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Glen Ellyn, Illinois Contact: Scott W. Hamer
July 31, 2009 President/CEO
Company Release 630-545-0900
COMMUNITY FINANCIAL SHARES, INC.
ANNOUNCES RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009
Community Financial Shares, Inc. (OTCBB: CFIS) (the "Company"), the
holding company for Community Bank-Wheaton/Glen Ellyn (the "Bank"), reported net
losses (unaudited) for the three and six months ended June 30, 2009 of $390,000
and $308,000, respectively. This compares to net losses of $327,000 and $246,000
for the comparable prior year periods. For the three months ended June 30, 2009,
basic and diluted loss per share both totaled $0.31. This represents a decrease
of 19.2% from $0.26 for both basic and diluted loss per share for the comparable
prior year period. In addition, for the six months ended June 30, 2009 basic and
diluted loss per share both totaled $0.25. This represents a decrease of 25.0%
from $0.20 for both basic and diluted loss per share for the six months ended
June 30, 2008. The increase in net loss for the three months ended June 30, 2009
is primarily the result of the net effect of a $70,000 increase in provision for
loan losses, a $337,000 increase in noninterest expense, a $68,000 increase in
net interest income and a $247,000 increase in noninterest income. Similarly,
the increase in net loss for the six months ended June 30, 2009 is primarily the
result of the net effect of a $130,000 increase in provision for loan losses, a
$60,000 increase in net interest income, a $247,000 increase in noninterest
income and a $270,000 increase in noninterest expense.
Total assets at June 30, 2009 were $315.9 million, which represents an
increase of $21.2 million, or 7.2%, compared to $294.7 million at December 31,
2008. The increase in total assets was the result of an increase in investment
securities of $13.4 million, or 49.6%, to $40.3 million at June 30, 2009 from
$27.0 million at December 31, 2008, and an increase in loans receivable of $7.0
million, or 3.2%, to $226.6 million at June 30, 2009 from $219.6 million at
December 31, 2008. In addition, loans receivable increased $11.2 million, or
5.2%, from $215.5 million at March 31, 2009. Partially offsetting these
increases was a decrease in cash and cash equivalents of $1.6 million to $14.2
million at June 30, 2009 from $15.8 million at December 31, 2008. The growth in
loans during the six months ended June 30, 2009 is primarily due to continued
strong relationships within our community maintained by our loan staff. The
increase in investment securities was due to opportunities in the market.
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Deposits increased $14.4 million, or 5.7%, to $268.0 million at June 30, 2009
from $253.5 million at December 31, 2008. This increase primarily consists of
increases in the Bank's core deposit accounts, including: (1) an increase in
interest bearing demand deposit accounts of $11.1 million, or 19.8%, to $66.9
million at June 30, 2009 from $55.8 million at December 31, 2008; and (2) an
increase in money market accounts of $1.9 million, or 4.9%, to $40.7 million at
June 30, 2009 from $38.8 million at December 31, 2008. The percentage of
interest bearing deposit accounts to total deposits increased to 24.6% at June
30, 2009 from 22.0% at December 31, 2008 and the percentage of certificates of
deposit to total deposits decreased to 39.8% at June 30, 2009 from 42.8% at
December 31, 2008. Borrowed money, consisting of Federal Home Loan Bank advances
and other borrowings, remained unchanged at $19.0 million as of June 30, 2009
and December 31, 2008.
Stockholders' equity increased $6.5 million, or 39.4%, to $23.2 million at
June 30, 2009 from $16.6 million at December 31, 2008. The increase in
stockholders' equity for the six months ended June 30, 2009 was primarily the
result of the receipt of a $6.97 million investment from the U.S. Department of
the Treasury in exchange for 6,970 shares of the Company's preferred stock
pursuant to the TARP Capital Purchase Program provided for under the Emergency
Economic Stabilization Act of 2008. Partially offsetting this increase was a
decrease of $125,000 in the Company's accumulated other comprehensive income
relating to the change in fair value of its available-for-sale investment
portfolio and the Company's net loss for the six months ended June 30, 2009. As
of June 30, 2009 there were 1,245,267 shares of Company common stock
outstanding, resulting in a book value of $13.00 per share at that date.
Net interest income before provision for loan losses increased $68,000, or
3.2%, to $2.2 million for the three months ended June 30, 2009 and $60,000, or
1.5%, to $4.2 million for the six months ended June 30, 2009 as compared to the
comparable prior year periods. These increases are primarily due to decreases in
the average cost of interest bearing liabilities of 78 and 97 basis points for
the three and six months ended June 30, 2009, respectively. The average cost of
interest bearing liabilities decreased to 2.05% and 2.14% for the three and six
months ended June 30, 2009, respectively, from 2.83% and 3.11% for the
comparable prior year periods. The effect of this decrease in average cost was
partially offset by decreases in the average yield on interest-earning assets of
79 and 92 basis points for the three and six months ended June 30, 2009,
respectively. The average yield on interest-earning assets decreased to 4.97%
and 5.03% for the three and six months ended June 30, 2009, respectively, from
5.76% and 5.95% for the comparable prior year periods. The net interest margin,
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expressed as a percentage of average earning assets, decreased 10 basis points
to 3.06% for the three months ended June 30, 2009 from 3.16% for the three
months ended June 30, 2008; however it increased 6 basis points from the three
months ended March 31, 2009, and decreased 5 basis points to 3.03% for the six
months ended June 30, 2009 from 3.08% for the six months ended June 30, 2008.
