Community Central Bank Corporation Announces Profitable Q2 Results

MOUNT CLEMENS, Mich., July 23 /PRNewswire-FirstCall/ -- Community Central
Bank Corporation (Nasdaq: CCBD), the holding company for Community Central
Bank, today reported earnings for the quarter ended June 30, 2008. Net income
for the second quarter of 2008 was $275,000, or $0.07 per diluted share,
compared to $536,000, or $0.14 per diluted share, for the second quarter ended
2007. Net income for the six months ended June 30, 2008 was $515,000, or $0.14
per diluted share, compared to net income of $1,194,000, or $0.30 per diluted
share, for the six months ended June 30, 2007.
David A. Widlak, President and CEO commented, "We expect that our
continued profitability, coupled with our additional capital availability from
the Bank Holding Company will give us opportunities for growth as we go
forward. Despite the current economic challenges we continue to execute our
business plan, which includes revenue diversification, development of core
deposits and the reduction of nonperforming assets. We are proactively
addressing the weaknesses in our loan portfolio related to the Michigan
economy and our real estate markets. We realize that we cannot rely solely on
an eventual local economic upturn as our solution to increasing returns for
our shareholders. We must continue to focus on those activities which grow
revenue while protecting our valuable capital."
Mr. Widlak went on to state: "At June 30, 2008, we remained 'Well
Capitalized,' the highest ranking of regulatory capital. We were encouraged by
a decrease in nonperforming assets from the first quarter of this year.
However, we remain cognizant of our economic environment and continue to
expand our efforts to reduce current levels of nonperforming assets and
mitigate any future deterioration in the loan portfolio. While our provision
for loan losses was historically larger than normal, it was less than half the
provision of the first quarter of 2008. Net interest margin has been affected
by the large drop in short term interest rates, which reduced the yield on our
loans, the price competition for deposits in our markets and the level of
nonaccruing loans. We do expect interest margin improvement in upcoming
quarters as time deposits continue to reprice down from relative higher
levels. Our Trust and Wealth Management divisions continue to grow, producing
a larger relative portion of revenue. While core deposit growth continues to
be a challenging task, we were encouraged by the growth in demand deposits
which ended June 30, 2008 at $40.4 million or 12.2% of total deposits."
We recorded an $884,000 provision for loan losses in the second quarter of
2008, based upon management's review of the risks inherent in the loan
portfolio and the level of our allowance for loan losses. Total nonperforming
assets as a percentage of total assets was 4.15% at June 30, 2008, compared to
4.28% at March 31, 2008 and 3.56% at December 31, 2007. The allowance for
loan losses at June 30, 2008 was $7.0 million, or 1.78% of total loans and
34.97% of nonperforming loans, versus $6.4 million, or 1.64% and 36.21% at
December 31, 2007, respectively.
Noninterest income was $2.2 million for the second quarter of 2008,
increasing $1.0 million, or 88.6%, from the second quarter of 2007. The
increase was primarily related to a net increase in the fair market value of
assets and liabilities as measured under Statement of Financial Accounting
Standards (SFAS 159). The increase was largely attributable to the fair value
of the subordinated debenture connected with the February 2007 Trust Preferred
Issuance. The net change in fair value, which was largely associated with this
instrument and the corresponding interest rate swap, totaled $872,000 in
unrealized gains for the second quarter of 2008, as recorded in other income.
The widening of market credit spreads for trust preferred securities
experienced in the second quarter of 2008 increased the relative fair value of
this financial liability dramatically. The Corporation hedges against changes
in interest rates with an interest rate swap, which is also accounted for
under SFAS 159. The hedge does not cover changes in credit spreads, which
typically occur over much longer periods of time than we are currently
experiencing. 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. Noninterest income was $5.4 million for the first six
months of 2008, increasing $2.8 million, or 109.1%, from the first six months
of 2007. The increase was largely attributable to the aforementioned net
change in fair value over the six month period.
Noninterest expense was $3.8 million for the second quarter of 2008,
increasing $352,000, or 10.3%, from the second quarter of 2007. Decreases in
salaries and benefits of $68,000, or 3.6%, from staffing reductions, were
offset by an increase in other expense of $433,000, or 41.7%. These other
expenses included valuation charges incurred on foreclosed property and legal
expense on loan workouts. Noninterest expense was $7.3 million for the first
six months of 2008, increasing $449,000, or 6.5%, again resulting from
increases in valuation costs incurred on foreclosed property and other workout
related costs, which exceeded cost-savings achieved in other expense areas.
At June 30, 2008, the Corporation's total assets were $532.3 million, an
increase of $12.0 million from December 31, 2007. Total loans of $394.2
million increased slightly, up $4.3 million, or 1.1%, from December 31, 2007.
Increases in commercial loans were partially offset by decreases in all other
loan categories. Total deposits of $330.1 million increased $1.5 million, or
0.5%, for the first half of 2008. Increases for the first six months were
primarily comprised of noninterest bearing demand deposits of $8.7 million,
offset by decreases in time deposits of $8.5 million, with other deposit
categories posting smaller net changes. Total stockholders' equity of $33.2
million remained relatively unchanged from December 31, 2007 as increases in
retained earnings were offset by decreases in accumulated other comprehensive
income as a result of changes in the market value of available-for-sale
securities.
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 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: changes in interest rates and interest-rate
relationships; changes in the national and local economy; demand for products
and services; the degree of competition by traditional and non-traditional
competitors; changes in banking regulations; changes in tax laws; changes in
prices, levies, and assessments; our ability to successfully integrate
acquisitions into our existing operations, and the availability of new
acquisitions, joint ventures and alliance opportunities; 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; and other factors included in Community Central Bank
Corporation's filings with the Securities and Exchange Commission, available
free via EDGAR. The Corporation assumes no responsibility to update
forward-looking statements.

