(COMMUNITY SHORES BANK CORPORATION LOGO)
FOR FURTHER INFORMATION:
AT COMMUNITY SHORES BANK CORPORATION:
Heather D. Brolick Tracey Welsh
President and CEO Senior Vice President and CFO
1-231-780-1845 1-231-780-1847
hbrolick@communityshores.com twelsh@communityshores.com
MEDIA CONTACT:
Linda Margolin
Margolin & Associates, Inc.
1-216-932-1755
lmm@margolinIR.com
COMMUNITY SHORES REPORTS SECOND QUARTER 2006 EARNINGS OF $0.23 PER DILUTED
SHARE
MUSKEGON, Mich., July 21, 2006 (PRIMEZONE) -- Community Shores Bank Corporation
(Nasdaq:CSHB), Muskegon's only locally headquartered independent community
banking organization, today reported second quarter 2006 net income of $342,000
compared with $342,500 reported in the second quarter of 2005, essentially flat.
Diluted earnings per share were $0.23 compared with $0.23 for the year-ago
quarter.
Heather D. Brolick, President and CEO, commented, "We are pleased with our
performance this quarter, and its consistency. Michigan's economy has been a
challenge, although Muskegon is one of the brightest corners of our state, and
our base of small entrepreneurial businesses is relatively independent of trends
in the auto industry. Our margins have been stable over the past five quarters,
and our loan pipeline remains healthy, with asset quality restored to its
earlier high-performance level. We are positioned well for a strong year, with
several opportunities for additional growth and profitability as the year
progresses."
Total revenue, consisting of net interest income and non-interest income, was
$2.5 million for second quarter of 2006, an increase of 7.0% above the $2.3
million revenue reported for the prior year's second quarter. Net interest
income increased 5.6% to $2.1 million, reflecting a 7.3% increase in average
earning assets. Although the margin decreased 2 basis points compared to 2005's
second quarter, the margin improved 9 basis points compared with 2006's first
quarter.
Non-interest income for the current quarter was $355.9 thousand compared with
$310.3 thousand for the year-ago quarter, an increase of $46.0 thousand, or
14.7%. Service charges increased by $30.5 thousand, or 13.5%, with gains on
mortgage loan sales adding an incremental $8.9 thousand.
Non-interest expense totaled $1.8 million for the second quarter of 2006, up
$86.6 thousand or 5.2% from the second quarter of 2005.
Salaries and employee benefits, up $44.3 thousand or 4.9%, accounted for the
majority of the increase, followed by an additional $15.7 thousand, up 21.7%,
for occupancy. The efficiency ratio for the second quarter of 2006 improved to
71.08% from 72.15% for the year-ago quarter. Ms. Brolick noted, "Expense control
remains a focus throughout the organization; all of our employees are on board
to enhance the efficiency of our Company."
Assets at June 30, 2006 totaled $236.7 million compared with $222.8 million
twelve months ago, up $13.9 million or 6.3%. Loans held for investment increased
$12.2 million, or 6.5%, reaching $199.1 million at June 30, 2006. Deposits
increased $13.6 million, or 7.1%, to $205.2 million for the same 12-month
period.
Nonperforming loans and delinquencies were $1.43 million or 0.72% of period-end
loans at June 30, 2006, compared with $1.58 million or 0.82% of loans at March
31, 2006 and $1.0 million or 0.55% of loans for the year-ago quarter. Net
charge-offs were $94 thousand this quarter, or 0.19% of average loans on an
annualized basis, compared with $384 thousand or 0.81% for the previous quarter,
and $74 thousand, or 0.16% a year ago. The allowance for loan and lease losses
stands at 1.22% of total loans at June 30, 2006.
Shareholders' equity totaled $15.1 million at June 30, 2006, up $1.1 million
from twelve months ago. Tier I capital was 6.51% for the second quarter of 2006
compared with 6.35% for the prior year's second quarter. Shares outstanding at
period-end were 1,436,800. Ms. Brolick concluded, "We continue to focus on the
customer experience as the number one opportunity to enhance the value of our
franchise. We believe this is the straightest path to revenue growth, and we
plan to safeguard this growth with disciplined spending controls and prudent
management of asset quality. These factors are firmly in place, and we look
forward to a continuation of our solid performance."
About the Company
Community Shores Bank Corporation is the only independent community banking
organization headquartered in Muskegon. The Company serves businesses and
consumers in the western Michigan counties of Muskegon and Ottawa from three
branch offices. Community Shores Bank opened for business in January 1999, and
has grown to $237 million in assets. The Company's stock is listed on the NASDAQ
Capital Market under the symbol 'CSHB.' For further information, please visit
the Company's web site at: www.communityshores.com.
