EX-99.1 2 k96975exv99w1.txt PRESS RELEASE FOR THE SECOND QUARTER OF 2005 Exhibit 99.1 [COMMUNITY SHORES BANK LOGO] COMMUNITY SHORES REPORTS SECOND QUARTER EARNINGS PER SHARE OF $0.23, UP 109.1% MUSKEGON, Mich., July 25 -- Community Shores Bank Corporation (Nasdaq: CSHB), Muskegon's only locally-headquartered independent community banking organization, today reported second quarter 2005 net income of $342.5 thousand compared with $154.3 thousand earned in the second quarter of 2004, an increase of 122.0%. Diluted earnings per share were $0.23 compared with $0.11 for the year-ago quarter, an increase of 109.1%. For the first six months of 2005, the Company reported net income of $704.7 thousand compared with $323.4 thousand earned in the first six months of 2004, an increase of 117.9%. Diluted earnings per share were $0.48 compared with $0.22 for the prior-year period, an increase of 118.2%. Jose A. Infante, Chairman, President and CEO, commented, "Strong loan growth has continued into the second quarter of 2005, enabling us to achieve another quarter of solid performance and outstanding year-over-year earnings growth. We see numerous opportunities for expansion as the Muskegon economy continues to improve and our reputation for high-quality service gains greater recognition in the local community." Total revenue, consisting of net interest income and non-interest income, was $2.3 million for the second quarter of 2005, an increase of 30.7% over the prior-year second quarter. Net interest income increased 33.7% to $2.0 million, reflecting a 67 basis point increase in the net interest margin to 3.96% and a 13.5% increase in average earning assets. Mr. Infante noted, "Funding pressures capped our ability to expand the margin further this quarter; however, we are very pleased with the improvement we've reported throughout 2005 and are satisfied to maintain this expanded margin steady in a challenging interest rate environment." Non-interest income was $310.6 thousand compared with $272.1 thousand for the year-ago quarter, an increase of 14.2%. The majority of the growth in fee income can be attributed to the overdraft privilege product launched in December, 2004, partially offset by declines in mortgage banking income and securities gains. Non-interest expense totaled $1.7 million for the second quarter of 2005, 21.6% higher than the second quarter of 2004. Salaries and employee benefits, up $113.3 thousand or 14.4%, and other expense, up $100.1 thousand or 43.0%, accounted for the majority of the increase. The efficiency ratio for the second quarter of 2005 improved to 72.15% from 78.02% for the year-ago quarter. Assets at June 30, 2005 totaled $222.8 million compared with $184.4 million twelve months ago, an increase of 20.8%. Loans held for investment grew $26.1 million or 16.2% during the past twelve months, reaching $186.9 million at June 30, 2005. Deposits increased $39.1 million or 25.6%, to $191.6 million for the same 12-month period. Mr. Infante continued, "Credit quality remains strong despite our robust level of loan growth." Nonperforming assets were 0.47% of period-end assets at June 30, 2005, down from 0.76% twelve months ago. Net charge-offs for the current quarter were $74,000, or an annualized 0.16% of average loans, compared with $8,000, or 0.02%, for the prior-year quarter. The allowance for loan and lease losses was 1.15% of total loans at June 30, 2005. Shareholders' equity totaled $14.1 million at June 30, 2005, up $1.3 million from twelve months ago. Tier I capital was 6.76% for the second quarter 2005 period compared with 6.78% for the second quarter of 2004. Shares outstanding at period-end were 1,432,800. About the Company With $223 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 nineteen consecutive quarters of profitability. Forward Looking Statement 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. CONTACT: Jose A. Infante, Chairman, President and CEO, +1-231-780-1800, or jinfante@communityshores.com, or Tracey Welsh, Senior Vice President and CFO, +1-231-780-1847, or twelsh@communityshores.com, both of Community Shores Bank Corporation; Media, Linda Margolin of Margolin & Associates, Inc., +1-216-932-1755, or Lmm@margolinIR.com/ COMMUNITY SHORES BANK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