Community Central Bank Corporation (NasdaqGM: CCBD)
Summary of Selected Financial Data

Three months ended Six months ended
June 30, June 30,
Unaudited Unaudited Unaudited Unaudited
2008 2007 2008 2007
(In thousands) (In thousands)
OPERATIONS
Interest income
Loans $6,373 $6,885 $12,864 $13,737
Taxable securities 942 805 1,768 1,472
Tax-exempt securities 147 413 376 747
Federal funds sold 54 131 309 386

Total interest income 7,516 8,234 15,317 16,342

Interest expense
Deposits 2,965 3,434 6,346 7,154
Rep Agreement and Fed Funds 289 233 519 393
FHLB Advances 1,248 975 2,474 1,896
ESOP loan interest 1 2 1 4
Subordinated debentures 216 559 507 953

Total interest expense 4,719 5,203 9,847 10,400

Net Interest Income 2,797 3,031 5,470 5,942

Provision for credit losses 884 175 2,984 225

Net Interest Income after
Provision 1,913 2,856 2,486 5,717

Noninterest income
Fiduciary income 98 111 206 198
Deposit service charges 142 92 274 180
Net realized security gains 49 (13) 110 (13)
Mortgage banking income 430 594 880 1,348
Other income 1,440 361 3,889 850

Total noninterest income 2,159 1,145 5,359 2,563

Noninterest expense
Salaries, benefits and
payroll taxes 1,835 1,903 3,667 4,046
Occupancy expense 452 465 913 917
Other operating expense 1,471 1,038 2,735 1,903

Total noninterest expense 3,758 3,406 7,315 6,866

Income before taxes 314 595 530 1,414

Provision for income taxes 39 59 15 220

Net Income $275 $536 $515 $1,194

Community Central Bank Corporation (NasdaqGM: CCBD)
Summary of Selected Financial Data - continued

Three months ended Six months ended
June 30, June 30,
2008 2007 2008 2007
PER SHARE DATA
Basic earnings per share $0.07 $0.14 $0.14 $0.30
Diluted earnings per share $0.07 $0.14 $0.14 $0.30
Book value per share $8.89 $8.96 $8.89 $8.96
Basic average shares
outstanding (000's) 3,731 3,868 3,729 3,925
Diluted average shares
outstanding (000's) 3,735 3,919 3,731 3,981
Actual shares outstanding
(000's) 3,735 3,796 3,735 3,796

Net interest margin (fully
tax-equivalent) 2.28% 2.72% 2.23% 2.66%

Condensed Balance Sheet
Unaudited Audited
June 30, December 31,
2008 2007
(In thousands)
Assets
Cash and equivalents $14,171 $9,183
Investments 80,144 73,313
Trading Securities 17,442 20,115
Residential mortgage loans held for sale 1,930 4,848
Loans 394,216 389,912
Allowance for loan losses (7,019) (6,403)
Other Assets 31,435 29,337

Total Assets $532,319 $520,305

Liabilities and Stockholders' Equity
Deposits $330,116 $328,635
Repurchase agreements 32,928 32,659
Federal Home Loan Bank Advances 117,510 104,495
Other liabilities 4,015 3,691
Subordinated debentures 14,548 17,597
Stockholders' equity 33,202 33,228

Total Liabilities and Stockholders' Equity $532,319 $520,305

Condensed balance sheet data contains adjustments for fair value option
SFAS 159
OTHER DATA
Allowance for loan losses to total loans 1.78% 1.64%
Allowance for loan losses to nonperforming loans 34.97% 36.21%
Nonperforming loans to total loans 5.09% 4.54%
Nonperforming assets to total assets 4.15% 3.56%
Stockholders' equity to total assets 6.24% 6.39%
Tier 1 Leverage Ratio 8.09% 8.37%

SOURCE Community Central Bank Corporation

Ray Colonius of Community Central Bank Corp., +1-586-783-4500, or Mike
Marcotte of Marcotte Financial Relations, +1-248-656-3873