-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Unyk4JbP1R2uk1z7LxWvvU12fkfQj4yhpasFnfgmxUSZlcZ+OMmhW7xCg0cwqliL 5P1S8j33QrUVeCiLGrjsOw== 0000950124-03-002313.txt : 20030716 0000950124-03-002313.hdr.sgml : 20030716 20030715173636 ACCESSION NUMBER: 0000950124-03-002313 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030715 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMUNITY SHORES BANK CORP CENTRAL INDEX KEY: 0001070523 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 383423227 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-63769 FILM NUMBER: 03788033 BUSINESS ADDRESS: STREET 1: 1838 RUDDIMAN DR CITY: NORTH MUSKEGON STATE: MI ZIP: 49445 BUSINESS PHONE: 2317801800 MAIL ADDRESS: STREET 1: 1838 RUDDIMAN DR CITY: NORTH MUSKEGON STATE: MI ZIP: 49445 8-K 1 k78226e8vk.txt CURRENT REPORT DATED JULY 15, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 15, 2003 -------------------- COMMUNITY SHORES BANK CORPORATION (Exact name of registrant as specified in its charter) MICHIGAN 333-63769 38-3423227 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification Number) 1030 W. NORTON AVENUE, MUSKEGON, MICHIGAN 49441 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 231-780-1800 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. Exhibit Number Description 99.1 Press release of Community Shores Bank Corporation reporting financial results and earnings for the second quarter of 2003 ITEM 9. REGULATION FD DISCLOSURE. The following information is being furnished under Item 12 of Form 8-K, "Results of Operations and Financial Condition," and is included under this Item 9 in accordance with SEC Release No. 33-8216 (March 27, 2003). Earnings Release. On July 15, 2003, Community Shores Bank Corporation issued a press release reporting earnings and other financial results for its second quarter of 2003, which ended June 30, 2003. A copy of the press release is attached as Exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COMMUNITY SHORES BANK CORPORATION By: /s/ TRACEY A. WELSH ----------------------------------------- Tracey A. Welsh Vice President and Chief Financial Officer Date: July 15, 2003 EXHIBIT INDEX Exhibit Number Description 99.1 Press release of Community Shores Bank Corporation reporting earnings and other financial results for the second quarter of 2003. EX-99.1 3 k78226exv99w1.txt PRESS RELEASE For release: July 15, 2003 COMMUNITY SHORES REPORTS SECOND QUARTER EPS MUSKEGON, MI - July 15, 2003 - Community Shores Bank Corporation (OTC: CSHB), Muskegon's only locally-headquartered independent community banking organization, today reported net income for the quarter ended June 30, 2003 of $139 thousand, compared to $171 thousand for the prior year second quarter. Earnings for the second quarter of 2003 included federal income tax expense of $72 thousand; this marks the first quarter of fully taxable earnings for Community Shores. Pretax income was $211 thousand, an increase of 23.7% over the second quarter of 2002. Diluted earnings were $0.09 per share, compared to $0.14 reported last year. Per share results were impacted by Community Shores' fully taxable status as well as a series of private placements over the past year, which increased average shares outstanding by 18.5% to 1,430,000. For the first half of 2003, net income was $648 thousand, an increase of 92.7% above the first half of 2002. Diluted earnings per share were $0.44 compared with $0.28 for the prior year first half. 2003 results benefited from a one-time tax credit of $327 thousand taken in the first quarter from the effect of prior losses accumulated during the first seven quarters of operation. In addition, per share results were impacted by a 17.0% increase in average shares outstanding to 1,390,221. Jose A. Infante, President and CEO, stated, "This quarter, we achieved an important milestone. After eleven quarters of profitable growth, we are paying taxes for