<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 Commission File No. 333-04113
COMMUNITY CENTRAL BANK CORPORATION
(Name of small business issuer in its charter)
<TABLE>
<CAPTION>
Michigan 38-3291744
- -------------------------------------------------------------- ---------------------------------
<S> <C>
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
100 N. Main Street, Mount Clemens, Michigan 48043-5605
(Address of principal executive offices)
(810) 783-4500
(Issuer's telephone number)
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: None
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
YES X NO
----- -----
Check if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ X ]
Issuer's revenue for its most recent fiscal year was $204,000
As of March 24, 1997, 1,150,000 shares of Common Stock of the issuer were
outstanding. The aggregate market value of voting stock of the registrant held
by nonaffiliates was approximately $11.3 million as of March 24, 1997; based on
the average of the bid and asked prices ($12.31) on that date. (For purposes
of this calculation, 232,000 shares owned by the members of the Corporation's
Board of Directors have been excluded.)
DOCUMENTS INCORPORATED BY REFERENCE:
Parts II and III Part of Stockholder Report of the issuer for the period
from April 26, 1996 (inception) to December 31, 1996.
Part III Part of the Proxy Statement of the issuer dated March
17, 1997.
The Exhibit Index is located on page 11 of this Form 10-KSB.
Transitional Small Business Disclosure Format Yes No X
----- -----
<PAGE> 2
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
PART I
ITEM 1. DESCRIPTION OF BUSINESS
THE CORPORATION
Community Central Bank Corporation (the Corporation) is a bank holding
company under the Bank Holding Company Act of 1956, as amended (the Bank
Holding Company Act). As a bank holding company, the Corporation is subject to
regulation by the Federal Reserve Board. The Corporation was organized on
April 26, 1996, under the laws of the State of Michigan, and formed Community
Central Bank (the Bank), effective September 16, 1996. The Corporation exists
primarily for the purpose of holding all the stock of the Bank, and of such
other subsidiaries as it may acquire or establish.
The Corporation's principal source of future operating funds is expected
to be dividends from the Bank. The expenses of the Corporation have generally
been paid using the proceeds of its initial public stock offering.
THE BANK
The Bank is a state banking corporation which operates under the laws of
the United States of America, pursuant to a charter issued by the State of
Michigan. The Bank's deposits are insured to the maximum extent provided by
the Federal Deposit Insurance Corporation.
The Bank, through its office at 100 North Main Street, Mount Clemens,
Michigan provides a wide variety of commercial banking services to individuals,
businesses, governmental units, and other institutions. Its services include
accepting time, demand and savings deposits, including regular checking
accounts, NOW and money market accounts, and certificates of deposit. In
addition, the Bank makes secured and unsecured commercial, construction,
mortgage and consumer loans, finances commercial transactions, and provides
safe deposit facilities. The Bank has an automated teller machine (ATM) which
participates in the Magic Line system, a regional network, as well as other ATM
networks throughout the country. In addition to the foregoing services, the
Bank provides its customers with extended banking hours, and is testing a
system to perform certain transactions by telephone or personal computer to be
provided by its data processing vendor. The Bank does not have trust powers.
EFFECT OF GOVERNMENT MONETARY POLICIES
The earnings of the Corporation are affected by domestic economic
conditions and the monetary and fiscal policies of the United States
government, its agencies, and the Federal Reserve Board. The Federal Reserve
Board's monetary policies have had, and will likely continue to have, an
important impact on the operating results of commercial banks through its power
to implement national monetary policy in order to, among other things, curb
inflation or combat a recession. The policies of the Federal Reserve Board
have a major effect upon the levels of bank loans, investments and deposits
through its open market operations in United States government securities, and
through its regulation of, among other things, the discount rate on borrowings
of member banks and the reserve requirements against member bank deposits. It
is not possible to predict the nature and impact of future changes in monetary
and fiscal policies. The Bank currently is not required to maintain reserves
with the Federal Reserve Bank. Instead, the cost of such reserves are passed
to the Bank by its correspondent institution.
2
<PAGE> 3
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
REGULATION AND SUPERVISION
The Corporation, as a bank holding company under the Bank Holding Company
Act, is required to file an annual report with the Federal Reserve Board and
such additional information as the Federal Reserve Board may require pursuant
to the Bank Holding Company Act, and is subject to examination by the Federal
Reserve Board.
The Bank Holding Company Act limits the activities which may be engaged in
by the Corporation and its subsidiary to those of banking and the management of
banking organizations, and to certain non-banking activities, including those
activities which the Federal Reserve Board may find, by order or regulation, to
be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. The Federal Reserve Board is empowered to
differentiate between activities by a bank holding company, or a subsidiary
thereof, and activities commenced by acquisition of a going concern.
With respect to non-banking activities, the Federal Reserve Board has, by
regulation, determined that certain non-banking activities are closely related
to banking within the meaning of the Bank Holding Company Act. These
activities include, among other things, operating a mortgage company, finance
company, credit card company or factoring company, performing certain data
processing operations, providing certain investment and financial advice,
acting as an insurance agent for certain types of credit related insurance,
leasing property on a full-payout, nonoperating basis; and, subject to certain
limitations, providing discount securities brokerage services for customers.