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) that are based on current expectations that
involve a number of risks and uncertainties. Actual results may differ
materially from the results expressed in forward-looking statements. Factors
that might cause such a difference include changes in interest rates and
interest rate relationships; demand for products and services; the degree of
competition by traditional and non-traditional competitors; changes in banking
regulation; changes in tax laws; changes in prices, levies, and assessments; 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; changes in the national and local economy; and other
factors, including risk factors, referred to from time to time in filings made
by Community Shores with the Securities and Exchange Commission. Community
Shores undertakes no obligation to update or clarify forward-looking statements,
whether as a result of new information, future events or otherwise.
COMMUNITY SHORES CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
QUARTERLY
---------------------------------------------------------- YEAR TO DATE
2006 2006 2005 2005 2005 ----------------------
(dollars in thousands except per share data) 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 2006 2005
---------- ---------- ---------- ---------- ---------- ---------- ----------
EARNINGS
Net interest income 2,113 2,075 2,114 2,100 2,002 4,188 3,946
Provision for loan and lease losses 224 78 508 98 130 302 248
Noninterest income 356 320 339 319 311 676 604
Noninterest expense 1,755 1,792 1,793 1,755 1,668 3,547 3,236
Pre tax income 491 525 153 565 514 1,044 1,067
Net Income 342 364 119 389 343 706 705
Basic earnings per share $ 0.24 $ 0.25 $ 0.08 $ 0.27 $ 0.24 $ 0.49 $ 0.49
Diluted earnings per share $ 0.23 $ 0.25 $ 0.08 $ 0.26 $ 0.23 $ 0.48 $ 0.48
Average shares outstanding 1,436,800 1,436,800 1,436,800 1,435,757 1,432,800 1,436,800 1,432,057
Average diluted shares outstanding 1,461,201 1,474,279 1,482,431 1,480,317 1,462,813 1,468,181 1,461,141
PERFORMANCE RATIOS
Return on average assets 0.60% 0.64% 0.22% 0.71% 0.65% 0.62% 0.68%
Return on average common equity 9.11% 9.89% 3.28% 10.89% 9.88% 9.47% 10.29%
Net interest margin 3.94% 3.85% 4.05% 4.00% 3.96% 3.90% 3.97%
Efficiency ratio 71.08% 74.82% 73.09% 72.57% 72.15% 72.92% 71.11%
Full-time equivalent employees 63 63 61 60 59 63 59
CAPITAL
End of period equity to assets 6.38% 6.57% 6.53% 6.60% 6.31% 6.38% 6.31%
Tier 1 capital to end of period assets 6.51% 6.70% 6.62% 6.66% 6.35% 6.51% 6.35%
Book value per share $ 10.52 $ 10.29 $ 10.09 $ 10.05 $ 9.81 $ 10.52 $ 9.81
ASSET QUALITY
Gross loan charge-offs 120 405 95 62 80 525 161
Net loan charge-offs 94 384 89 59 74 478 132
Net loan charge-offs to avg loans
(annualized) 0.19% 0.81% 0.19% 0.13% 0.16% 0.25% 0.07%
Allowance for loan and lease losses 2,437 2,307 2,613 2,194 2,155 2,437 2,155
Allowance for losses to total loans 1.22% 1.20% 1.36% 1.17% 1.15% 1.22% 1.15%
Past due and nonaccrual loans (90 days) 1,428 1,579 1,128 834 1,034 1,428 1,034
Past due and nonaccrual loans to total
loans 0.72% 0.82% 0.59% 0.45% 0.55% 0.72% 0.55%
Other real estate and repossessed assets 58 4 22 6 6 58 6
END OF PERIOD BALANCES
Loans 199,075 191,916 192,645 187,263 186,857 199,075 186,857
Total earning assets 223,447 215,305 212,262 209,479 212,419 223,447 212,419
Total assets 236,677 225,079 222,166 218,864 222,751 236,677 222,751
Deposits 205,175 194,572 190,451 186,081 191,551 205,175 191,551
Shareholders' equity 15,097 14,791 14,500 14,439 14,057 15,097 14,057
AVERAGE BALANCES
Loans 195,783 189,698 191,170 187,909 182,910 192,758 179,762
Total earning assets 216,868 218,397 211,025 212,448 202,186 217,628 199,010
Total assets 226,911 227,725 220,061 220,101 209,545 227,319 205,863
Deposits 192,696 197,173 184,005 168,884 155,733 194,922 168,003
Shareholders' equity 15,034 14,716 14,530 14,290 13,855 14,913 13,691
COMMUNITY SHORES BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
06/30/06 06/30/05 06/30/06 06/30/05
------------ ------------ ----------- ----------
INTEREST AND DIVIDEND INCOME
Loans, including fees $3,841,279 $3,098,902 $7,369,830 $5,921,243
Securities (including FHLB dividends) 179,724 172,933 360,040 330,717
Federal funds sold and other interest income 18,757 2,243 119,739 17,272
---------- ---------- ---------- ----------
Total interest income 4,039,760 3,274,078 7,849,609 6,269,232
INTEREST EXPENSE
