Community Central Bank Corp. (CCBD) filed Quarterly Report for the period ended 2009-09-30.
Community Central Bank Corporation is a bank holding company for Community Central Bank which offers a wide array of financial products and servicesfor both consumers and small- to medium-sized businesses. The bank specializes in serving owner-managed businesses by providing a high degree of personal service to companies and their employees. The Bank provides many types of commercial financing for businesses, as well as a full range of deposit products. Other services include cash management, wire transfer, free PC banking, and courier services. Community Central Bank Corp. has a market cap of $6.17 million; its shares were traded at around $1.65 with and P/S ratio of 0.15. Community Central Bank Corp. had an annual average earning growth of 25% over the past 10 years. GuruFocus rated Community Central Bank Corp. the business predictability rank of 2.5-star.
Highlight of Business Operations:
The weakness in the economy continues to affect parts of our loan portfolio requiring a higher provision for loan losses. Although our nonperforming loan level continues to pressure our earnings, we continue to proactively deal with loan issues. We continue to focus on strategies to preserve and increase capital, and emphasize segments of operations that are capital efficient, such as our mortgage banking operations, our branch deposit operations as well as our Trust and Wealth divisions. An ongoing effort to increase our core deposits has resulted in a reduction in our cost of funds. During the first nine months of 2009, our deposits increased $13.3 million, with organic deposits increasing $47.8 million, as wholesale deposits decreased $34.6 million. We also decreased Federal Home Loan Bank advances $20.5 million during the first nine months, replacing them with lower cost core deposit funding. We recorded a $4.4 million provision for loan losses in the third quarter of 2009 and $9.7 million for the first nine months of 2009. The provision is based upon management’s review of the risks inherent in the loan portfolio and the level of our allowance for loan losses. In addition, net charge-offs for the first nine months of 2009 totaled $4.8 million, or 1.42% of total average loans on an annualized basis. Total nonaccruing loans and loans past due 90 days or more and still accruing interest totaled $30.5 million, or 7.39% of total loans at September 30, 2009 compared to $32.4 million or 7.85% at June 30, 2009 and $17.6 million, or 4.32% at December 31, 2008. The allowance for loan losses at September 30, 2009 was $12.2 million, or 2.95% of total loans
compared to $9.8 million or 2.38% at June 30, 2009 and $7.3 million, or 1.80% at December 31, 2008. In addition to the nonaccrual loans stated above, as of September 30, 2009, restructured loans increased to $15.1 million from $8.2 million at December 31, 2008. At September 30, 2009, of the $15.1 million of loans classified as restructured, $14.3 million were contractually current.
Loan growth of $5.8 million for the first nine months of 2009 was primarily comprised of commercial and industrial loans which increased $14.4 million. Partially offsetting this growth was a decrease in the commercial real estate portfolio of $5.4 million and the residential mortgage portfolio of $4.7 million. During the second quarter of 2009, the Corporation sold loan participations, at par, of approximately $10.0 million of commercial real estate loans. At September 30, 2009, commercial and commercial real estate loans comprised 80.6% of the total loan portfolio, which is consistent with our current and historical small business focus. The Corporation had approximately $165.6 million in outstanding loans at September 30, 2009, to borrowers in the real estate rental and properties management industry. The growth in the commercial loan portfolio for the first quarter of 2009 was due, in part, to the dislocation of credit worthy businesses from
At September 30, 2009, $35.0 million or 70.4% of the total residential portfolio was comprised of adjustable rate mortgages. Residential mortgage loans which the Corporation holds in portfolio comprise loans made as an accommodation to existing customers with other banking relationships with the Corporation. The HELOC portfolio totaled $22.7 million at September 30, 2009, an increase of $1.5 million or 7.0% from December 31, 2008. The majority of the increase in the HELOC portfolio related to a small group of new HELOC loans made to high net worth customers. New underwriting guidelines for those HELOC loans carried in the portfolio of the Bank limit loan to value ratios, including prior liens, to 85% of appraised value of the real estate and were adopted during the first quarter of 2008. This represents a decrease from the prior loan to value ratios of 95%. Our consumer loan portfolio, comprised primarily of boat loans, totaled $7.2 million at September 30, 2009, a small increase of $62,000 from December 31, 2008. The small increase in this portfolio was isolated to a loan to a creditworthy high net worth individual, as generally the Corporation is seeking to decrease its exposure in retail based loans as it has experienced an increase in delinquencies and repossessions. The credit card portfolio totaled $829,000 at September 30, 2009, a decrease of $17,000 from December 31, 2008. The Corporation continues to book credit card loans as a customer accommodation, but is not actively marketing this product.
Securities available for sale totaled $64.9 million at September 30, 2009, a decrease of $11.8 million for the first nine months of 2009. The largest changes in the portfolio occurred in the U.S. Agency notes which decreased $12.0 million to zero at September 30, 2009, as a result of calls and sales. Mortgage-backed securities increased $8.7 million to $35.4 million at September 30, 2009, as a result of purchases of Government National Mortgage Association (“GNMA”) securities which carry the full faith and credit of the United States Government. Collateralized mortgage obligations (“CMO”) totaled $21.3 million at September 30, 2009, decreasing from a total of $25.7 million at December 31, 2008. Municipal securities in portfolio totaled $4.5 million at September 30, 2009, a decrease of $7.5 million from December 31, 2008. The portfolio of municipal bonds was reduced for federal income tax considerations through sales, maturities and calls.
Total deposits of $370.6 million at September 30, 2009 increased $13.3 million, or 3.7%, for the first nine months of 2009. Increases in deposits for the quarter were entirely related to organic growth, as brokered time deposits decreased $34.6 million during this period of time. Noninterest bearing demand accounts totaled $59.3 million at September 30, 2009, an increase of $25.1 million during the first nine months, due to the expanded branch base and selected lending activities whereby the Bank required significantly higher levels of deposits in the new relationship. At September 30, 2009, NOW and savings accounts remained relatively unchanged from December 31, 2008. Money market savings accounts totaled $19.8 million at September 30, 2009, which was a decrease of $4.7 million. The decrease is attributable to the movement of funds into higher rate alternatives such as time deposits in the extremely low rate environment. Conversely, NOW accounts increased $3.7 million due to emphasis on core deposit generation and fluctuations in balances. Time deposits below $100,000 increased $8.3 million for the first nine months of 2009 as a result of the new branch location in Grosse Pointe Woods and our continued emphasis on deposit growth through targeted calling programs and increased community involvement. Time deposits $100,000 and over decreased $19.5 million from a planned decrease in brokered time deposits of $34.6 million. This category of deposits, when measured without the brokered time deposits, increased $15.1 million, from the same factors as the time deposits under $100,000. The Corporation continues to see competitive deposit rates offered by local financial institutions within the geographic proximity of the Bank, which has had the effect of increasing the cost of funds. The Corporation continues to focus on the growth in transactional based deposit accounts which have a much lower interest rate than time deposit products and wholesale forms of funding. The Corporation continues to utilize wholesale forms of funding through the Federal Home Loan Bank and brokered CDs, but expects to reduce this form of funding moving forward as it focuses on organic deposit growth and reduces the total asset size of the Bank.
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