The Corporation has no current plans to engage in non-banking activities.
The Bank is subject to certain restrictions imposed by federal law on any
extension of credit to the Corporation for investments in stock or other
securities thereof, and on the taking of such stock or securities as collateral
for loans to any borrower. Federal law prevents the Corporation from borrowing
from the Bank unless the loans are secured in designated amounts.
With respect to the acquisition of banking organizations, the Corporation
is required to obtain the prior approval of the Federal Reserve Board before it
can acquire all or substantially all of the assets of any bank, or acquire
ownership or control of any voting shares of any bank, if, after such
acquisition, it will own or control more than 5% of the voting shares of such
bank. Acquistions across state lines are subject to certain state and Federal
Reserve Board restrictions.
EMPLOYEES
As of December 31, 1996, the Corporation and the Bank employed 28 persons
(full-time equivalent).
COMPETITION
All phases of the business of the Bank are highly competitive. The Bank
competes with numerous financial institutions, including other commercial
banks, in the Macomb County and metropolitan Detroit area. The Bank, along
with other commercial banks, competes with respect to its lending activities,
and competes in attracting demand deposits with savings banks, savings and loan
associations, insurance companies, small loan companies, credit unions and with
the issuers of commercial paper and other securities, such as various mutual
funds. Many of these institutions are substantially larger and have greater
financial resources than the Bank.
3
<PAGE> 4
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
The competitive factors among financial institutions can be classified
into two categories; competitive rates and competitive services. Interest rates
are widely advertised and thus competitive, especially in the area of time
deposits. From a service standpoint, financial institutions compete against
each other in types and quality of services. The Bank is generally competitive
with other financial institutions in its area with respect to interest rates
paid on time and savings deposits, charges on deposit accounts, and interest
rates charged on loans. With respect to services, the Bank offers a customer
service oriented atmosphere which management believes to be superior to that
offered by other institutions in the local market.
Pursuant to state regulations, the Bank is limited in the amount that it
may lend to a single borrower. As of December 31, 1996 the legal lending limit
was approximately $1,038,000; however, that limit can be expanded (for
individual loans) to approximately $1,731,000 with approval of the Board of
Directors.
LOAN PORTFOLIO
Residential real estate loans are generally for owner occupied, one to
four family homes, which are secured by mortgages. The majority of these loans
have a fixed interest rate. The Bank has no material foreign or agricultural
loans, and no material loans to energy producing customers.
Loans are placed in a nonaccrual status when, in the opinion of
management, uncertainty exists as to the ultimate collection of principal and
interest. For the period ended December 31, 1996, no loans were placed in
nonaccrual status. At December 31, 1996, there were no significant loans where
known information about possible credit problems of borrowers causes management
to have serious doubts as to the ability of the borrower to comply with present
loan repayment terms and which, in management's judgment, may result in
disclosure of such loans. Furthermore, management is not aware of any
potential problem loans which could have a material effect on the Corporation's
operating results, liquidity, or capital resources. Management is not aware of
any other factors that would cause future net loan charge-offs, in total and by
loan category, to significantly differ from those experienced by institutions
of similar size.
4
<PAGE> 5
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
ALLOWANCE FOR LOAN LOSSES
The following table summarizes changes in the allowance for loan and lease
losses arising from additions to the allowance which have been charged to
expense and selected ratios:
<TABLE>
<CAPTION>
Period from April 26, 1996 (inception)
through December 31, 1996
---------------------------------------
(in thousands)
<S> <C>
Average loans outstanding $536
=======
Total loans at year end $5,578
=======
Allowance for loan losses
at beginning of period $----
Provision charged to expense 90
-------
Allowance for loan losses
at end of year $90
=======
Ratio of net charge-offs during
the period to average loans
outstanding N/A
Allowance for loan losses as a
percentage of loans at period end 1.61%
</TABLE>
In each accounting period, the allowance for loan and lease losses is
adjusted by management to the amount necessary to maintain the allowance at
adequate levels. Through its credit department, management will attempt to
allocate specific portions of the allowance for loan losses based on
specifically identifiable problem loans. Management's evaluation of the
allowance is further based on consideration of actual loss experience, the
present and prospective financial condition of borrowers, industry
concentrations within the portfolio and general economic conditions.
Management believes that the present allowance is adequate, based on the broad
range of considerations listed above.
The primary risk element considered by management with respect to each
installment and residential real estate loan is lack of timely payment.
Management has a reporting system that monitors past due loans and has adopted
policies to pursue its creditor's rights in order to preserve the Bank's
position. The primary risk elements with respect to commercial loans are the
financial condition of the borrower, the sufficiency of collateral, and lack of
timely payment. Management has a policy of requesting and reviewing periodic
financial statements from its commercial loan customers, and periodically
reviews existence of collateral and its value.
Although management believes that the allowance for loan and lease losses
is adequate to absorb losses as they arise, there can be no assurance that the
Bank will not sustain losses in any given period which could be substantial in
relation to the size of the allowance for loan and lease losses.
