Glen Ellyn, Illinois Contact: Scott W. Hamer
October 30, 2009 President/CEO
Company Release 630-545-0900
COMMUNITY FINANCIAL SHARES, INC.
ANNOUNCES RESULTS FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2009
Community Financial Shares, Inc. (OTCBB: CFIS) (the "Company"), the
holding company for Community Bank-Wheaton/Glen Ellyn (the "Bank"), reported net
income (loss) (unaudited) for the three and nine months ended September 30, 2009
of $86,000 and ($222,000), respectively. This compares to net losses of $800,000
and $1.0 million for the comparable prior year periods. Net loss available to
common shareholders totaled $20,000 and $385,000 for the three and nine months
ended September 30, 2009, respectively. For the three months ended September 30,
2009, basic and diluted loss per share both totaled $0.02. This represents an
improvement of 96.9% from $0.64 for both basic and diluted loss per share for
the comparable prior year period. In addition, for the nine months ended
September 30, 2009 basic and diluted loss per share both totaled $0.31. This
represents an improvement of 63.1% from $0.84 for both basic and diluted loss
per share for the nine months ended September 30, 2008. The increase in net
income for the three months ended September 30, 2009 is primarily the result of
the net effect of a $212,000 increase in net interest income, a $675,000
decrease in provision for loan losses, a $323,000 increase in noninterest
expense, and a $571,000 increase in noninterest income. Similarly, the decrease
in net loss for the nine months ended September 30, 2009 is primarily the result
of the net effect of a $273,000 increase in net interest income, a $545,000
decrease in provision for loan losses, an $818,000 increase in noninterest
income and a $593,000 increase in noninterest expense.
Total assets at September 30, 2009 were $321.6 million, which
represents an increase of $26.9 million, or 9.2%, compared to $294.7 million at
December 31, 2008. The increase in total assets was the result of an increase in
investment securities of $14.4 million, or 53.6%, to $41.4 million at September
30, 2009 from $27.0 million at December 31, 2008, and an increase in loans
receivable of $12.4 million, or 5.6%, to $232.0 million at September 30, 2009
from $219.6 million at December 31, 2008. Partially offsetting these increases
was a decrease in cash and cash equivalents of $1.4 million to $14.4 million at
September 30, 2009 from $15.8 million at December 31, 2008. The growth in loans
during the nine months ended September 30, 2009 is primarily due to continued
strong lending and business relationships within our community maintained by our
loan staff. The increase in investment securities was due to well priced
opportunities in the market. Deposits increased $20.8 million, or 8.2%, to
$274.3 million at September 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 $13.2 million, or 23.7%, to $69.0 million at September 30, 2009 from $55.8
million at December 31, 2008; and (2) an increase in money market accounts of
$4.1 million, or 10.6%, to $42.9 million at September 30, 2009 from $38.8
million at December 31, 2008. The percentage of interest bearing deposit
accounts to total deposits increased to 24.9% at September 30, 2009 from 22.0%
at December 31, 2008 and the percentage of certificates of deposit to total
deposits decreased to 39.7% at September 30, 2009 from 42.8% at December 31,
2008. Borrowed money, consisting of Federal Home Loan Bank advances and other
borrowings, decreased $100,000, or 5.0%, to $18.9 million at September 30, 2009
from $19.0 million at December 31, 2008.
Stockholders' equity increased $7.3 million, or 43.6%, to $23.9 million
at September 30, 2009 from $16.6 million at December 31, 2008. The increase in
stockholders' equity for the nine months ended September 30, 2009 was primarily
the result of the receipt of a $6.97 million investment from the U.S. Department
of the Treasury in May 2009 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 and an increase of $580,000 in
the Company's accumulated other comprehensive income relating to the change in
fair value of its available-for-sale investment portfolio. Partially offsetting
these increases was the Company's net loss for the nine months ended September
30, 2009. As of September 30, 2009 there were 1,245,267 shares of Company common
stock outstanding, resulting in a tangible book value of $13.56 per share at
that date.
Net interest income before provision for loan losses increased
$212,000, or 10.0%, to $2.4 million for the three months ended September 30,
2009 and $273,000, or 4.3%, to $6.6 million for the nine months ended September
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 68 and 88 basis points for the three and nine months ended September 30,
2009, respectively. The average cost of interest bearing liabilities decreased
to 1.85% and 2.04% for the three and nine months ended September 30, 2009,
respectively, from 2.53% and 2.92% 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 72 and 85 basis points for the three
and nine months ended September 30, 2009, respectively. The average yield on
interest-earning assets decreased to 4.88% and 4.99% for the three and nine
months ended September 30, 2009, respectively, from 5.60% and 5.84% for the
comparable prior year periods. The net interest margin, expressed as a
percentage of average earning assets, decreased 8 basis points to 3.19% for the
three months ended September 30, 2009 from 3.27% for the three months ended
September 30, 2008; however it increased 13 basis points from the three months
ended June 30, 2009, and decreased 5 basis points to 3.10% for the nine months
ended September 30, 2009 from 3.15% for the nine months ended September 30,
2008. The average yield on loans decreased 51 and 60 basis points for the three
and nine months ended September 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 5.34% and 5.52% for the three and nine months ended
September 30, 2009, respectively, from 5.85% and 6.12% for the comparable prior
year periods.
