Market Overview

Community Central Bank Corporation Announces Q3 Results

Share:

MOUNT CLEMENS, Mich., Nov. 10, 2009 (GLOBE NEWSWIRE) -- Community Central Bank Corporation (Nasdaq: CCBD), the holding company for Community Central Bank, today reported results for the quarter and nine months ended September 30, 2009.

The Corporation reported a net loss of $2.4 million or ($0.66) per diluted common share for the third quarter ended September 30, 2009. This compares to net income of $104,000 or $0.03 per diluted common share for the third quarter ended September 30, 2008. The net loss for the nine months ended September 30, 2009 was $4.7 million or ($1.33) per diluted common share. This compares to net income of $619,000 or $0.17 per diluted common share for the nine months ended September 30, 2008. A $4.4 million and $9.7 million provision for loan losses recorded for the third quarter and nine months ended September 30, 2009, are the primary reason for the decline in net income. At September 30, 2009, the Corporation and the Bank were considered to be "well capitalized."

David A. Widlak, President and CEO commented, "Our third quarter performance continues to reflect weakness in our economy as it affects parts of our loan portfolio. Partially offsetting the increased provision expense were increases in net interest income and in mortgage banking revenue. We are focusing on strategies to preserve and increase capital, and grow segments of operations that are capital efficient, such as our mortgage banking operations, our branch deposit operations as well as our trust and wealth divisions. In late December 2008 and early January 2009, we successfully raised $3.5 million of additional capital through the sale of our Series A preferred stock. On October 1, 2009, we raised an additional $1.0 million through the sale of our Series B preferred stock. We are appreciative of our community's continued confidence and support of Community Central Bank."

Mr. Widlak further stated, "An ongoing effort to increase our core deposits has resulted in a reduction in our cost of funds. During the first nine months of 2009, our deposits increased $13.3 million, with organic deposits increasing $47.8 million, as wholesale deposits decreased $34.6 million. We also replaced $20.5 million of Federal Home Loan Bank advances during the first nine months with lower cost core deposit funding."

Net interest income before the provision for loan losses for the third quarter of 2009 increased to $3.2 million, compared to $2.9 million for the third quarter of 2008. Net interest margin increased to 2.54% in the third quarter of 2009 from 2.36% in the third quarter of 2008. Net interest income before the provision for loan losses for the first nine months of 2009 was $9.1 million, compared to $8.4 million for the first nine months of 2008. Adversely affecting net interest income and net interest margin in the third quarter and first nine months of 2009 was the reversal and non-recognition of interest income on nonaccrual loans which totaled approximately 41 basis points of total net interest margin for the third quarter and nine months ended September 30, 2009. The growth in net interest margin and net interest income was primarily attributable to our lower cost of funds resulting from the significant growth in non-interest bearing checking accounts, which increased $25.1 million from December 31, 2008.

We recorded a $4.4 million provision for loan losses in the third quarter of 2009 and $9.7 million for the first nine months of 2009. The provision is based upon management's review of the risks inherent in the loan portfolio and the level of our allowance for loan losses. In addition, net charge-offs for the first nine months of 2009 totaled $4.8 million, or 1.52% of total average loans on an annualized basis. Total nonaccruing loans and loans past due 90 days or more and still accruing interest totaled $30.5 million, or 7.39% of total loans at September 30, 2009 compared to $17.6 million, or 4.32% at December 31, 2008. The allowance for loan losses at September 30, 2009 was $12.2 million, or 2.95% of total loans, versus $7.3 million, or 1.80% at December 31, 2008. In addition, as of September 30, 2009, restructured loans within the meaning of SFAS No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructurings, codified in ASC 470," increased to $15.1 million from $8.2 million at December 31, 2008. A total of $1.6 million and $2.2 million of Troubled Debt Restructurings are classified as nonaccrual loans and reported in total nonaccrual loans for September 30, 2009 and December 31, 2008, respectively.

