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Glen Ellyn, Illinois Contact: Scott W. Hamer
January 28, 2010 President/CEO
Company Release 630-545-0900
COMMUNITY FINANCIAL SHARES, INC.
ANNOUNCES RESULTS FOR THE THREE MONTHS AND YEAR ENDED
DECEMBER 31, 2009
Community Financial Shares, Inc. (OTCBB: CFIS) (the "Company"), the
holding company for Community Bank-Wheaton/Glen Ellyn (the "Bank"), reported a
net loss (unaudited) for the three months and year ended December 31, 2009 of
$322,000 and $544,000, respectively. This compares to net losses of $234,000 and
$1.3 million for the comparable prior year periods. Net loss available to common
shareholders totaled $433,000 and $818,000 for the three months and year ended
December 31, 2009, respectively. For the three months ended December 31, 2009,
basic and diluted loss per share both totaled $0.35. This represents a decrease
of 84.2% from $0.19 for both basic and diluted loss per share for the comparable
prior year period. In addition, for the year ended December 31, 2009 basic and
diluted loss per share both totaled $0.66. This represents an improvement of
35.9% from $1.03 for both basic and diluted loss per share for the year ended
December 31, 2008. The increase in net loss for the three months ended December
31, 2009 is primarily the result of the net effect of a $509,000 increase in net
interest income, a $74,000 increase in provision for loan losses, a $347,000
increase in noninterest expense, and a $66,000 increase in noninterest income.
Similarly, the decrease in net loss for the year ended December 31, 2009 is
primarily the result of the net effect of a $782,000 increase in net interest
income, a $471,000 decrease in provision for loan losses, an $884,000 increase
in noninterest income and a $940,000 increase in noninterest expense.
Total assets at December 31, 2009 were $341.9 million, which represents an
increase of $47.2 million, or 16.0%, compared to $294.7 million at December 31,
2008. The increase in total assets was the result of an increase in investment
securities of $17.5 million, or 64.8%, to $44.5 million at December 31, 2009
from $27.0 million at December 31, 2008, an increase in loans receivable of
$14.0 million, or 6.4%, to $233.6 million at December 31, 2009 from $219.6
million at December 31, 2008, and an increase in cash and cash equivalents of
$10.0 million, or 63.3%, to $25.8 million at December 31, 2009 from $15.8
million at December 31, 2008. The growth in loans during the year ended December
31, 2009 was primarily due to continued strong lending and business
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relationships within our community maintained by our loan staff. The increase in
investment securities was due to well priced opportunities in the market and the
increase in cash and cash equivalents are due to the increase in deposits and a
strategic decision to increase the Bank's liquidity position. Deposits increased
$44.8 million, or 17.7%, to $298.3 million at December 31, 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 $21.7 million, or 38.9%, to $77.5 million at December
31, 2009 from $55.8 million at December 31, 2008; (2) an increase in money
market accounts of $4.1 million, or 10.6%, to $42.9 million at December 31, 2009
from $38.8 million at December 31, 2008; and (3) an increase in savings accounts
of $3.1 million, or 13.4% to $26.1 million at December 31, 2009 from $23.0
million at December 31, 2008. The percentage of interest bearing deposit
accounts to total deposits increased to 26.0% at December 31, 2009 from 22.0% at
December 31, 2008 and the percentage of certificates of deposit to total
deposits decreased to 40.8% at December 31, 2009 from 42.8% at December 31,
2008. Borrowed money, consisting of Federal Home Loan Bank advances and other
borrowings, decreased $4.2 million, or 22.1%, to $14.8 million at December 31,
2009 from $19.0 million at December 31, 2008.
Stockholders' equity increased $6.5 million, or 38.9%, to $23.1 million at
December 31, 2009 from $16.6 million at December 31, 2008. The increase in
stockholders' equity for the year ended December 31, 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 $213,000 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 year ended December 31, 2009. As of
December 31, 2009 there were 1,245,267 shares of Company common stock
outstanding, resulting in a tangible book value of $13.13 per share at that
date.
Net interest income before provision for loan losses increased $509,000,
or 25.6%, to $2.5 million for the three months ended December 31, 2009 and
increased $782,000, or 9.5%, to $9.1 million for the year ended December 31,
2009 as compared to the comparable prior year periods. These increases are
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primarily due to decreases in the average cost of interest bearing liabilities
of 84 and 88 basis points for the three months and year ended December 31, 2009,
respectively. The average cost of interest bearing liabilities decreased to
1.67% and 1.94% for the three months and year ended December 31, 2009,
respectively, from 2.51% and 2.82% for the comparable prior year periods. The
effect of this decrease was partially offset by decreases in the average yield
on interest-earning assets of 59 and 82 basis points for the three months and
year ended December 31, 2009, respectively. The average yield on
interest-earning assets decreased to 4.81% and 4.92% for the three months and
year ended December 31, 2009, respectively, from 5.40% and 5.74% for the
comparable prior year periods. The net interest margin, expressed as a
percentage of average earning assets, increased 22 basis points to 3.27% for the
three months ended December 31, 2009 from 3.05% for the three months ended
December 31, 2008; however it remained unchanged at 3.13% for the year ended
December 31, 2009 as compared to the prior year period. The average yield on
loans decreased 27 and 53 basis points for the three months and year ended
December 31, 2009, respectively, compared to the comparable prior year periods.