JUNE 30, DECEMBER 31, JUNE 30, 2005 2004 2004 (UNAUDITED) (AUDITED) (UNAUDITED) ------------- ------------- ------------- ASSETS Cash and due from financial institutions $ 6,644,959 $ 2,214,088 $ 3,785,525 Interest-bearing deposits in other financial institutions 278,224 161,527 404,420 Federal funds sold 6,650,000 0 0 ------------- ------------- ------------- Total cash and cash equivalents 13,573,183 2,375,615 4,189,945 Securities Available for sale 15,274,110 16,530,818 15,872,080 Held to maturity 3,359,398 399,523 464,548 ------------- ------------- ------------- Total securities 18,633,508 16,930,341 16,336,628 Loans held for sale -- -- 89,000 Loans 186,856,712 171,451,202 160,773,838 Less: Allowance for loan losses 2,154,519 2,039,198 2,067,443 ------------- ------------- ------------- Net loans 184,702,193 169,412,004 158,706,395 Federal Home Loan Bank stock 425,000 425,000 425,000 Premises and equipment,net 3,554,486 2,542,997 2,578,284 Accrued interest receivable 840,040 734,707 619,047 Other assets 1,015,031 1,081,944 1,492,989 ------------- ------------- ------------- Total assets $ 222,750,733 $ 193,502,608 $ 184,437,288 ============= ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non interest-bearing $ 18,062,244 $ 13,153,038 $ 13,208,299 Interest-bearing 173,489,212 145,667,485 139,256,845 ------------- ------------- ------------- Total deposits 191,551,456 158,820,523 152,465,144 Federal funds purchased and repurchase agreements 5,775,131 9,980,778 9,540,566 Federal Home Loan Bank advances 6,000,000 6,000,000 6,000,000 Notes payable 4,500,000 4,500,000 2,950,000 Accrued expenses and other liabilities 867,441 801,975 716,216 ------------- ------------- ------------- Total liabilities 208,694,028 180,103,276 171,671,926 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, 1,432,800 issued at June 30, 2005 and 1,430,000 issued at December 31 and March 31, 2004 12,950,998 12,922,314 12,922,314 Retained earnings (deficit) 1,204,435 499,781 19,501 Accumulated other comprehensive income (deficit) (98,728) (22,763) (176,453) ------------- ------------- ------------- Total shareholders' equity 14,056,705 13,399,332 12,765,362 ------------- ------------- ------------- Total liabilities and shareholders' equity $ 222,750,733 $ 193,502,608 184,437,288 ============= ============= =============
COMMUNITY SHORES BANK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED ENDED 06/30/05 06/30/04 06/30/05 06/30/04 ----------- ----------- ----------- ----------- INTEREST AND DIVIDEND INCOME Loans, including fees $ 3,098,902 $ 2,317,827 $ 5,921,243 $ 4,601,650 Securities (including FHLB dividends) 172,933 126,590 330,717 300,307 Federal funds sold and other interest income 2,243 11,507 17,272 25,294 ----------- ----------- ----------- ----------- Total interest income 3,274,078 2,455,924 6,269,232 4,927,251 INTEREST EXPENSE Deposits 1,055,047 809,318 1,911,376 1,626,311 Repurchase agreements and federal funds purchased and other debt 71,904 26,128 128,453 54,298 Federal Home Loan Bank advances and notes payable 145,357 123,306 283,108 243,841 ----------- ----------- ----------- ----------- Total interest expense 1,272,308 958,752 2,322,937 1,924,450 NET INTEREST INCOME 2,001,770 1,497,172 3,946,295 3,002,801 Provision for loan losses 130,335 158,397 247,757 215,274 ----------- ----------- ----------- ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,871,435 1,338,775 3,698,538 2,787,527 Noninterest income Service charges on deposit accounts 225,667 167,290 433,503 327,219 Mortgage loan referral