The provision for loan losses decreased $675,000 and $545,000 for the
three and nine months ended September 30, 2009, respectively, compared to the
prior year period. The decrease in the provision was the result of management's
quarterly analysis of the allowance for loan loss. Nonperforming loans totaled
$10.0 million, or 3.10% of total assets, at September 30, 2009 and $5.0 million,
or 1.75% of total assets, at September 30, 2008. The ratio of the allowance for
loan losses to nonperforming loans totaled 38.4% and 69.8% at September 30, 2009
and September 30, 2008, respectively.
Noninterest income increased $571,000 to $544,000 for the three months
ended September 30, 2009 as compared to the comparable prior year period. The
increase is primarily due to an increase in gain on sale of loans of $117,000
and a $485,000 loss on impairment related to FHMLC preferred stock incurred in
the three months ended September 30, 2008. Noninterest income increased
$818,000, or 85.7%, to $1.8 million for the nine months ended September 30, 2009
as compared to the comparable prior year period. This increase is primarily due
to increases in gain on sale of loans of $371,000 and the $485,000 loss on
impairment incurred in the three months ended September 30, 2008 mentioned
above. 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
$44,000.
Noninterest expense increased $323,000, or 13.2%, to $2.8 million for
the three months ended September 30, 2009 as compared to the comparable prior
year period. This increase is primarily due to increases in compensation and
benefits expense of $114,000, FDIC premiums of $103,000, building and equipment
expense of $12,000 and data processing expense of $19,000. The increase in
compensation and benefits expense is the 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 $15,000. Noninterest expenses increased $593,000, or 8.1%,
to $7.9 million for the nine months ended September 30, 2009 as compared to the
comparable prior year period. This increase is primarily due to increases in
FDIC premiums of $184,000 and special assessments of $148,000, compensation and
benefits expense of $170,000, building and equipment expense of $49,000 and data
processing expense of $48,000. Partially offsetting these increases was a
decrease in advertising and marketing expense of $44,000.
Community Financial Shares, Inc. is a bank holding company
headquartered in Glen Ellyn, Illinois with $321.6 million in assets at September
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.
COMMUNITY FINANCIAL SHARES, INC.
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SELECTED CONSOLIDATED FINANCIAL DATA: (UNAUDITED) September 30, June 30, March 31, December 31,
(IN THOUSANDS) 2009 2009 2009 2008
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Total assets $ 321,636 $ 315,897 $ 308,606 $ 294,677
Loans receivable, net 231,959 226,625 215,471 219,615
Investment securities available-for-sale 41,428 40,331 31,334 26,964
Deposits 274,309 267,956 267,225 253,514
FHLB Advances 17,000 17,000 17,000 17,000
Stockholders' equity 23,857 23,158 16,736 16,613
Nonperforming assets 12,057 5,492 3,157 2,954
Nonperforming loans 9,980 4,612 3,046 2,756
Allowance for loan losses 3,828 3,995 3,169 3,300
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SELECTED RATIOS:
Total equity to total assets 7.42% 7.33% 5.42% 5.64%
Allowance for loan losses as a % of nonperforming assets 31.7% 72.7% 100.4% 111.7%
Allowance for loan losses as a % of loans 1.62% 1.73% 1.45% 1.48%
Book value per share $ 13.56 $ 13.00 $ 13.44 $ 13.34
Market value per share 14.50 15.25 12.25 17.50
Quarterly net interest margin (1) 3.19% 3.06% 3.00% 3.05%
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Three months ended Nine months ended
September 30, September 30,
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SELECTED OPERATING DATA: (UNAUDITED) 2009 2008 2009 2008
(IN THOUSANDS, EXCEPT PER SHARE DATA) -----------------------------------------------------------
Interest income $ 3,625 $ 3,688 $ 10,568 $ 11,657
Interest expense 1,256 1,531 4,014 5,376
--------- --------- --------- ---------
Net interest income 2,370 2,157 6,554 6,281
Provision for loan losses 120 795 1,080 1,625
--------- --------- --------- ---------
Net interest income after provision for loan losses 2,250 1,362 5,474 4,656
Noninterest income 544 (27) 1,772 954
Noninterest expense 2,766 2,443 7,932 7,339
--------- --------- --------- ---------
Income (loss) before income tax 28 (1,108) (686) (1,728)
Income tax benefit (58) (308) (464) (682)
--------- --------- --------- ---------
Net income (loss) 86 (800) (222) (1,046)
--------- --------- --------- ---------
Preferred stock dividends and accretion (106) -- (163) --
--------- --------- ---------- ---------
Net loss available to common shareholders $ (20) $ (800) $ (385) $ (1,046)
========= ========= ========= =========
Loss per share - basic $ (0.02) $ (0.64) $ (0.31) $ (0.84)
Loss per share - diluted $ (0.02) $ (0.64) $ (0.31) $ (0.84)
SELECTED PERFORMANCE RATIOS:
Earnings (loss) on average assets (1) 0.11% -1.10% -0.14% -0.71%
Earnings (loss) on average equity (1) 1.47% -17.92% -2.26% -11.50%
Noninterest expense to average total assets (1) 3.41% 3.36% 5.14% 5.00%
Net interest margin (1) 3.19% 3.27% 3.10% 3.15%
Average total assets $ 322,187 $ 288,040 $ 311,442 $ 294,370
Average total equity 23,233 17,706 19,817 18,234
(1) Annualized.