This decrease is partially due to the fact that approximately one half of the
Bank's loan portfolio consists of adjustable rate loans. The average yield on
loans decreased to 5.39% and 5.49% for the three months and year ended December
31, 2009, respectively, from 5.66% and 6.02% for the comparable prior year
periods.
The provision for loan losses increased $74,000 for the three months ended
December 31, 2009 and decreased $471,000 for the year ended December 31, 2009,
compared to the prior year periods. The changes in the provision are the result
of management's quarterly analysis of the allowance for loan loss. Nonperforming
loans totaled $15.0 million, or 4.4% of total assets, at December 31, 2009 and
$2.8 million, or 0.94% of total assets, at December 31, 2008. The ratio of the
allowance for loan losses to nonperforming loans totaled 28.0% and 119.7% at
December 31, 2009 and December 31, 2008, respectively. Management continues to
take aggressive actions in dealing with problem credits.
Noninterest income increased $66,000 to $470,000 for the three months
ended December 31, 2009 as compared to the comparable prior year period. The
increase is primarily due to an increase in gain on sale of loans of $122,000,
which was partially offset by a decrease of $47,000 in service charges on
deposit accounts and a loss on sale of foreclosed real estate of $18,000.
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Noninterest income increased $884,000, or 65.1%, to $2.2 million for the year
ended December 31, 2009 as compared to the comparable prior year period. This
increase is primarily due to increases in gain on sale of loans of $493,000 and
a $485,000 loss on impairment related to FHLMC preferred stock incurred during
the year ended December 31, 2008. The increase in gain on sale of loans is
primarily due to a reduction in mortgage interest rates. Partially offsetting
these increases are decreases in gains on sale of securities and service charges
on deposit accounts of $29,000 and $84,000, respectively and an increase in loss
on sale of foreclosed assets of $62,000.
Noninterest expense increased $347,000, or 13.3%, to $2.9 million for the
three months ended December 31, 2009 as compared to the comparable prior year
period. This increase is primarily due to increases in compensation and benefits
expense of $67,000 and FDIC premiums of $252,000. The increase in compensation
and benefits expense is primarily the result of annual merit increases. These
increases were partially offset by a $14,000 decrease in advertising and
marketing expenses, a $15,000 decrease in data processing expenses and a $40,000
decrease in building and equipment expense, which is primarily the result of a
successful petition to lower the real estate tax assessments on two Bank
properties. Noninterest expenses increased $940,000, or 9.5%, to $10.9 million
for the year ended December 31, 2009 as compared to the comparable prior year
period. This increase is primarily due to higher FDIC premiums of $436,000 and
special assessments of $148,000, and increased compensation and benefits expense
of $237,000 and data processing expense of $33,000. Partially offsetting these
increases was a decrease in advertising and marketing expense of $58,000.
Community Financial Shares, Inc. is a bank holding company headquartered
in Glen Ellyn, Illinois with $341.9 million in assets at December 31, 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
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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) December 31, September 30, December 31,
(IN THOUSANDS) 2009 2009 2008
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Total assets $ 341,898 $ 321,636 $ 294,677
Loans receivable, net 233,572 231,959 219,615
Investment securities available-for-sale 44,544 41,428 26,964
Deposits 298,311 274,309 253,514
FHLB Advances and other borrowings 14,800 18,900 19,000
Stockholders' equity 23,074 23,857 16,613
Nonperforming assets 17,431 12,057 2,954
Nonperforming loans 15,035 9,980 2,756
Allowance for loan losses 4,212 3,828 3,300
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SELECTED RATIOS:
Total equity to total assets 6.75% 7.42% 5.64%
Allowance for loan losses as a % of nonperforming assets 24.2% 31.7% 111.7%
Allowance for loan losses as a % of loans 1.77% 1.62% 1.48%
Book value per share $ 13.13 $ 13.56 $ 13.34
Market value per share 7.55 14.50 17.50
Quarterly net interest margin (1) 3.27% 3.19% 3.05%
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</Table>
<Table>
<Caption>
Three months ended Year ended
December 31, December 31,
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SELECTED OPERATING DATA: (UNAUDITED) 2009 2008 2009 2008
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
Interest income $ 3,681 $ 3,527 $ 14,249 $ 15,184
Interest expense 1,179 1,534 5,193 6,910
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Net interest income 2,502 1,993 9,056 8,274
Provision for loan losses 664 590 1,744 2,215
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Net interest income after provision for loan losses 1,838 1,403 7,312 6,059
Noninterest income 470 404 2,242 1,358
Noninterest expense 2,949 2,602 10,881 9,941
-------- -------- -------- --------
Loss before income tax (641) (796) (1,327) (2,524)
Income tax benefit (319) (562) (782) (1,244)
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Net loss (322) (234) (544) (1,279)
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Preferred stock dividends and accretion (111) - (274) -
-------- -------- -------- --------
Net loss available to common shareholders $ (433) $ (234) $ (818) $ (1,279)
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Loss per share - basic $ (0.35) $ (0.19) $ (0.66) $ (1.03)
Loss per share - diluted $ (0.35) $ (0.19) $ (0.66) $ (1.03)
Selected performance ratios:
Loss on average assets (1) -0.38% -0.32% -0.35% -0.88%
Loss on average equity (1) -5.36% -5.50% -5.27% -14.07%
Noninterest expense to average total assets 3.52% 3.58% 3.44% 3.39%
Net interest margin (1) 3.27% 3.05% 3.13% 3.13%
Average total assets $332,635 $288,351 $316,759 $293,218
Average total equity 23,831 16,850 20,828 18,234
</Table>
(1) Annualized.