Community Central Bank Corporation Announces Q2 Earnings4 August 2006
Community Central Bank Corporation (Nasdaq: CCBD), the holding company for Community Central Bank, today reported earnings for the second quarter and six months ended June 30, 2006.
Net income for the second quarter of 2006 decreased 24.0% to $631,000, or $0.16 per diluted share, from $830,000, or $0.23 per diluted share for the second quarter ended 2005. Net income for the first six months of 2006 decreased 15.7% to $1,334,000, or $0.34 per diluted share, compared to $1,582,000, or $0.44 per diluted share, for the six months ended June 30, 2005. Net income was lower in the second quarter of 2006 compared to 2005 due in part to the startup and operational costs associated with the implementation of the trust and wealth management division as well as the opening of the Grosse Pointe hub.
David A. Widlak, President and CEO commented, "We achieved a significant milestone as we approach our tenth anniversary, reaching one-half billion dollars in total assets. We are pleased that our performance is consistent with our plan to integrate trust and wealth management with our core banking business. As of June 30, 2006, our trust and wealth management division reached $95.4 million in assets under management. Our new Grosse Pointe banking hub is operational and growing. We are proud of the strong loan growth we posted for the first six months of 2006, which included a 10.4% growth in our commercial lending portfolios. We continue to focus on serving our core customer base with exceptional full banking, trust and wealth management services and feel we can compete effectively with any bank large or small. We continue to look at opportunities to expand our deposit base through areas such as our Grosse Pointe banking hub and to continued growth in our commercial lending areas."
Net interest income was $3.2 million during the second quarter of 2006, an increase of $42,000 compared to the second quarter of 2005. The increase when measured on a taxable equivalent basis was $131,000, or 4.0%, over the second quarter 2005. The increase was attributable to growth in earning assets, partially offset by net interest margin compression. Net interest margin for the second quarter was 2.91%, as measured on a tax equivalent basis, compared with 3.00% for the first quarter of 2006 and 3.32% for the second quarter of 2005. The decrease in net interest margin was primarily the result of higher deposit funding costs in a highly competitive deposit-pricing environment. Additionally, the flat treasury yield curve produced an interest rate environment that resulted in lower incremental interest rate spreads on new loan and investment growth.
Net interest income was $6.4 million for the six months ended June 30, 2006, an increase of $83,000 over the first six months of 2005. The net interest income, when measured on a taxable equivalent basis increased $271,000, or 4.2% over the same period.
A $125,000 and $175,000 provision were made to the allowance for the second quarter and first six months of 2006, respectively. This was based upon management's review of the risks inherent in the loan portfolio and the level of our allowance for loan losses. Net loan charge-offs for the first six months of 2006 totaled $85,000, or 5 basis points on an annualized basis. Total nonperforming loans as a percentage of total loans was 0.74% at June 30, 2006, compared with 0.99% at December 31, 2005. The allowance for loan losses was $3.7 million at June 30, 2006, or 1.00% of total loans and 135.42% of nonperforming loans, versus $3.6 million, or 1.07% and 108.10% at December 31, 2005, respectively.
Noninterest income in the second quarter of 2006 was $1.3 million, an increase of $126,000, or 10.7%, compared to the second quarter of 2005. The increase was primarily due to fee income of $65,000 generated from the Bank's Trust division and $52,000 from an increase in mortgage banking income comprising primarily gains on the sale of residential mortgages. The Bank acquired the Trust division through the purchase of River Place Financial Corporation in July of 2005. The Trust and Wealth Management division of the Bank had approximately $95.4 million assets under management as of June 30, 2006 compared to $87.3 million at December 31, 2005. Other income of $183,000 increased $19,000 for the second quarter of 2006, compared to the second quarter of 2005, due to increased income from the purchase of additional bank owned life insurance.
Noninterest income for the six months ended June 30, 2006 of $2.5 million increased $382,000 or 18.0%, over the six months ended June 30, 2005. The largest contributor to the increase was mortgage-banking income of $1.8 million, which increased $204,000 from the six months ended June 30, 2005 due to increases in loan origination volume. The additional origination volume for the first six months was due in part from expanded residential loan production offices. Fiduciary income of $132,000 was the second largest reason for the increase in noninterest income. Again, as mentioned previously the Trust division did not start until July of 2005. Deposit service charge income of $170,000 increased $22,000, or 14.9%, for the first six months of 2006 compared to 2005 for the same respective period due to an overdraft privilege program instituted in late 2005. No net security gains were recorded for the first six months of 2006 compared to 2005 when $50,000 in net security gains was recorded. Net securities gains in 2005 were generated from restructuring activities. Other income of $382,000 increased $74,000 for the first six months of 2006, compared to the first six months of 2005, due primarily to increased income from the purchase of additional bank owned life insurance.
Noninterest expense was $3.6 million for the second quarter of 2006 compared to $3.2 million for the second quarter of 2005, an increase of $440,000, or 13.7%. The increase was largely due to an increase of $301,000 in salary, benefits and payroll taxes from the new Trust and Wealth Management divisions, coupled with the startup and operational costs related to the new Grosse Pointe Branch and expansion into new out of state residential mortgage loan production offices. Net Occupancy expense of $447,000 increased $50,000, or 12.6%, due primarily to the expansion of the Mortgage Company's loan production offices, with the remaining increase attributable to utility costs, increased depreciation expense of the new headquarters, and general costs of expanded operations of the Corporation and its subsidiaries.
