largely attributable to the aforementioned net change in fair value of the subordinated debenture over the nine month period.
Noninterest expense was $3.9 million for the third quarter of 2008, increasing $392,000 or 11.2% from the third quarter of 2007. Decreases in salaries and benefits of $97,000, or 4.9%, from staffing reductions were offset by an increase in other expense of $472,000 or 43.8%. These other expenses included valuation charges incurred on foreclosed property and legal expense on loan workouts. Noninterest expense was $11.2 million for the first nine months of 2008, increasing $841,000 or 8.1% from the third quarter of 2007, again resulting from increases in valuation costs incurred on foreclosed property and other workout related costs which exceeded cost-savings achieved in other expense areas.
At September 30, 2008, the Corporation’s total assets were $552.9 million, an increase of $32.6 million from December 31, 2007. Total loans of $398.2 million increased slightly, up $8.3 million, or 2.1%, from December 31, 2007. Increases in commercial loans were partially offset by decreases in all other loan categories. Total deposits of $361.0 million increased $32.4 million, or 9.9%, for the first nine months of 2008. Increases for the first nine months were primarily comprised of noninterest bearing demand deposits of $11.2 million, savings and interest bearing checking of $7.6 million and time deposits of $13.6 million. Total stockholders’ equity of $33.5 million increased slightly from $33.2 million at December 31, 2007 as increases in retained earnings were offset by year to date cash dividends and decreases in accumulated other comprehensive income as a result of changes in the market value of available for sale securities.
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Community Central Bank Corp. – 3
Community Central Bank Corporation is the holding company for Community Central Bank in Mount Clemens, Michigan. The Bank opened for business in October 1996 and serves businesses and consumers across Macomb, Oakland, Wayne and St. Clair counties with a full range of lending, deposit, trust, wealth management, and Internet banking services. The Bank operates four full service facilities, in Mount Clemens, Rochester Hills, Grosse Pointe Farms and Grosse Pointe Woods, Michigan. Community Central Mortgage Company, LLC, a subsidiary of the Bank, operates locations servicing the Detroit metropolitan area and Northwest Indiana. River Place Trust and Community Central Wealth Management are divisions of Community Central Bank. Community Central Insurance Agency, LLC is a wholly owned subsidiary of Community Central Bank.
Forward-Looking Statements. This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include: changes in interest rates and interest-rate relationships; changes in the national and local economy; 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; our ability to successfully integrate acquisitions into our existing operations, and the availability of new acquisitions, joint ventures and alliance opportunities; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and other factors included in Community Central Bank Corporation's filings with the Securities and Exchange Commission, available free via EDGAR. The Corporation assumes no responsibility to update forward-looking statements.
(financial schedules follow)
Community Central Bank Corporation (NasdaqGM:CCBD)
Summary of Selected Financial Data
| | | Three months ended | | | Nine months ended | |
| | | September 30, | | | September 30, | |
| | | Unaudited | | | Unaudited | | | Unaudited | | | Unaudited | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | (In thousands) | | | (In thousands) | |
| OPERATIONS | | | | | | | | | | | | |
| Interest income | | | | | | | | | | | | |
| Loans | | $ | 6,378 | | | $ | 7,177 | | | $ | 19,242 | | | $ | 20,914 | |
| Taxable securities | | | 954 | | | | 774 | | | | 2,722 | | | | 2,246 | |
| Tax-exempt securities | | | 141 | | | | 350 | | | | 517 | | | | 1,097 | |
| Federal funds sold | | | 64 | | | | 155 | | | | 373 | | | | 541 | |
| | | | | | | | | | | | | |
| Total interest income | | | 7,537 | | | | 8,456 | | | | 22,854 | | | | 24,798 | |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | |
| Deposits | | | 2,887 | | | | 3,607 | | | | 9,233 | | | | 10,761 | |
| Rep Agreement and Fed Funds | | | 304 | | | | 245 | | | | 823 | | | | 638 | |
| FHLB Advances | | | 1,218 | | | | 1,038 | | | | 3,692 | | | | 2,934 | |
| ESOP loan interest | | | - - - | | | | 1 | | | | 1 | | | | 5 | |
| Subordinated debentures | | | 195 | | | | 315 | | | | 702 | | | | 1,268 | |
| | | | | | | | | | | | | |
| Total interest expense | | | 4,604 | | | | 5,206 | | | | 14,451 | | | | 15,606 | |
| | | | | | | | | | | | | | | | | |
| Net interest income | | | 2,933 | | | | 3,250 | | | | 8,403 | | | | 9,192 | |
| | | | | | | | | | | | | | | | | |