5
<PAGE> 6
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
RETURN ON EQUITY AND ASSETS
The following table contains selected ratios:
<TABLE>
<CAPTION>
Period from April 26, 1996 (inception)
to December 31, 1996
--------------------------------------
<S> <C>
Return on average total assets (18.50%)
Return on average equity (27.62%)
Dividend payout ratio N/A
Average equity to average assets 66.96%
</TABLE>
ITEM 2. DESCRIPTION OF PROPERTY
The Bank leases a recently renovated office in the downtown business
district of Mount Clemens. The executive offices of the Corporation are
located in the same building. The building lease runs through 2011.
ITEM 3. LEGAL PROCEEDINGS
As a depository of funds, the Bank could occasionally be named as a
defendant in lawsuits (such as garnishment proceedings) involving claims to the
ownership of funds in particular accounts. All such litigation is incidental
to the Bank's business.
The Corporation's management believes that no litigation is threatened or
pending in which the Corporation, or its subsidiary, is likely to experience
loss or exposure which would materially affect the Corporation's equity,
financial position, or liquidity as presented herein.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
6
<PAGE> 7
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information shown under the caption "Stock Information" on page 24 of
the Stockholder Report of the Corporation, for the period from April 26, 1996
(inception) to December 31, 1996, (exhibit 13) is incorporated by reference
herein.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The information shown under the caption "Plan of Operation" on page 20 of
the Stockholder Report of the Corporation, for the period from April 26, 1996
(inception) to December 31, 1996, (exhibit 13) is incorporated by reference
herein.
ITEM 7. FINANCIAL STATEMENTS
The information presented under the captions "Consolidated Balance Sheet,"
"Consolidated Statement of Operations," "Consolidated Statement of Changes in
Stockholders' Equity," "Consolidated Statement of Cash Flow," and "Notes to
Consolidated Financial Statements," on pages 1 through 19 of the Stockholder
Report of the Corporation, for the period from April 26, 1996 (inception) to
December 31, 1996, as well as the Independent Auditor's Report of Plante &
Moran, LLP, dated February 13, 1997, (both exhibit 13) is incorporated by
reference herein.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
7
<PAGE> 8
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE ISSUER
The information listed under the caption "Information about Directors and
Nominees as Directors" on page 4 of the Proxy Statement of the Corporation
dated March 17, 1997, (exhibit 20) is incorporated by reference herein.
EXECUTIVE OFFICERS
The following is a list of the executive officers of the Corporation,
together with their ages and their present positions. Executive officers of
the Corporation are elected annually by the Corporation's Board of Directors to
serve for the ensuing year and until their successors are elected and
qualified.
<TABLE>
<CAPTION>
Name and Position Position Held Since Age
--------------------------------------- ------------------- ---
<S> <C> <C>
Harold W. Allmacher 57
Chairman of the Board and
Chief Executive Officer 1996 - present
Richard J. Miller 38
President and Chief Operating Officer 1996 - present
Andrew Tassopoulos 36
Executive Vice President 1996 - present
Peter J. Przybocki
Corporate Treasurer 1996 - present 33
</TABLE>
In addition, the executive officers listed above held similar positions with
Old Kent Bank - Macomb (formerly First National Bank in Macomb County) for
substantially all of the previous five years.
ITEM 10. EXECUTIVE COMPENSATION
The information detailed under the captions "Board of Directors Meetings
and Committees" on pages 5 and 6, "Report of the Compensation Committee," on
page 6, "Summary Compensation Table" and "Options Granted in 1996" on page 7,
and "Aggregated Stock Option Exercises in 1996 and Year End Option Values" on
page 8 of the Proxy Statement of the Corporation dated March 17, 1997, (exhibit
20) is incorporated by reference herein.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information summarized under the caption "Stock Ownership of Certain
Beneficial Owners and Management" on pages 2 and 3 of the Proxy Statement of
the Corporation dated March 17, 1997, (exhibit 20) is incorporated by reference
herein.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information listed under the caption "Certain Transactions" on page 8
of the Proxy Statement of the Corporation dated March 17, 1997, (exhibit 20) is
incorporated by reference herein.
The information listed under the caption "Leases" on page 9 of the
Stockholder Report of the Corporation, for the period from April 26, 1996
(inception) to December 31, 1996, (exhibit 13) is incorporated by reference
herein.
8
<PAGE> 9
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
A list of exhibits included as part of this Form 10-KSB is shown in the
Exhibit Index, which immediately precedes such exhibits, and is incorporated by
reference herein.
(b) Reports on Form 8-K
The Corporation has not filed any reports on Form 8-K during the last
quarter of the period covered by this Report.