Noninterest expense for the first six months of 2006 of $7.1 million increased $967,000, or 15.9% compared to the first six months of 2005. All categories of noninterest expense for the first six months of 2006 increased primarily due to startup and operational costs in trust, wealth management, new residential loan production offices and establishment of the new Grosse Pointe banking hub location. The largest portion of the increase in noninterest expense occurred in salaries, benefits and payroll taxes of $4.2 million for the six months ended June 30, 2006, which increased $652,000 over the first six months of 2005.
At June 30, 2006, the Corporation's total assets were $504.4 million, an increase of $42.4 million from December 31, 2005. Total loans of $368.5 million increased $33.5 million, or 10.0% from December 31, 2005. The largest area of loan growth occurred in commercial real estate loans, which increased $26.4 million over the same period. Total deposits of $352.6 million increased $38.2 million, or 12.2%, over December 31, 2005, with all of the growth occurring in time deposits, which increased $40.2 million. The largest segment of time deposit growth occurred in brokered and internet time deposits increasing $26.2 million for the first six months of 2006. Total stockholders' equity increased $217,000 to $35.7 million at June 30, 2006. The increase in equity was primarily due to net income for the quarter, offset by cash dividends paid and increased unrealized losses from the security portfolio.
The Corporation recently paid a 5% stock dividend, payable June 1, 2006, to shareholders of record on May 1, 2006. Average and outstanding shares have been retroactively adjusted for stock dividends.
About the Company: 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 three full service facilities, in Mount Clemens, Rochester Hills and Grosse Pointe, Michigan. Community Central Mortgage Company, LLC, a subsidiary of the Corporation and Bank, operates locations servicing the Detroit metropolitan area; Central and Northwest Indiana; Northern Illinois; and Raleigh, North Carolina. 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; 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; changes in the national and local economy; 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 (NNM:CCBD)
Summary of Selected Financial Data
Three months ended Six months ended
June 30, June 30,
Unaudited Unaudited Unaudited Unaudited
2006 2005 2006 2005
(In thousands) (In thousands)
OPERATIONS
Interest income
Loans $6,710 $5,152 $12,738 $9,973
Taxable securities 809 556 1,580 1,028
Tax-exempt securities 321 146 599 234
Federal funds sold 24 48 61 94
Total interest income 7,864 5,902 14,978 11,329
Interest expense
Deposits 3,275 1,842 5,975 3,396
Rep Agreement and
Fed Funds 95 39 188 78
FHLB Advances 1,029 647 1,988 1,210
ESOP loan interest 2 3 5 6
Subordinated debentures 232 182 447 347
Total interest expense 4,633 2,713 8,603 5,037
Net Interest Income 3,231 3,189 6,375 6,292
Provision for credit losses 125 ---- 175 100
Net Interest Income
after Provision 3,106 3,189 6,200 6,192
Noninterest income
Fiduciary income 65 ---- 132 ----
Deposit service charges 88 78 170 148
Net realized
security gains ---- 20 ---- 50
Mortgage banking income 966 914 1,820 1,616
Other income 183 164 382 308
Total noninterest income 1,302 1,176 2,504 2,122
Noninterest expense
Salaries, benefits and
payroll taxes 2,066 1,765 4,171 3,519
Occupancy expense 447 397 913 753
Other operating expense 1,128 1,039 1,973 1,818
Total noninterest
expense 3,641 3,201 7,057 6,090
Income before taxes 767 1,164 1,647 2,224
Provision for income taxes 136 334 313 642
Net Income $631 $830 $1,334 $1,582
======= ======= ====== ======
Memo: Net interest income
(fully tax-equivalent) 3,397 3,266 6,686 6,415
Three months ended Six months ended
June 30, June 30,
2006 2005 2006 2005
PER SHARE DATA
Basic earnings per share $0.16 $0.23 $0.35 $0.46
Diluted earnings per share $0.16 $0.23 $0.34 $0.44
Book value per share $9.28 $9.10 $9.28 $9.10
Basic average shares
outstanding (000's) 3,829 3,588 3,821 3,471
Diluted average shares
outstanding (000's) 3,895 3,686 3,887 3,566
Actual shares
outstanding (000's) 3,852 3,831 3,852 3,831
Net interest margin
(fully tax-equivalent) 2.91% 3.32% 2.96% 3.35%
Average and outstanding shares have been retroactively adjusted for stock dividends.
Condensed Balance Sheet
Unaudited Audited
June 30, December 31,
2006 2005
(In thousands)
Assets
Cash and equivalents $10,025 $11,000
Investments 99,667 89,602
Residential mortgage loans held for sale 3,166 4,286
Loans 368,483 334,951
Allowance for loan losses (3,670) (3,580)
Other Assets 26,766 25,753
Total Assets $504,437 $462,012
======= =======
Liabilities and stockholders' equity
Deposits $352,580 $314,373
Repurchase agreements 10,790 13,184
Federal Home Loan Bank advances 92,545 86,545
Other liabilities 2,463 2,068
Subordinated debentures 10,310 10,310
Stockholders' equity 35,749 35,532
Total Liabilities and
Stockholders' Equity $504,437 $462,012
======= =======
OTHER DATA
Allowance for loan losses to total loans 1.00% 1.07%
Nonperforming loans to total loans 0.74% 0.99%
Nonperforming assets to total assets 0.55% 0.74%
Allowance for loan losses to
nonperforming loans 135.42% 108.10%
Stockholders' equity to total assets 7.09% 7.69%
Tier 1 Leverage Ratio 9.25% 9.94%
Source: prnewswire
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