the first time. Although this will impact after-tax comparisons for the remainder of the year, our 24% pre-tax income growth is more reflective of the strength of our performance. "We have begun a more active program to reach the institutional investor community, as well as continuing with our traditional focus on retail shareholders, and we have seen positive results. Year-to-date, our share price has appreciated 28.1%, ending the June 2003 quarter at $10.25. "We are very pleased to have successfully managed our young company through a variety of economic conditions and interest rate environments. Our strong service culture, which has served as a magnet to customers accustomed to dealing with the larger regional-based bank holding companies, continues to drive our growth, attract new clients and build stronger, broader relationships. Our latest new business campaign, initiated in April of this year, has already attracted 45 new small business customers." Net interest income increased 7.9% to $1.5 million and reflected 11.9% growth in average earning assets, partially offset by a 13 basis point decline in the net interest margin to 3.27%. Mr. Infante noted, "Declining interest rates continue to challenge our net interest margin, but our on-going ALCO initiatives have successfully minimized the full impact of prime rate reductions in the past twelve months, allowing us to operate within a relatively narrow margin band ." Non-interest income was $283 thousand, a 31.7% increase over the $215 thousand reported for the second quarter of 2002. Mr. Infante commented, "Mortgage activity and new business relationships are feeding our fee income growth, providing diversity to our revenue stream." Non-interest income increased to 10% of total revenue, up from 7.8% for the prior year quarter. Income from our mortgage banking business increased 106.1%, while service charges on deposit accounts were up 14.6%. Non-interest expense totaled $1.4 million for the current quarter, an increase of 9.8% over the $1.2 million reported in the year-ago period. Salaries and benefits, up 14.5%, accounted for most of the dollar increase and reflected annual salary adjustments and rising health care costs. Data processing costs, up 24.8%, supported increased internet banking activity. Attention to expense management resulted in modest changes to other categories. The efficiency ratio improved to 78.01% from 78.96%. At June 30, 2003, assets were $185.6 million, an increase of 11.7% above the year-ago quarter, and were driven by loan growth of 14.0%, or $18.5 million. Mr. Infante commented, "We are being prudent in adding credits to our loan portfolio. The quality growth we achieved over the last twelve months is derived mainly from the commercial side." Loan growth was funded primarily through 13.6% growth in deposits, including non-interest bearing deposits, which increased 18.6%. Mr. Infante noted that the local economy is showing signs of stabilizing and that Community Shores is still maintaining solid asset quality supported by adequate reserve coverage. Past-due and non-accrual loans were 0.66% of total loans at June 30, 2003, up from 0.63% for the first quarter and from 0.53% twelve months ago. Annualized net charge-offs were 0.14% of average loans for the second quarter of 2003, compared to 0.57% for the sequential quarter and 0.20% for the prior year second quarter. The allowance for loan and lease losses was 1.33% of total loans at June 30, 2003. Shareholders' equity totaled $12.4 million at June 30, 2003, up $2.3 million from twelve months ago. Community Shores remains a "well-capitalized" institution; Tier I capital was 6.58% for the quarter compared to 5.88% a year ago. Shares outstanding at period-end were 1,430,000. ABOUT THE COMPANY With $186 million in assets, 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 achieved eleven consecutive quarters of profitability. SAFE HARBOR STATEMENT This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, continued softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company's business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release. Contact: Jose A. Infante President and CEO 231/780-1800 jinfante@communityshores.com Tracey Welsh Vice President and CFO 231/780-1847 twelsh@communityshores.com Linda Margolin (Media) 216/765-0953 lmm@margolinIR.com COMMUNITY SHORES CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS
QUARTERLY ------------------------------------------------------------------------ 2003 2003 2002 2002 2002 (dollars in thousands except per share data) 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR ------------- ------------- ------------- ------------- ------------- EARNINGS Net interest income 1,465 1,454 1,412 1,408 1,357 Provision for loan and lease losses 173 189 183 154 160 Noninterest income 283 299 266 235 215 Noninterest expense 1,363 1,382 1,245 1,252 1,241 Net Income 139 509 251 236 171 Basic earnings per share 0.10 0.38 0.19 0.19 0.14 Diluted earnings per share 0.09 0.38 0.19 0.19 0.14 Average shares outstanding 1,430,000 1,350,000 1,327,215 1,269,402 1,207,088 Average diluted shares outstanding 1,528,415 1,350,000 1,327,215 1,269,402 1,207,088 PERFORMANCE RATIOS Return on average assets 0.30% 1.13% 0.58% 0.57% 0.41% Return on average common equity 4.51% 17.69% 9.28% 9.17% 7.12% Net interest margin 3.27% 3.33% 3.40% 3.51% 3.40% Efficiency ratio 78.01% 81.74% 74.16% 76.24% 78.96% Full-time equivalent employees 47 52 54 51 48 CAPITAL Average equity to average assets 6.64% 6.38% 6.28% 6.18% 5.78% Tier 1capital ratio to average assets 6.58% 6.68% 6.24% 6.05% 5.88% Book value per share $ 8.68 $ 8.57 $ 8.32 $ 8.18 $ 7.96 ASSET QUALITY Gross loan charge-offs 174 257 136 99 67 Net loan charge-offs 51 206 117 92 64 Net loan charge-offs to avg loans (annualized) 0.14% 0.57% 0.33% 0.28% 0.20% Allowance for loan and lease losses 2,004 1,882 1,899 1,833 1,772 Allowance for losses to total loans 1.33% 1.28% 1.34% 1.36% 1.34% Past due and nonaccrual loans (90 days) 989 923 838 1,361 707 Past due and nonaccrual loans to total loans 0.66% 0.63% 0.59% 1.00% 0.53% Other real estate and repossessed assets 119 65 39 27 31 END OF PERIOD BALANCES Loans 150,681 147,389 142,033 135,687 132,224 Total earning assets 177,366 178,366 168,343 164,400 160,191 Total assets 185,621 188,737 173,466 174,797 166,146 Deposits 147,858 148,396 132,725 135,144 130,166 Shareholders' equity 12,406 12,256 11,066 10,418 10,059 AVERAGE BALANCES Loans 150,357 145,030 139,970 133,563 129,167 Total earning assets 178,888 174,635 168,831 160,393 159,821 Total assets 185,464 180,582 172,300 166,342 166,030 Deposits 147,086 137,309 131,677 130,642 131,249 Shareholders' equity 12,316 11,521 10,821 10,280 9,590
COMMUNITY SHORES BANK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED ENDED 06/30/03 06/30/02 06/30/03 06/30/02 ------------ ------------ ---------- ---------- INTEREST AND DIVIDEND INCOME Loans, including fees $ 2,314,905 $2,262,911 $4,610,404 $4,422,761 Securities (including FHLB dividends) 225,550 327,932 473,303 661,219 Federal funds sold and other interest income 7,057 22,021 18,926 83,724 ----------- ---------- ---------- ---------- Total interest income 2,547,512 2,554,840 5,102,633 5,167,704 INTEREST EXPENSE Deposits 900,012 1,042,392 1,787,879 2,120,640 Repurchase agreements and federal funds purchased and other debt 56,182 72,044 134,102 157,030 Federal Home Loan Bank advances and notes payable 126,757 141,584 262,427 280,460 ----------- ---------- ---------- ---------- Total interest expense 1,082,951 1,256,020 2,184,408 2,558,130 NET INTEREST INCOME 1,464,561 1,356,844 2,918,225 2,609,574 Provision for loan losses 173,000 159,940 361,990 287,740 ----------- ---------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,291,561 1,196,904 2,556,235 2,321,834 Noninterest income Service