9
<PAGE> 10
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized, on March 24, 1997:
COMMUNITY CENTRAL BANK CORPORATION
S/ HAROLD W. ALLMACHER
-------------------------------------------
Harold W. Allmacher; Chief Executive
Officer
(Principal Executive Officer)
S/ RICHARD J. MILLER
-------------------------------------------
Richard J. Miller; President and
Chief Operating Officer
S/ PETER J. PRZYBOCKI
-------------------------------------------
Peter J. Przybocki, CPA; Corporate Treasurer
(Principal Financial and Accounting
officer)
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant, and in the capacities
indicated on March 24, 1997:
<TABLE>
<S> <C>
S/ HAROLD W. ALLMACHER S/ CELESTINA GILES
-------------------------------- ---------------------------------
Harold W. Allmacher; Chairman of Celestina Giles; Director
the Board
S/ GEBRAN S. ANTON S/ BOBBY L. HILL
-------------------------------- ---------------------------------
Gebran S. Anton; Director Bobby L. Hill; Director
S/ JOSEPH CATENACCI S/ JOSEPH F. JEANNETTE
-------------------------------- ---------------------------------
Joseph Catenacci; Director Joseph F. Jeannette; Director
S/ RAYMOND M. CONTESTI S/ RICHARD J. MILLER
-------------------------------- ---------------------------------
Raymond M. Contesti; Director Richard J. Miller; Director
S/ SALVATORE COTTONE S/ DEAN S. PETITPREN
-------------------------------- ---------------------------------
Salvatore Cottone; Director Dean S. Petitpren; Director
S/ CAROLE L. SCHWARTZ
--------------------------------
Carole L. Schwartz; Director
</TABLE>
10
<PAGE> 11
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
3.1 Articles of Incorporation are incorporated by reference to
exhibit 3.1 of the Corporation's Registration Statement on Form
SB-2 (Commission File No. 333-04113) which became effective
September 23, 1996
3.2 Bylaws of the Corporation are incorporated by reference to
exhibit 3.2 of the Corporation's Registration Statement on Form
SB-2 (Commission File No. 333-04113) which became effective
September 23, 1996
10.1 1996 Employee Stock Option Plan is incorporated by reference to
exhibit 10.1 of the Corporation's Registration Statement on Form
SB-2 (Commission File No. 333-04113) which became effective
September 23, 1996 (Management contract or compensatory plan)
10.2 1996 Stock Option Plan for Nonemployee Directors, is
incorporated by reference to exhibit 10.2 of the Corporation's
Registration Statement on Form SB-2 (Commission File No. 333-04113)
which became effective September 23, 1996 (Management contract or
compensatory plan)
10.3 Lease Agreement between the Corporation and T.A.P. Properties,
L.L.C., dated May 16, 1996, is incorporated by reference to exhibit
10.3 of the Corporation's Registration Statement on Form SB-2
(Commission File No. 333-04113) which became effective September
23, 1996
11 Computation of Per Share Earnings
13 Independent Auditor's Report dated February 3, 1997, and
Stockholder Report of the Corporation for the period from April 26,
1996 (inception) to December 31, 1996. Except for the portions of
the Stockholder Report that are expressly incorporated by reference
in this 10-KSB, the Stockholder Report shall not be deemed filed as
a part hereof.
20 Proxy Statement of the Corporation dated March 17, 1997. Except
for the portions of the Proxy Statement that are expressly
incorporated by reference in this 10-KSB, the Proxy Statement shall
not be deemed filed as a part hereof.
21 Subsidiaries of the Issuer
23 Consent of Independent Auditor
27 Financial Data Schedule
11
<PAGE> 1
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
The information shown under the caption "Earnings Per Share" on page 16 of the
Stockholder Report of the Corporation, for the period from April 26, 1996
(inception) to December 31, 1996, (exhibit 13) is incorporated by reference
herein.
12
<PAGE> 1
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
EXHIBIT 13
INDEPENDENT AUDITOR'S REPORT
DATED FEBRUARY 3, 1997, AND
STOCKHOLDER REPORT OF THE CORPORATION
FOR THE PERIOD FROM APRIL 26, 1996 (INCEPTION)
TO DECEMBER 31, 1996
13
<PAGE> 2
COMMUNITY CENTRAL BANK CORPORATION
Independent Auditors' Report
and
Stockholder Report
December 31, 1996
<PAGE> 3
[PLANTE & MORAN, LLP LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Stockholders
Community Central Bank Corporation
Mount Clemens, Michigan
We have audited the accompanying consolidated balance sheet of
Community Central Bank Corporation as of December 31, 1996, and the related
consolidated statements of operations, changes in stockholders' equity, and
cash flow, for the period from April 26, 1996 (inception) to December 31, 1996.