Deposits 1,678,261 1,055,047 3,217,233 1,911,376
Repurchase agreements and federal funds purchased
and other debt 75,917 71,904 110,683 128,453
Federal Home Loan Bank advances and notes payable 172,417 145,357 333,740 283,108
---------- ---------- ---------- ----------
Total interest expense 1,926,595 1,272,308 3,661,656 2,322,937
NET INTEREST INCOME 2,113,165 2,001,770 4,187,953 3,946,295
Provision for loan losses 223,599 130,335 301,752 247,757
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,889,566 1,871,435 3,886,201 3,698,538
Noninterest income
Service charges on deposit accounts 256,176 225,667 494,289 433,503
Mortgage loan referral fees 1,437 0 1,437 2,120
Gain on sale of loans 11,668 2,724 16,403 16,435
Loss on disposal of equipment 0 (347) (124) (347)
Other 86,636 82,244 164,235 153,216
---------- ---------- ---------- ----------
Total noninterest income 355,917 310,288 676,240 604,927
Noninterest expense
Salaries and employee benefits 947,030 902,709 1,938,076 1,749,499
Occupancy 87,776 72,122 175,074 148,398
Furniture and equipment 101,737 95,533 198,254 179,200
Advertising 40,935 40,320 83,792 86,427
Data Processing 102,514 91,178 196,278 178,738
Professional services 130,519 133,327 257,791 265,309
Other 344,119 332,799 697,289 628,645
---------- ---------- ---------- ----------
Total noninterest expense 1,754,630 1,667,988 3,546,554 3,236,216
INCOME BEFORE INCOME TAXES 490,853 513,735 1,043,662 1,067,249
Federal income tax expense 148,859 171,222 310,303 362,597
---------- ---------- ---------- ----------
NET INCOME $ 341,994 $ 342,513 $ 705,584 $ 704,652
========== ========== ========== ==========
Weighted average shares outstanding 1,436,800 1,432,800 1,436,800 1,432,057
========== ========== ========== ==========
Diluted average shares outstanding 1,461,201 1,462,813 1,468,181 1,461,141
========== ========== ========== ==========
Basic income per share $ 0.24 $ 0.24 $ 0.49 $ 0.49
========== ========== ========== ==========
Diluted income per share $ 0.23 $ 0.23 $ 0.48 $ 0.48
========== ========== ========== ==========
COMMUNITY SHORES BANK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
JUNE 30, DECEMBER 31, JUNE 30,
2006 2005 2005
(UNAUDITED) (AUDITED) (UNAUDITED)
------------ ------------ ------------
ASSETS
Cash and due from financial institutions $ 6,592,357 $ 4,361,277 $ 6,644,959
Interest-bearing deposits in other financial institutions 288,517 90,182 278,224
Federal funds sold 5,350,000 200,000 6,650,000
------------ ------------ ------------
Total cash and cash equivalents 12,230,874 4,651,459 13,573,183
Securities
Available for sale 13,043,976 13,983,933 15,274,110
Held to maturity 5,264,370 4,918,499 3,359,398
------------ ------------ ------------
Total securities 18,308,346 18,902,432 18,633,508
Loans 199,074,571 192,644,742 186,856,712
Less: Allowance for loan losses 2,436,765 2,612,581 2,154,519
------------ ------------ ------------
Net loans 196,637,806 190,032,161 184,702,193
Federal Home Loan Bank stock 425,000 425,000 425,000
Premises and equipment,net 6,767,643 5,922,886 3,554,486
Accrued interest receivable 1,002,209 994,219 840,040
Other assets 1,304,890 1,238,194 1,015,031
------------ ------------ ------------
Total assets $236,676,768 $222,166,351 $222,750,733
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest-bearing $ 18,439,578 $ 16,564,735 $ 18,062,244
Interest-bearing 186,735,865 173,886,366 173,489,212
------------ ------------ ------------
Total deposits 205,175,443 190,451,101 191,551,456
Federal funds purchased and repurchase agreements 4,902,409 6,065,010 5,775,131
Federal Home Loan Bank advances 6,000,000 6,000,000 6,000,000
Subordinated debentures 4,500,000 4,500,000 4,500,000
Notes payable 400,000 0 0
Accrued expenses and other liabilities 601,466 650,329 867,441
------------ ------------ ------------
Total liabilities 221,579,318 207,666,440 208,694,028
Shareholders' Equity
Common Stock, no par value: 9,000,000 shares authorized,
1,436,800 issued at March 31, 2006 and December 31, 2005
and 1,432,800 at March 31, 2005 12,999,998 12,998,670 12,950,998
Retained earnings 2,418,046 1,712,462 1,204,435
Accumulated other comprehensive deficit (320,594) (211,221) (98,728)
------------ ------------ ------------
Total shareholders' equity 15,097,450 14,499,911 14,056,705
------------ ------------ ------------
Total liabilities and shareholders' equity $236,676,768 $222,166,351 $222,750,733
============ ============ ============