Noninterest income was $2.5 million for the third quarter of 2009, increasing $362,000, or 17.3%, from the third quarter of 2008. The increase was primarily related to gains recorded from the change in fair market value of assets and liabilities as measured under Statement of Financial Accounting Standards (SFAS 159), codified in ASC 825, which increased $204,000 in the third quarter of 2009 compared to the third quarter of 2008. The increases recorded during both quarterly periods have been largely attributable to the fair value of the subordinated debenture connected with the issuance of trust preferred securities. The net change in fair value associated with all instruments totaled $2.4 million for the first nine months of 2009, versus $4.1 million for the first nine months of 2008. The widening of market credit spreads for subordinated debentures and trust preferred securities has had a favorable impact on the relative fair value of this financial liability. 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. Mortgage banking income, comprised primarily of gains on the sale of residential mortgages, increased $162,000, or 35.1%, to $623,000 for the third quarter of 2009, compared to the same period in 2008, reflecting growth in the secondary market sales of government FHA and FNMA mortgages spurred by low mortgage interest rates at the beginning of the second quarter of 2009.

Noninterest expense was $4.9 million for the third quarter of 2009, increasing $1.0 million or 26.7% from the third quarter of 2008. The majority of the increase in total noninterest expense was recorded in other operating expense and was attributable to expenses associated with write downs on other real estate owned and other repossessed collateral. The increase in FDIC insurance premiums also contributed to the increase. Salaries, benefits and payroll taxes increased solely from expanded activity and related commissions in the Bank's mortgage banking subsidiary.

At September 30, 2009, the Corporation's assets totaled $546.8 million, a decrease of $10.2 million from December 31, 2008. Total net loans increased to $400.7 million, up $937,000 or 0.2% from December 31, 2008. Total deposits of $370.6 million increased $13.3 million, or 3.7%, for the first nine months of 2009. Increases in deposits for the first nine months were entirely related to organic growth, as brokered time deposits decreased $34.6 million during the first nine months of 2009. Noninterest bearing demand accounts totaled $59.3 million at September 30, 2009, an increase of $25.1 million compared to December 31, 2008. Total stockholders' equity of $30.5 million decreased $3.9 million from December 31, 2008 as a result of the year to date loss of $4.7 million and the payment of $263,000 of preferred stock dividends. These declines were partially offset by increases in preferred stock of $500,000 resulting from the sale of a portion of our Series A preferred stock in January 2009 and other comprehensive income of $487,000.

On November 3, 2009, the Company's application to list its common stock on The Nasdaq Capital Market was approved. As a result, the Company's common stock was transferred to The Nasdaq Capital Market from The Nasdaq Global Market, effective as of November 6, 2009.

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 and central 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: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; results of examinations of us by the Federal Deposit Insurance Corporation, Michigan Office of Financial and Insurance Regulation or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses or to write-down assets; our ability to control operating costs and expenses, including further FDIC insurance premiums; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect or result in significant declines in valuation; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; our ability to manage loan delinquency rates; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; legislative or regulatory changes that adversely affect our business; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and other risks detailed in the Corporation's reports filed with the Securities and Exchange Commission.

