Community Central Bank Corporation Announces Profitable Q2 Results

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 theMichigan 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 inMount Clemens, Michigan. The Bank opened for business in October 1996 and serves businesses and consumers acrossMacomb,Oakland,Wayne andSt. Clair counties with a full range of lending, deposit, trust, wealth management, and Internet banking services. The Bank operates four full service facilities, inMount Clemens,Rochester Hills,Grosse Pointe Farms, andGrosse Pointe Woods, Michigan. Community Central Mortgage Company, LLC, a subsidiary of the Bank, operates locations servicing theDetroit 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

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