charges on deposit accounts 146,345 127,680 275,518 227,353 Mortgage loan referral fees 7,201 23,981 12,386 68,916 Gain on sale of loans 67,364 12,205 116,678 14,283 Gain (loss) on disposition of securities 0 0 62,681 0 Other 61,764 50,846 114,769 90,611 ----------- ---------- ---------- ---------- Total noninterest income 282,674 214,712 582,032 401,163 Noninterest expense Salaries and employee benefits 752,996 657,363 1,521,787 1,276,786 Occupancy 74,633 69,925 150,453 141,301 Furniture and equipment 112,255 112,131 227,532 222,998 Advertising 17,914 22,667 40,269 36,878 Data Processing 75,550 60,560 147,644 117,686 Professional services 78,849 74,249 145,803 116,533 Other 250,885 244,021 511,349 474,444 ----------- ---------- ---------- ---------- Total noninterest expense 1,363,082 1,240,916 2,744,837 2,386,626 INCOME BEFORE INCOME TAXES 211,153 170,700 393,430 336,371 Federal income tax expense (benefit) 72,468 0 (254,716) 0 ----------- ---------- ---------- ---------- NET INCOME $ 138,685 $ 170,700 $ 648,146 $ 336,371 =========== ========== ========== ========== Weighted average shares outstanding 1,430,000 1,207,088 1,390,221 1,188,646 =========== ========== ========== ========== Basic income per share $ 0.10 $ 0.14 $ 0.47 $ 0.28 =========== ========== ========== ========== Diluted income per share $ 0.09 $ 0.14 $ 0.44 $ 0.28 =========== ========== ========== ==========
COMMUNITY SHORES BANK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
JUNE 30, DECEMBER 31 JUNE 30, 2003 2002 2002 (UNAUDITED) (AUDITED) (UNAUDITED) ----------- ----------- ----------- ASSETS Cash and due from financial institutions $ 5,403,197 $ 2,722,565 $ 3,633,406 Interest-bearing deposits in other financial institutions 60,779 59,429 102,615 Federal funds sold 1,000,000 0 3,750,000 ------------ ------------ ------------ Total cash and cash equivalents 6,463,976 2,781,994 7,486,021 Securities Available for sale 25,329,814 26,043,017 23,637,478 Held to maturity 294,635 252,567 51,429 ------------ ------------ ------------ Total securities 25,624,449 26,295,584 23,688,907 Loans held for sale 545,300 579,400 0 Loans 150,135,690 141,453,620 132,224,247 Less: Allowance for loan losses 2,004,118 1,898,983 1,771,825 ------------ ------------ ------------ Net loans 148,131,572 139,554,637 130,452,422 Federal Home Loan Bank stock 425,000 425,000 425,000 Premises and equipment, net 2,749,189 2,910,237 3,038,072 Accrued interest receivable 634,336 661,136 708,873 Other assets 1,047,673 257,956 347,112 ------------ ------------ ------------ Total assets $185,621,495 $173,465,944 $166,146,407 ------------ ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non interest-bearing $ 13,635,800 $ 10,368,525 $ 11,499,780 Interest-bearing 134,222,688 122,356,854 118,866,686 ------------ ------------ ------------ Total deposits 147,858,488 132,725,379 130,166,466 Federal funds purchased and repurchase agreements 14,086,235 19,466,513 15,583,508 Federal Home Loan Bank advances 8,000,000 6,000,000 6,000,000 Notes payable 2,550,000 3,600,000 3,600,000 Accrued expenses and other liabilities 720,834 608,179 737,293 ------------ ------------ ------------ Total liabilities 173,215,557 162,400,071 156,087,267 Shareholders' Equity Preferred Stock, no par value: 1,000,000 shares authorized and none issued 0 0 0 Common Stock, no par value: 9,000,000 shares authorized, March 31, 2003-1,430,000 issued; December 31, 2002- 1,330,000 issued and March 31, 2002-1,170,000 issued 12,922,314 12,123,585 11,609,759 Retained deficit (719,765) (1,367,911) (1,854,560) Accumulated other comprehensive income 203,389 310,199 303,941 ------------ ------------ ------------ Total shareholders' equity 12,405,938 11,065,873 10,059,140 ------------ ------------ ------------ Total liabilities and shareholders' equity $185,621,495 $173,465,944 $166,146,407 ============ ============ ============
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