These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Community Central Bank Corporation as of December 31, 1996, and the result of
its operations and cash flow for the period from April 26, 1996 (inception) to
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Plante & Moran, LLP
February 3, 1997
Bloomfield Hills, Michigan
<PAGE> 4
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Assets December 31, 1996
- -----------------------------------------------------------------------------------
(in thousands)
<S> <C>
Cash and Cash Equivalents
Cash and due from banks $ 1,358
Federal funds sold 14,300
- -----------------------------------------------------------------------------------
Total Cash and Cash Equivalents 15,658
- -----------------------------------------------------------------------------------
Loans (Note 2)
Residential mortgage loans 3,950
Commercial loans 1,336
Installment loans 292
- -----------------------------------------------------------------------------------
Total Loans 5,578
Allowance for loan losses (Note 3) (90)
- -----------------------------------------------------------------------------------
Net Loans 5,488
- -----------------------------------------------------------------------------------
Net property and equipment (Note 4) 1,696
Accrued interest receivable 17
Other assets 226
- -----------------------------------------------------------------------------------
Total Assets $23,085
===================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 5
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED BALANCE SHEET, CONTINUED
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
Liabilities and Stockholders' Equity December 31, 1996
- ---------------------------------------------------------------------------------
(in thousands, except share data)
<S> <C>
Deposits
Noninterest bearing demand deposits $ 1,619
NOW and money market accounts 2,724
Savings deposits 276
Time deposits (Note 5) 7,562
- ---------------------------------------------------------------------------------
Total deposits 12,181
- ---------------------------------------------------------------------------------
Accrued interest payable 32
Other liabilities 112
Capital lease obligation (Note 6) 1,020
- ---------------------------------------------------------------------------------
Total Liabilities 13,345
- ---------------------------------------------------------------------------------
Stockholders' Equity (Note 7)
Common stock ($5 stated value; 9,000,000 shares authorized,
1,150,000 shares issued and outstanding) 5,750
Additional paid-in capital 4,770
Accumulated deficit (780)
- ---------------------------------------------------------------------------------
Total Stockholders' Equity 9,740
- ---------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $23,085
=================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 6
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Period from April 26, 1996 (inception)
to December 31, 1996
- -----------------------------------------------------------------------------------------
(in thousands)
<S> <C>
Interest and fee income on loans $ 42
Other interest income 158
- -----------------------------------------------------------------------------------------
Total Interest Income 200
- -----------------------------------------------------------------------------------------
Interest expense on deposits 42
Interest expense on capital lease obligation 40
- -----------------------------------------------------------------------------------------
Total Interest Expense 82
- -----------------------------------------------------------------------------------------
Net Interest Income 118
Provision for loan losses 90
- -----------------------------------------------------------------------------------------
Net Interest Income after Provision 28
- -----------------------------------------------------------------------------------------
Deposit service charges 1
Other income 3
- -----------------------------------------------------------------------------------------
Total Noninterest Income 4
- -----------------------------------------------------------------------------------------
Salaries, benefits and payroll taxes 222
Premises and fixed asset expense 119
Other operating expense (Note 9) 471
- -----------------------------------------------------------------------------------------
Total Noninterest Expense 812
- -----------------------------------------------------------------------------------------
Loss Before Taxes (780)
Provision for income taxes (Note 10) ----
- -----------------------------------------------------------------------------------------
Net Loss ($780)
=========================================================================================
Earnings (loss) per share in accordance with APB 15 (Note 14) ($1.70)
- -----------------------------------------------------------------------------------------
Earnings (loss) per share applicable to public offering shares (Note 14) ($0.68)
=========================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 7
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Period from April 26, 1996 (inception)
to December 31, 1996
- -----------------------------------------------------------------------------------------------
Additional
Common Paid-in Accumulated Total
Stock Capital Deficit Equity
- -----------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C>
Balance April 26, 1996 (inception) $ ---- $ ---- $---- $ ----
Public stock offering 5,750 5,750 ---- 11,500
Stock offering costs ---- (980) ---- (980)
Net loss for period ---- ---- (780) (780)
- -----------------------------------------------------------------------------------------------
Balance December 31, 1996 $5,750 $4,770 ($780) $ 9,740
===============================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 8
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
Period from April 26, 1996
(inception) to December 31, 1996
- -----------------------------------------------------------------------------------------
(in thousands)
<S> <C>
Operating Activities
Net loss ($780)
Adjustments to reconcile net loss to net
cash flow from operating activities:
Provision for loan losses 90
Depreciation expense 76
Increase in accrued interest receivable (17)
Increase in other assets (226)
Increase in accrued interest payable 32
Increase in other liabilities 152
- -----------------------------------------------------------------------------------------
Net Cash Used in Operating Activities (673)
- -----------------------------------------------------------------------------------------
Investing Activities
Net increase in loans (5,578)
Purchases of property and equipment (772)
- -----------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (6,350)
- -----------------------------------------------------------------------------------------
Financing Activities
Net increase in demand and savings deposits 4,619
Net increase in time deposits 7,562
Repayments of capital lease obligation (20)
Proceeds from public stock offering 10,520
- -----------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 22,681
- -----------------------------------------------------------------------------------------
Increase in Cash and Cash Equivalents 15,658
Cash and Cash Equivalents at the Beginning
of the Period -----
- -----------------------------------------------------------------------------------------
Cash and Cash Equivalents at the End of the Period $15,658
=========================================================================================
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 10
=========================================================================================
Supplemental Disclosure of Non-Cash Transactions:
Capitalization of building lease (Note 6) $ 1,000
=========================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 9
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Community Central Bank Corporation (the
Corporation) conform to generally accepted accounting principles. Management is
required to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates and assumptions.
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Corporation and its wholly-owned subsidiary, Community Central
Bank (the Bank). All significant intercompany transactions are eliminated in
consolidation.