fees 0 15,449 2,120 35,579 Gain on sale of loans 2,724 9,303 16,435 14,588 Gain on sale of mortgage servicing rights 0 0 0 0 Loss on disposition of securities 0 10,923 0 (6,600) Other 82,244 69,090 153,216 119,988 ----------- ----------- ----------- ----------- Total noninterest income 310,635 272,055 605,274 490,774 Noninterest expense Salaries and employee benefits 902,709 789,410 1,749,499 1,570,950 Occupancy 72,122 74,559 148,398 154,650 Furniture and equipment 95,880 90,542 179,547 182,450 Advertising 40,320 12,688 86,427 39,181 Data Processing 91,178 79,769 178,738 156,148 Professional services 133,327 92,186 265,309 213,130 Other 332,799 232,729 628,645 471,625 ----------- ----------- ----------- ----------- Total noninterest expense 1,668,335 1,371,883 3,236,563 2,788,134 INCOME BEFORE INCOME TAXES 513,735 238,947 1,067,249 490,167 Federal income tax expense (benefit) 171,222 84,631 362,597 166,802 ----------- ----------- ----------- ----------- NET INCOME $ 342,513 $ 154,316 $ 704,652 $ 323,365 =========== =========== =========== =========== Weighted average shares outstanding 1,432,800 1,430,000 1,432,057 1,430,000 =========== =========== =========== =========== Diluted average shares outstanding 1,462,813 1,467,309 1,461,141 1,447,594 =========== =========== =========== =========== Basic income per share $ 0.24 $ 0.11 $ 0.49 $ 0.23 =========== =========== =========== =========== Diluted income per share $ 0.23 $ 0.11 $ 0.48 $ 0.22 =========== =========== =========== ===========
COMMUNITY SHORES BANK CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS QUARTERLY ---------------------------------------------------------------------- 2005 2005 2004 2004 2004 (dollars in thousands except per share data) 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR ---------- ---------- ---------- ---------- ---------- EARNINGS Net interest income 2,002 1,944 1,796 1,646 1,497 Provision for loan and lease losses 130 117 62 182 158 Noninterest income 311 294 252 235 272 Noninterest expense 1,668 1,568 1,517 1,440 1,372 Pre tax income 514 554 469 259 239 Net Income 343 362 310 170 154 Basic earnings per share $ 0.24 $ 0.25 $ 0.22 $ 0.12 $ 0.11 Diluted earnings per share $ 0.23 $ 0.25 $ 0.21 $ 0.12 $ 0.11 Average shares outstanding 1,432,800 1,431,307 1,430,000 1,430,000 1,430,000 Average diluted shares outstanding 1,462,813 1,460,589 1,461,933 1,465,139 1,467,309 PERFORMANCE RATIOS Return on average assets 0.65% 0.72% 0.64% 0.36% 0.32% Return on average common equity 9.90% 10.71% 9.28% 5.25% 4.75% Net interest margin 3.96% 3.97% 3.86% 3.64% 3.29% Efficiency ratio 72.15% 70.03% 74.04% 76.53% 78.02% Full-time equivalent employees 59 56 53 53 51 CAPITAL Average equity to average assets 6.61% 6.69% 6.90% 6.91% 6.79% Tier 1capital to average assets 6.76% 6.83% 6.94% 6.99% 6.78% Book value per share $ 9.81 $ 9.52 $ 9.37 $ 9.18 $ 8.93 ASSET QUALITY Gross loan charge-offs 79 80 136 210 13 Net loan charge-offs 74 22 69 204 8 Net loan charge-offs to avg loans (annualized) 0.16% 0.05% 0.16% 0.50% 0.02% Allowance for loan and lease losses 2,155 2,098 2,039 2,046 2,067 Allowance for losses to total loans 1.15% 1.17% 1.19% 1.24% 1.29% Past due and nonaccrual loans (90 days) 1,034 643 753 716 960 Past due and nonaccrual loans to total loans 0.55% 0.36% 0.44% 0.43% 0.60% Other real estate and repossessed assets 6 0 187 559 433 END OF PERIOD BALANCES Loans 186,857 179,604 171,451 164,894 160,774 Total earning assets 212,419 198,114 188,968 185,487 177,604 Total assets 222,751 204,879 193,503 203,373 184,437 Deposits 191,551 171,974 158,821 168,907 152,465 Shareholders' equity 14,057 13,640 13,399 13,128 12,765 AVERAGE BALANCES Loans 182,910 176,578 167,509 164,041 159,753 Total earning assets 202,186 195,800 186,289 181,099 178,186 Total assets 209,545 202,140 193,421 187,649 190,818 Deposits 155,733 164,381 142,391 151,508 158,991 Shareholders' equity 13,855 13,526 13,355 12,959 12,955