Community Central Bank Corporation (Nasdaq: CCBD) Summary of Selected Financial Data ---------------------------------- Three Months Ended Nine Months Ended September 30, September 30, Unaudited Unaudited Unaudited Unaudited 2009 2008 2009 2008 ------------------- ------------------- (in thousands) (in thousands) OPERATIONS Interest Income Loans $6,510 $6,378 $19,423 $19,242 Taxable Securities 645 954 2,304 2,722 Tax-exempt Securities 74 141 272 517 Federal Funds Sold 9 64 22 373 ------------------- ------------------- Total Interest Income 7,238 7,537 22,021 22,854 Interest Expense Deposits 2,365 2,887 7,721 9,233 Rep Agreement and Fed Funds 327 304 959 823 FHLB Advances 1,015 1,218 3,286 3,692 ESOP Loan Interest -- -- -- 1 Subordinated Debentures 311 195 924 702 ------------------- ------------------- Total Interest Expense 4,018 4,604 12,890 14,451 Net Interest Income 3,220 2,933 9,131 8,403 Provision for Credit Losses 4,400 1,084 9,650 4,068 ------------------- ------------------- Net Interest Income after Provision (1,180) 1,849 (519) 4,335 Non-Interest Income Fiduciary Income 80 82 245 288 Deposit Service Charges 110 109 300 383 Net Realized Security Gains 80 84 436 194 Mortgage Banking Income 623 461 2,384 1,341 Change in Fair Value of Assets/ Liabilities 1,313 1,109 2,383 4,120 Other Income 251 250 715 1,128 ------------------- ------------------- Total Non-Interest Income 2,457 2,095 6,463 7,454 Non-Interest Expense Salaries, Benefits and Payroll Taxes 2,050 1,884 6,231 5,551 Occupancy Expense 424 444 1,304 1,357 Other Operating Expense 2,439 1,549 5,708 4,284 ------------------- ------------------- Total Non-Interest Expense 4,913 3,877 13,243 11,192 Income (loss) Before Taxes (3,636) 67 (7,299) 597 Provision for (benefit from) Income Taxes (1,271) (37) (2,588) (22) ------------------- ------------------- Net Income (loss) (2,365) 104 (4,711) 619 ------------------- ------------------- Dividends declared on preferred shares 107 -- 263 -- ------------------- ------------------- Net income (loss) available to common shares (2,472) 104 (4,974) 619 =================== =================== Community Central Bank Corporation (Nasdaq: CCBD) Summary of Selected Financial Data - continued ---------------------------------------------- Three Nine Months Ended Months Ended September 30, September 30, 2009 2008 2009 2008 ------- ------- ------- ------- (in thousands) (in thousands) PER SHARE DATA Basic Earnings (Loss) per Share ($0.66) $0.03 ($1.33) $0.17 Diluted Earnings (Loss) per Share ($0.66) $0.03 ($1.33) $0.17 Book Value per Common Share $7.20 $8.96 $7.20 $8.96 Basic Average Shares Outstanding (000's) 3,737 3,734 3,736 3,730 Diluted Average Shares Outstanding (000's) 3,737 3,734 3,736 3,732 Actual Shares Outstanding (000's) 3,737 3,735 3,737 3,735 Net Interest Margin (Fully Tax- Equivalent) 2.54% 2.36% 2.39% 2.27% Condensed Balance Sheet Unaudited Audited Sept. 30, Dec. 31, 2009 2008 ----------- ----------- (in thousands) Assets ------ Cash and Equivalents $31,395 $16,162 Investments 74,296 101,407 Residential Mortgage Loans Held for Sale 2,625 3,302 Loans 412,934 407,117 Allowance for Loan Losses (12,195) (7,315) Other Assets 37,726 36,277 ----------- ----------- Total Assets $546,781 $556,950 =========== =========== Liabilities and Stockholders' Equity ------------------------------------ Deposits $370,629 $357,376 Repurchase Agreements 44,771 39,394 Federal Home Loan Bank Advances 87,700 108,200 Other Liabilities 3,364 4,829 Subordinated Debentures 9,842 12,757 Stockholders' Equity 30,475 34,394 ----------- ----------- Total Liabilities and Stockholders' Equity $546,781 $556,950 =========== =========== Condensed balance sheet data contains adjustments for fair value Sept. 30, Dec. 31, 2009 2008 ---------- ---------- (in thousands) OTHER DATA - dollars in thousands Capital Adequacy ---------------- Equity to Total Assets 5.57% 6.18% Tier 1 Leverage Ratio 6.44% 8.21% Tier 1 Capital to Risk-Weighted Assets 8.66% 10.41% Total Capital to Risk-Weighted Assets 12.20% 13.22% Total Capital to Risk-Weighted Assets (Bank) 10.30% 10.54% Credit Quality -------------- Nonaccrual Loans $30,372 $17,584 Loans past due 90 days and still accruing 145 44 ---------- ---------- Total nonperforming loans $30,517 $17,628 ========== ========== Total Troubled Debt Restructuring $15,084 $8,162 Troubled Debt Restructuring - Current $14,347 $4,970 Other Real Estate Owned $6,528 $2,913 Other Repossessed Collateral $421 $976 Allowance for Loan Losses to Total Loans 2.95% 1.80% Allowance for Loan Losses to Non-Performing Loans 39.96% 41.50%
CONTACT: Community Central Bank Corp. Ray Colonius 586 783-4500
View Comments and Join the Discussion!