NATURE OF OPERATIONS: Community Central Bank conducts full-service commercial
and consumer banking and provides other financial products and services to
Michigan communities, primarily in Macomb County, through one office.
INTEREST AND FEE INCOME ON LOANS: Loans are generally reported at the principal
amount outstanding, net of unearned income. Non-refundable loan origination fees
and certain direct loan origination costs are deferred and included in interest
income over the term of the related loan as a yield adjustment. Interest on
loans is accrued and credited to income based upon the principal amount
outstanding. The accrual of interest on loans is discontinued when, in the
opinion of management, there is an indication that the borrower may be unable to
meet payments as they become due. Upon such discontinuance, all unpaid interest
accrued is reversed. Interest accruals are generally resumed when all
delinquent principal and/or interest has been brought current or the loan
becomes both well secured and in the process of collection.
ALLOWANCE FOR POSSIBLE LOAN LOSSES: The allowance for possible loan losses is
maintained at a level considered by management to be adequate to absorb losses
inherent in existing loans and loan commitments. The adequacy of the allowance
is based on evaluations that take into consideration such factors as prior loss
experience, changes in the nature and volume of the portfolio, overall portfolio
quality, loan concentrations, specific impaired or problem loans and
commitments, and current and anticipated economic conditions that may affect the
borrower's ability to pay.
PROPERTY AND EQUIPMENT: Property and equipment are stated at cost, less
accumulated depreciation and amortization. Depreciation, generally computed
using the double-declining balance method, is charged to operations over the
estimated useful lives of the assets. Leasehold improvements are amortized over
the terms of their respective leases or the estimated useful lives of the
improvements, whichever is shorter.
EARNINGS PER SHARE: Earnings per share are based on a weighted average number
of shares outstanding during the period. The dilutive effects of unexercised
stock options are not material.
STOCK OPTIONS: The Corporation applies Accounting Principles Board (APB)
Opinion 25, "Accounting for Stock Issued to Employees" and related
interpretations to account for its fixed-price stock option plans. Under these
plans, option prices are equal to the fair market value of the Corporation's
common stock on the date of grant. Accordingly, no compensation cost is
recognized as a result of options awarded under the plans.
6
<PAGE> 10
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(2) LOANS
Certain Directors and Executive Officers of the Corporation and their associates
were loan customers of the Bank during 1996. Such loans were made in the
ordinary course of business and do not involve more than a normal risk of
collectibility. The outstanding loan balance for these persons at December 31,
1996, amounted to $369,000. The total unused commitments related to these loans
were $205,000 at December 31, 1996.
The Corporation grants loans to customers who reside primarily in Macomb County.
Although the Corporation has a diversified loan portfolio, a substantial portion
of its debtors' ability to honor their contracts is dependent upon the
automotive industry. Additionally, at December 31, 1996, the Corporation had
$4,000,000 in residential real estate loans which were for one to four family
homes secured by mortgages, and $571,000 in commercial loans which were secured
by real estate mortgages.
(3) ALLOWANCE FOR LOAN LOSSES
A summary of the activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
1996
--------------
(in thousands)
<S> <C>
Balance, beginning of the period $ ----
Provision 90
Charge-offs ----
Recoveries ----
------
Balance, end of year $ 90
======
As a percentage of total loans 1.61%
======
</TABLE>
The Corporation considers a loan impaired when it is probable that all interest
and principal will not be collected in accordance with the contractual terms of
the loan agreement. Consistent with this definition, all nonaccrual and
reduced-rate loans (with the exception of residential mortgages and consumer
loans) are considered impaired. The Corporation had no loans classified as
impaired during the period ended December 31, 1996.
7
<PAGE> 11
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(4) PROPERTY AND EQUIPMENT
A summary of property and equipment as of December 31 is as
follows:
<TABLE>
<CAPTION>
1996
--------------
(in thousands)
<S> <C>
Buildings (under capitalized lease) $1,000
Leasehold improvements 325
Furniture and equipment 428
Vehicles 19
------
1,772
Less accumulated depreciation and amortization 76
------
Net property and equipment $1,696
======
</TABLE>
(5) DEPOSITS
The total amount of jumbo certificates of deposit (those over $100,000) as of
December 31, 1996, was $6,995,000.
As of December 31, 1996, scheduled maturities of all time deposits are as
follows:
Year ending December 31: (in thousands)
1997 $6,244
1998 1,288
2001 and thereafter 30
------
$7,562
======
8
<PAGE> 12
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(6) LEASES
The Corporation entered into a 15 year lease commitment for its office with an
entity in which two Directors have an ownership interest. The lease commenced
in November, 1996. The lease has been treated as a capital lease obligation,
and was recorded at the net present value of the future minimum lease payments
of $1,000,000, at an interest rate of approximately 13%.