The average yield on loans decreased 41 and 62 basis points for the three and
six months ended June 30, 2009, respectively, compared to the comparable prior
year periods. This decrease is partially due to approximately one-half of the
Bank's loan portfolio being adjustable rate. The average yield on loans
decreased to 5.64% and 5.63% for the three and six months ended June 30, 2009,
respectively, from 6.05% and 6.25% for the comparable prior year periods.
The provision for loan losses increased $70,000 and $130,000 for the three
and six months ended June 30, 2009, respectively, compared to the prior year
period. The increase in the provision was the result of management's quarterly
analysis of the allowance for loan loss. Nonperforming loans totaled $4.6
million, or 1.46% of total assets, at June 30, 2009 and $3.1 million, or 1.09%
of total assets, at June 30, 2008. The ratio of the allowance for loan losses to
nonperforming loans totaled 86.6% and 89.2% at June 30, 2009 and June 30, 2008,
respectively.
Noninterest income increased $247,000, or 54.4%, to $700,000 for the three
months ended June 30, 2009 as compared to the comparable prior year period. The
increase is primarily due to increases in gain on sale of loans of $193,000 and
fees generated by the Company's investment center of $14,000. Noninterest income
increased $247,000, or 25.1%, to $1.2 million for the six months ended June 30,
2009 as compared to the comparable prior year period. This increase is primarily
due to increases in gain on sale of loans of $254,000 and fees generated by the
Company's investment center of $18,000. Partially offsetting these increases are
a decrease in gains on sale of securities of $29,000 and an increase in loss on
sale of foreclosed assets of $54,000.
Noninterest expense increased $337,000, or 14.0%, to $2.7 million for the
three months ended June 30, 2009 as compared to the comparable prior year
period. This increase is primarily due to an increase in FDIC premiums of
$79,000 and special assessments of $148,000, compensation and benefits expense
of $98,000, building and equipment expense of $18,000 and data processing
expense of $18,000. The increase in compensation and benefits expense is the
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result of annual merit increases. The increase in building and equipment expense
are partially due to higher real estate taxes. These increases are partially
offset by lower advertising and marketing expenses of $25,000. Noninterest
expenses increased $270,000, or 5.5%, to $5.2 million for the six months ended
June 30, 2009 as compared to the comparable prior year period. This increase is
primarily due to increases in FDIC premiums and special assessments of $228,000,
compensation and benefits expense of $56,000, building and equipment expense of
$38,000, data processing expense of $29,000. Partially offsetting these
increases was a decrease in advertising and marketing expense of $29,000.
Community Financial Shares, Inc. is a bank holding company headquartered
in Glen Ellyn, Illinois with $315.9 million in assets at June 30, 2009. Its
primary subsidiary, Community Bank-Wheaton/Glen Ellyn, maintains four full
service offices in Glen Ellyn and Wheaton.
For further information about the Company and the Bank visit them on the
world-wide-web at www.commbank-wge.com. In addition, information on the
Company's stock can be found at www.otcbb.com under the symbol CFIS.
Statements contained in this news release which are not historical facts,
are forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risk and uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which include, but
are not limited to, factors discussed in documents filed by the Company with the
Securities and Exchange Commission from time to time.
The Company does not undertake, and specifically disclaims any obligation,
to publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
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<Table>
<Caption>
COMMUNITY FINANCIAL SHARES, INC.
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SELECTED CONSOLIDATED FINANCIAL DATA: (UNAUDITED) June 30, March 31, December 31,
(IN THOUSANDS) 2009 2009 2008
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Total assets $315,897 $308,606 $294,677
Loans receivable, net 226,625 215,471 219,615
Investment securities available-for-sale 40,331 31,334 26,964
Deposits 267,956 267,225 253,514
FHLB Advances 17,000 17,000 17,000
Stockholders' equity 23,158 16,736 16,613
Nonperforming assets 5,492 3,157 2,954
Nonperforming loans 4,612 3,046 2,756
Allowance for loan losses 3,995 3,169 3,300
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SELECTED RATIOS:
Total equity to total assets 7.33% 5.42% 5.64%
Allowance for loan losses as a % of nonperforming assets 72.7% 100.4% 111.7%
Allowance for loan losses as a % of loans 1.73% 1.45% 1.48%
Book value per share $ 13.00 $ 13.44 $ 13.34
Market value per share 15.25 12.25 17.50
Quarterly net interest margin (1) 3.06% 3.00% 3.05%
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</Table>
<Table>
<Caption>
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Three months ended Six months ended
June 30, June 30,
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SELECTED OPERATING DATA: (UNAUDITED) 2009 2008 2009 2008
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
Interest income $ 3,515 $ 3,827 $ 6,943 $ 7,969
Interest expense 1,347 1,727 2,758 3,844
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Net interest income 2,168 2,100 4,184 4,125
Provision for loan losses 870 800 960 830
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Net interest income after provision for loan losses 1,298 1,300 3,224 3,295
Noninterest income 700 454 1,228 981
Noninterest expense 2,739 2,403 5,166 4,896
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Loss before income tax (741) (649) (714) (620)
Income tax benefit (351) (322) (405) (374)
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Net loss $ (390) $ (327) $ (308) $ (246)
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Loss per share - basic (0.31) (0.26) (0.25) (0.20)
Loss per share - diluted (0.31) (0.26) (0.25) (0.20)
SELECTED PERFORMANCE RATIOS:
Loss on average assets (1) -0.50% -0.44% -0.20% -0.17%
Loss on average equity (1) -8.11% -7.12% -3.44% -2.67%
Noninterest expense to average total assets (1) 3.53% 3.27% 3.41% 3.30%
Net interest margin (1) 3.06% 3.16% 3.03% 3.08%
Average total assets $311,123 $294,983 $305,696 $297,469
Average total equity 19,297 18,413 18,080 18,501
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(1) Annualized.