| Provision for credit losses | | | 1,084 | | | | 775 | | | | 4,068 | | | | 1,000 | |
| | | | | | | | | | | | | |
| Net interest income after provision | | | 1,849 | | | | 2,475 | | | | 4,335 | | | | 8,192 | |
| | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | |
| Fiduciary income | | | 82 | | | | 124 | | | | 288 | | | | 322 | |
| Deposit service charges | | | 109 | | | | 105 | | | | 383 | | | | 285 | |
| Net realized security gains | | | 84 | | | | (31 | ) | | | 194 | | | | (44 | ) |
| Mortgage banking income | | | 461 | | | | 494 | | | | 1,341 | | | | 1,842 | |
| Other income | | | 1,359 | | | | 1,143 | | | | 5,248 | | | | 1,993 | |
| | | | | | | | | | | | | |
| Total noninterest income | | | 2,095 | | | | 1,835 | | | | 7,454 | | | | 4,398 | |
| | | | | | | | | | | | | | | | | |
| Noninterest expense | | | | | | | | | | | | | | | | |
| Salaries, benefits and payroll taxes | | | 1,884 | | | | 1,981 | | | | 5,551 | | | | 6,027 | |
| Occupancy expense | | | 444 | | | | 427 | | | | 1,357 | | | | 1,344 | |
| Other operating expense | | | 1,549 | | | | 1,077 | | | | 4,284 | | | | 2,980 | |
| | | | | | | | | | | | | |
| Total noninterest expense | | | 3,877 | | | | 3,485 | | | | 11,192 | | | | 10,351 | |
| | | | | | | | | | | | | | | | | |
| Income before taxes | | | 67 | | | | 825 | | | | 597 | | | | 2,239 | |
| | | | | | | | | | | | | | | | | |
| Provision for income taxes | | | (37 | ) | | | 228 | | | | (22 | ) | | | 448 | |
| | | | | | | | | | | | | |
| Net income | | $ | 104 | | | $ | 597 | | | $ | 619 | | | $ | 1,791 | |
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Community Central Bank Corporation (NasdaqGM:CCBD)
Summary of Selected Financial Data - continued
| | | Three months ended | | | Nine months ended | |
| | | September 30, | | | September 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| PER SHARE DATA | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.03 | | | $ | 0.16 | | | $ | 0.17 | | | $ | 0.46 | |
| Diluted earnings per share | | $ | 0.03 | | | $ | 0.16 | | | $ | 0.17 | | | $ | 0.46 | |
| Book value per share | | $ | 8.96 | | | $ | 9.18 | | | $ | 8.96 | | | $ | 9.18 | |
Basic average shares outstanding (000’s) | | | 3,734 | | | | 3,760 | | | | 3,730 | | | | 3,870 | |
Diluted average shares outstanding (000’s) | | | 3,734 | | | | 3,799 | | | | 3,732 | | | | 3,920 | |
Actual shares outstanding (000’s) | | | 3,735 | | | | 3,697 | | | | 3,735 | | | | 3,697 | |
| | | | | | | | | | | | | | | | | |
| Net interest margin (fully tax-equivalent) | | | 2.36 | % | | | 2.83 | % | | | 2.27 | % | | | 2.71 | % |
Condensed Balance Sheet
| | | Unaudited | | | Audited | |
| | | September 30, | | | December 31, | |
| | | 2008 | | | 2007 | |
| | | | | | (In thousands) | |
| Assets | | | | | | |
| Cash and equivalents | | $ | 38,488 | | | $ | 9,183 | |
| Investments | | | 73,145 | | | | 73,313 | |
| Trading securities | | | 17,375 | | | | 20,115 | |
| Residential mortgage loans held for sale | | | 1,362 | | | | 4,848 | |
| Loans | | | 398,180 | | | | 389,912 | |
| Allowance for loan losses | | | (7,796 | ) | | | (6,403 | ) |
| Other assets | | | 32,170 | | | | 29,337 | |
| | | | | | | |
| Total Assets | | $ | 552,924 | | | $ | 520,305 | |
| | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | |
| Deposits | | $ | 361,007 | | | $ | 328,635 | |
| Repurchase agreements | | | 35,164 | | | | 32,659 | |
| Federal Home Loan Bank advances | | | 105,510 | | | | 104,495 | |
| Other liabilities | | | 4,090 | | | | 3,691 | |
| Subordinated debentures | | | 13,699 | | | | 17,597 | |
| Stockholders’ equity | | | 33,454 | | | | 33,228 | |
| | | _ | | | | |
| Total Liabilities and Stockholders’ Equity | | $ | 552,924 | | | $ | 520,305 | |
Condensed balance sheet data contains adjustments for fair value option SFAS 159
OTHER DATA- dollars in thousands
| Troubled debt restructuring | | | 3,507 | | | | 253 | |
| Loans past due 90 days and still accruing | | | 295 | | | | 723 | |
| Nonaccrual loans | | | 21,683 | | | | 16,962 | |
| Other real estate owned | | | 2,161 | | | | 854 | |
| Allowance for loan losses to total loans | | | 1.96 | % | | | 1.64 | % |
| Allowance for loan losses to nonperforming | | | | | | | | |
| loans (a) | | | 30.59 | % | | | 35.70 | % |
| Nonperforming loans to total loans | | | 6.40 | % | | | 4.60 | % |
| Nonperforming assets to total assets (b) | | | 5.00 | % | | | 3.61 | % |
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Community Central Bank Corp.
| Stockholders’ equity to total assets | | | 6.05 | % | | | 6.39 | % |
| Tier 1 Leverage Ratio | | | 8.05 | % | | | 8.37 | % |
| Tier 1 Capital to Risk-Weighted Assets | | | 10.16 | % | | | 10.29 | % |
| Total Capital to Risk-Weighted Assets | | | 13.07 | % | | | 13.28 | % |
| (a) | Nonperforming loans include nonaccrual loans, accruing loans 90 days or more past due and troubled debt restructured loans. |
| (b) | Nonperforming assets include nonperforming loans and forclosed assets. |
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