Future minimum lease payments as of December 31, 1996, consist of the following:
Year ending December 31: (in thousands)
1997 $ 122
1998 138
1999 150
2000 150
2001 154
Subsequent years 1,825
------
Total minimum lease payments 2,539
Amount representing interest 1,519
-----
Present value of minimum lease payments $1,020
======
Operating expense includes lease rentals on certain equipment in the amount of
$3,000 for the period ended December 31, 1996. Following is a schedule of future
minimum rental payments required under operating leases that have remaining
lease terms in excess of one year as of December 31, 1996:
Year ending December 31: (in thousands)
1997 $16
1998 16
1999 15
2000 13
2001 1
---
Total minimum rental payments $61
===
9
<PAGE> 13
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(7) STOCKHOLDERS' EQUITY
The Corporation and the Bank are subject to various regulatory capital
requirements administered by Federal banking agencies. Failure to meet these
requirements can initiate certain mandatory (and possible additional
discretionary) actions by regulators. These actions, if undertaken, could have a
material effect on the Corporation's financial position. Under capital adequacy
guidelines, the Corporation and the Bank must meet specific capital requirements
that involve quantitative measures of assets, liabilities, and certain
off-balance sheet items. Capital amounts are also subject to qualitative
judgments by the regulators about individual components, risk-weightings, and
other factors.
Quantitative measures established by regulation require the Corporation and the
Bank to maintain minimum amounts and ratios of total and Tier I capital (as
defined in the regulations) to risk-weighted assets. The Corporation and the
Bank are also subject to a minimum leverage ratio of Tier I capital to average
assets (as defined). Management believes, as of December 31, 1996, that the
Corporation and the Bank meet all capital adequacy requirements to which they
are subject.
As of December 31, 1996, the most recent notification from the Federal Deposit
Insurance Corporation categorized the Bank as "well capitalized." There have
been no events or conditions since that notification that management believes
have changed the Bank's category.
The following table shows the Corporation's and the Bank's actual capital
amounts and ratios as of December 31, 1996, as well as certain minimum
requirements:
<TABLE>
<CAPTION>
Actual
--------------- For Capital To Be
Capital Ratio Adequacy Purposes "Well Capitalized"
------- ------ ----------------- ----------------
<S> <C> <C> <C> <C>
(in thousands)
Tier I capital to risk-weighted assets:
Consolidated $9,740 110.88% 4% 6%
Bank only $6,922 80.20% 4% 6%
Total capital to risk-weighted assets:
Consolidated $9,830 111.91% 8% 10%
Bank only $7,012 81.24% 8% 10%
Tier I capital to average assets (leverage):
Consolidated $9,740 66.70% 4% 5%
Bank only $6,922 61.09% 4% 5%
</TABLE>
10
<PAGE> 14
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(8) BENEFIT PLANS
DEFINED CONTRIBUTION PENSION PLAN - The Corporation has a 401(k) Plan which is a
defined contribution savings plan for employees. Employer contributions are
discretionary and are determined annually by the Board of Directors. Employer
contributions of $3,000 were paid or accrued for the period ended December 31,
1996.
STOCK OPTION PLANS - The Corporation has two stock-based compensation plans.
Under the 1996 Employee Stock Option Plan (Employee Plan), the Corporation may
grant options to key employees for up to 40,000 shares of common stock. Under
the 1996 Stock Option Plan for Nonemployee Directors (Director Plan), the
Corporation may grant options for up to 40,000 shares of common stock. Options
granted under the Employee Plan and Director Plan were 15,000 and 36,000,
respectively. Under both plans, only a portion of the options are immediately
exercisable. The remainder become exercisable on specified annual dates in the
future. Under both plans, the exercise price of each option equals the market
price of the Corporation's common stock at the date of grant. Under the Employee
Plan and Director Plan, an option's maximum term is ten and seven years,
respectively. Options under both plans vest based on the achievement of certain
events.
The Corporation has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards (SFAS) 123, "Accounting for Stock-Based
Compensation," but applies APB 25 and related interpretations in accounting for
its plans. The Corporation has estimated fair value of the options at $3 per
share, using a "minimum value" concept. If the Corporation had elected to
recognize compensation costs for the plans based on the fair value of awards at
the grant date, consistent with SFAS 123, net loss and loss per share on a pro
forma basis would have been as follows:
<TABLE>
<CAPTION>
Period from April 26, 1996
(inception) to December 31, 1996
-------------------------------------
(in thousands, except per share data)
<S> <C> <C>
Net loss As reported ($780)
Pro forma ($816)
======================
Net loss per share per APB 15 (Note 14) As reported ($1.70)
Pro forma ($1.77)
======================
Net loss per public offering share (Note 14) As reported ($0.68)
Pro forma ($0.71)
======================
</TABLE>
11
<PAGE> 15
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
Following is a summary of the Corporation's two stock option plans for the
period from April 26, 1996 (inception) to December 31, 1996:
<TABLE>
<CAPTION>
Number of Weighted Average
Shares Exercise Price
--------- ----------------
<S> <C> <C>
Outstanding, beginning of period ---- $ ----
Granted 51,000 10.00
------ ------
Outstanding, end of year 51,000 $10.00
====== ======
</TABLE>
The following table shows summary information about fixed stock options
outstanding at December 31, 1996:
<TABLE>
<CAPTION>
Stock Options Outstanding Stock Options Exercisable
- ------------------------------------------------------------------------ ---------------------------------
Weighted Average Weighted
Range of Number Remaining Weighted Average Number Average Exercise
Exercise Prices of Shares Contractual Life Exercise Price of Shares Price
- ------------------------------------------------------------------------ ---------------------------------
<S> <C> <C> <C> <C> <C>
$10 51,000 7.9 years $10 12,000 $10
</TABLE>
(9) OTHER OPERATING EXPENSE
The following is a summary of significant components of other operating expense
for the period from April 26, 1996 (inception) to December 31, 1996:
(in thousands)
Pre-opening and organization expenses $254
Data processing 70
Professional fees 50
Printing and supplies 36
Advertising and public relations 35
Telephone 8
Insurance 8
Other 10
____
Total other operating expense $471
====
12
<PAGE> 16
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(10) TAXES ON INCOME
The Corporation and the Bank file a consolidated Federal income tax return. No
tax credit has been provided for the future benefit of the net operating loss
carryforward generated during the period from April 26, 1996 (inception) to
December 31, 1996, since the Corporation does not have a history of earnings.
