EX-99.1 2 k07074exv99w1.txt PRESS RELEASE OF COMMUNITY SHORES BANK CORP (COMMUNITY SHORES BANK CORPORATION LOGO) FOR FURTHER INFORMATION: AT COMMUNITY SHORES BANK CORPORATION: Heather D. Brolick Tracey Welsh President and CEO Senior Vice President and CFO 1-231-780-1845 1-231-780-1847 hbrolick@communityshores.com twelsh@communityshores.com MEDIA CONTACT: Linda Margolin Margolin & Associates, Inc. 1-216-932-1755 lmm@margolinIR.com COMMUNITY SHORES REPORTS SECOND QUARTER 2006 EARNINGS OF $0.23 PER DILUTED SHARE MUSKEGON, Mich., July 21, 2006 (PRIMEZONE) -- Community Shores Bank Corporation (Nasdaq:CSHB), Muskegon's only locally headquartered independent community banking organization, today reported second quarter 2006 net income of $342,000 compared with $342,500 reported in the second quarter of 2005, essentially flat. Diluted earnings per share were $0.23 compared with $0.23 for the year-ago quarter. Heather D. Brolick, President and CEO, commented, "We are pleased with our performance this quarter, and its consistency. Michigan's economy has been a challenge, although Muskegon is one of the brightest corners of our state, and our base of small entrepreneurial businesses is relatively independent of trends in the auto industry. Our margins have been stable over the past five quarters, and our loan pipeline remains healthy, with asset quality restored to its earlier high-performance level. We are positioned well for a strong year, with several opportunities for additional growth and profitability as the year progresses." Total revenue, consisting of net interest income and non-interest income, was $2.5 million for second quarter of 2006, an increase of 7.0% above the $2.3 million revenue reported for the prior year's second quarter. Net interest income increased 5.6% to $2.1 million, reflecting a 7.3% increase in average earning assets. Although the margin decreased 2 basis points compared to 2005's second quarter, the margin improved 9 basis points compared with 2006's first quarter. Non-interest income for the current quarter was $355.9 thousand compared with $310.3 thousand for the year-ago quarter, an increase of $46.0 thousand, or 14.7%. Service charges increased by $30.5 thousand, or 13.5%, with gains on mortgage loan sales adding an incremental $8.9 thousand. Non-interest expense totaled $1.8 million for the second quarter of 2006, up $86.6 thousand or 5.2% from the second quarter of 2005. Salaries and employee benefits, up $44.3 thousand or 4.9%, accounted for the majority of the increase, followed by an additional $15.7 thousand, up 21.7%, for occupancy. The efficiency ratio for the second quarter of 2006 improved to 71.08% from 72.15% for the year-ago quarter. Ms. Brolick noted, "Expense control remains a focus throughout the organization; all of our employees are on board to enhance the efficiency of our Company." Assets at June 30, 2006 totaled $236.7 million compared with $222.8 million twelve months ago, up $13.9 million or 6.3%. Loans held for investment increased $12.2 million, or 6.5%, reaching $199.1 million at June 30, 2006. Deposits increased $13.6 million, or 7.1%, to $205.2 million for the same 12-month period. Nonperforming loans and delinquencies were $1.43 million or 0.72% of period-end loans at June 30, 2006, compared with $1.58 million or 0.82% of loans at March 31, 2006 and $1.0 million or 0.55% of loans for the year-ago quarter. Net charge-offs were $94 thousand this quarter, or 0.19% of average loans on an annualized basis, compared with $384 thousand or 0.81% for the previous quarter, and $74 thousand, or 0.16% a year ago. The allowance for loan and lease losses stands at 1.22% of total loans at June 30, 2006. Shareholders' equity totaled $15.1 million at June 30, 2006, up $1.1 million from twelve months ago. Tier I capital was 6.51% for the second quarter of 2006 compared with 6.35% for the prior year's second quarter. Shares outstanding at period-end were 1,436,800. Ms. Brolick concluded, "We continue to focus on the customer experience as the number one opportunity to enhance the value of our franchise. We believe this is the straightest path to revenue growth, and we plan to safeguard this growth with disciplined spending controls and prudent management of asset quality. These factors are firmly in place, and we look forward to a continuation of our solid performance." About the Company 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 grown to $237 million in assets. The Company's stock is listed on the NASDAQ Capital Market under the symbol 'CSHB.' For further information, please visit the Company's web site at: www.communityshores.com. 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) 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. COMMUNITY SHORES CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS
QUARTERLY ---------------------------------------------------------- YEAR TO DATE 2006 2006 2005 2005 2005 ---------------------- (dollars in thousands except per share data) 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR 2006 2005 ---------- ---------- ---------- ---------- ---------- ---------- ---------- EARNINGS Net interest income 2,113 2,075 2,114 2,100 2,002 4,188 3,946 Provision for loan and lease losses 224 78 508 98 130 302 248 Noninterest income 356 320 339 319 311 676 604 Noninterest expense 1,755 1,792 1,793 1,755 1,668 3,547 3,236 Pre tax income 491 525 153 565 514 1,044 1,067 Net Income 342 364 119 389 343 706 705 Basic earnings per share $ 0.24 $ 0.25 $ 0.08 $ 0.27 $ 0.24 $ 0.49 $ 0.49 Diluted earnings per share $ 0.23 $ 0.25 $ 0.08 $ 0.26 $ 0.23 $ 0.48 $ 0.48 Average shares outstanding 1,436,800 1,436,800 1,436,800 1,435,757 1,432,800 1,436,800 1,432,057 Average diluted shares outstanding 1,461,201 1,474,279 1,482,431 1,480,317 1,462,813 1,468,181 1,461,141 PERFORMANCE RATIOS Return on average assets 0.60% 0.64% 0.22% 0.71% 0.65% 0.62% 0.68% Return on average common equity 9.11% 9.89% 3.28% 10.89% 9.88% 9.47% 10.29% Net interest margin 3.94% 3.85% 4.05% 4.00% 3.96% 3.90% 3.97% Efficiency ratio 71.08% 74.82% 73.09% 72.57% 72.15% 72.92% 71.11% Full-time equivalent employees 63 63 61 60 59 63 59 CAPITAL End of period equity to assets 6.38% 6.57% 6.53% 6.60% 6.31% 6.38% 6.31% Tier 1 capital to end of period assets 6.51% 6.70% 6.62% 6.66% 6.35% 6.51% 6.35% Book value per share $ 10.52 $ 10.29 $ 10.09 $ 10.05 $ 9.81 $ 10.52 $ 9.81 ASSET QUALITY Gross loan charge-offs 120 405 95 62 80 525 161 Net loan charge-offs 94 384 89 59 74 478 132 Net loan charge-offs to avg loans (annualized) 0.19% 0.81% 0.19% 0.13% 0.16% 0.25% 0.07% Allowance for loan and lease losses 2,437 2,307 2,613 2,194 2,155 2,437 2,155 Allowance for losses to total loans 1.22% 1.20% 1.36% 1.17% 1.15% 1.22% 1.15% Past due and nonaccrual loans (90 days) 1,428 1,579 1,128 834 1,034 1,428 1,034 Past due and nonaccrual loans to total loans 0.72% 0.82% 0.59% 0.45% 0.55% 0.72% 0.55% Other real estate and repossessed assets 58 4 22 6 6 58 6 END OF PERIOD BALANCES Loans 199,075 191,916 192,645 187,263 186,857 199,075 186,857 Total earning assets 223,447 215,305 212,262 209,479 212,419 223,447 212,419 Total assets 236,677 225,079 222,166 218,864 222,751 236,677 222,751 Deposits 205,175 194,572 190,451 186,081 191,551 205,175 191,551 Shareholders' equity 15,097 14,791 14,500 14,439 14,057 15,097 14,057 AVERAGE BALANCES Loans 195,783 189,698 191,170 187,909 182,910 192,758 179,762 Total earning assets 216,868 218,397 211,025 212,448 202,186 217,628 199,010 Total assets 226,911 227,725 220,061 220,101 209,545 227,319 205,863 Deposits 192,696 197,173 184,005 168,884 155,733 194,922 168,003 Shareholders' equity 15,034 14,716 14,530 14,290 13,855 14,913 13,691
COMMUNITY SHORES BANK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED ENDED 06/30/06 06/30/05 06/30/06 06/30/05 ------------ ------------ ----------- ---------- INTEREST AND DIVIDEND INCOME Loans, including fees $3,841,279 $3,098,902 $7,369,830 $5,921,243 Securities (including FHLB dividends) 179,724 172,933 360,040 330,717 Federal funds sold and other interest income 18,757 2,243 119,739 17,272 ---------- ---------- ---------- ---------- Total interest income 4,039,760 3,274,078 7,849,609 6,269,232 INTEREST EXPENSE Deposits 1,678,261 1,055,047 3,217,233 1,911,376 Repurchase agreements and federal funds purchased and other debt 75,917 71,904 110,683 128,453 Federal Home Loan Bank advances and notes payable 172,417 145,357 333,740 283,108 ---------- ---------- ---------- ---------- Total interest expense 1,926,595 1,272,308 3,661,656 2,322,937 NET INTEREST INCOME 2,113,165 2,001,770 4,187,953 3,946,295 Provision for loan losses 223,599 130,335 301,752 247,757 ---------- ---------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,889,566 1,871,435 3,886,201 3,698,538 Noninterest income Service charges on deposit accounts 256,176 225,667 494,289 433,503 Mortgage loan referral fees 1,437 0 1,437 2,120 Gain on sale of loans 11,668 2,724 16,403 16,435 Loss on disposal of equipment 0 (347) (124) (347) Other 86,636 82,244 164,235 153,216 ---------- ---------- ---------- ---------- Total noninterest income 355,917 310,288 676,240 604,927 Noninterest expense Salaries and employee benefits 947,030 902,709 1,938,076 1,749,499 Occupancy 87,776 72,122 175,074 148,398 Furniture and equipment 101,737 95,533 198,254 179,200 Advertising 40,935 40,320 83,792 86,427 Data Processing 102,514 91,178 196,278 178,738 Professional services 130,519 133,327 257,791 265,309 Other 344,119 332,799 697,289 628,645 ---------- ---------- ---------- ---------- Total noninterest expense 1,754,630 1,667,988 3,546,554 3,236,216 INCOME BEFORE INCOME TAXES 490,853 513,735 1,043,662 1,067,249 Federal income tax expense 148,859 171,222 310,303 362,597 ---------- ---------- ---------- ---------- NET INCOME $ 341,994 $ 342,513 $ 705,584 $ 704,652 ========== ========== ========== ========== Weighted average shares outstanding 1,436,800 1,432,800 1,436,800 1,432,057 ========== ========== ========== ========== Diluted average shares outstanding 1,461,201 1,462,813 1,468,181 1,461,141 ========== ========== ========== ========== Basic income per share $ 0.24 $ 0.24 $ 0.49 $ 0.49 ========== ========== ========== ========== Diluted income per share $ 0.23 $ 0.23 $ 0.48 $ 0.48 ========== ========== ========== ==========
COMMUNITY SHORES BANK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
JUNE 30, DECEMBER 31, JUNE 30, 2006 2005 2005 (UNAUDITED) (AUDITED) (UNAUDITED) ------------ ------------ ------------ ASSETS Cash and due from financial institutions $ 6,592,357 $ 4,361,277 $ 6,644,959 Interest-bearing deposits in other financial institutions 288,517 90,182 278,224 Federal funds sold 5,350,000 200,000 6,650,000 ------------ ------------ ------------ Total cash and cash equivalents 12,230,874 4,651,459 13,573,183 Securities Available for sale 13,043,976 13,983,933 15,274,110 Held to maturity 5,264,370 4,918,499 3,359,398 ------------ ------------ ------------ Total securities 18,308,346 18,902,432 18,633,508 Loans 199,074,571 192,644,742 186,856,712 Less: Allowance for loan losses 2,436,765 2,612,581 2,154,519 ------------ ------------ ------------ Net loans 196,637,806 190,032,161 184,702,193 Federal Home Loan Bank stock 425,000 425,000 425,000 Premises and equipment,net 6,767,643 5,922,886 3,554,486 Accrued interest receivable 1,002,209 994,219 840,040 Other assets 1,304,890 1,238,194 1,015,031 ------------ ------------ ------------ Total assets $236,676,768 $222,166,351 $222,750,733 ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non interest-bearing $ 18,439,578 $ 16,564,735 $ 18,062,244 Interest-bearing 186,735,865 173,886,366 173,489,212 ------------ ------------ ------------ Total deposits 205,175,443 190,451,101 191,551,456 Federal funds purchased and repurchase agreements 4,902,409 6,065,010 5,775,131 Federal Home Loan Bank advances 6,000,000 6,000,000 6,000,000 Subordinated debentures 4,500,000 4,500,000 4,500,000 Notes payable 400,000 0 0 Accrued expenses and other liabilities 601,466 650,329 867,441 ------------ ------------ ------------ Total liabilities 221,579,318 207,666,440 208,694,028 Shareholders' Equity Common Stock, no par value: 9,000,000 shares authorized, 1,436,800 issued at March 31, 2006 and December 31, 2005 and 1,432,800 at March 31, 2005 12,999,998 12,998,670 12,950,998 Retained earnings 2,418,046 1,712,462 1,204,435 Accumulated other comprehensive deficit (320,594) (211,221) (98,728) ------------ ------------ ------------ Total shareholders' equity 15,097,450 14,499,911 14,056,705 ------------ ------------ ------------ Total liabilities and shareholders' equity $236,676,768 $222,166,351 $222,750,733 ============ ============ ============