Net operating loss carryfowards available to reduce future taxable income total
approximately $646,000 through years ending 2011.
Deferred income taxes are provided for the temporary differences between the
financial reporting bases and the tax bases of the Corporation's assets and
liabilities. The sources of such temporary differences and the resulting net
deferred tax expense are as follows:
<TABLE>
<CAPTION>
Period from April 26, 1996
(inception) to December 31, 1996
--------------------------------
(in thousands)
<S> <C>
Net operating loss carryforward ($220)
Provision for loan losses (26)
Depreciation (17)
Deferred loan fees (8)
Original issue discount 8
Other (1)
Increase in valuation allowance 264
-----
Net deferred tax expense $ --
=====
</TABLE>
The temporary differences and carryforwards which comprise deferred tax assets
and liabilities at December 31, 1996, are as follows:
(in thousands)
Deferred tax assets:
Net operating loss carryforward $ 220
Provision for loan losses 26
Depreciation 17
Deferred loan fees 8
Other 1
-----
Total deferred tax assets 272
Valuation allowance (264)
Deferred tax liabilities:
Original issue discount (8)
-----
Net deferred tax asset (liability) $ ---
=====
13
<PAGE> 17
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(11) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
Estimates of fair value of financial instruments have been determined using
available market information and appropriate valuation methods, as outlined
below. Considerable judgment is inherently required to interpret market data to
develop the estimates of fair value. Accordingly, the estimates presented below
do not necessarily represent amounts that the Corporation could realize in a
current market exchange. The following methods and assumptions were used to
estimate the fair value of financial instruments:
CASH AND CASH EQUIVALENTS: For these short term instruments, the carrying
amount is a reasonable estimate of fair value.
LOANS: For variable rate loans with no significant change in credit risk since
loan origination, the carrying amount is a reasonable estimate of fair value.
For all other loans, including fixed rate loans, the fair value is estimated
using a discounted cash flow analysis, using interest rates currently offered on
similar loans to borrowers with similar credit ratings and for the same
remaining maturities. The resulting value is reduced by an estimate of losses
inherent in the portfolio.
DEPOSITS: The estimated fair value of demand deposits, certain money market
deposits, and savings deposits is the amount payable on demand at the reporting
date. The fair value of fixed maturity time deposits is estimated using the
rates currently offered for deposits of similar remaining maturities.
ACCRUED INTEREST: Accrued interest receivable and payable are short term in
nature; therefore, their carrying amount approximates fair value.
COMMITMENTS: Commitments to extend credit and standby letters of credit are not
recorded on the balance sheet. The fair value of commitments is estimated using
the fees currently charged to enter into similar arrangements, taking into
account the remaining terms of the agreements and the present creditworthiness
of the counterparties. The fair value of letters of credit is based on fees
currently charged for similar agreements, or on the estimated cost to terminate
them or otherwise settle the obligations with the counterparties at the
reporting date. The fair value of commitments at December 31, 1996, is not
material.
The use of different market assumptions and/or estimation methods may have a
material effect on the estimated fair value amounts.
14
<PAGE> 18
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
The recorded carrying amounts and estimated fair values of the
Corporation's financial instruments at December 31, 1996, are as
follows:
<TABLE>
<CAPTION>
Carrying Estimated
Amount Fair Value
----------------------------
(in thousands)
<S> <C> <C>
FINANCIAL ASSETS:
Cash and cash equivalents $15,658 $15,658
Loans, net of allowance 5,488 5,488
Accrued interest receivable 17 17
FINANCIAL LIABILITIES:
Demand and savings deposits 4,619 4,619
Time deposits 7,562 7,562
Accrued interest payable 32 32
</TABLE>
(12) OFF-BALANCE SHEET RISK
The Corporation is party to financial instruments with off-balance sheet risk in
the normal course of business, to meet financing needs of its customers and to
reduce its own exposure to fluctuations in interest rates. These financial
instruments include commitments to extend credit and financial guarantees. These
instruments involve, to varying degrees, elements of credit and interest rate
risk that are not recognized in the balance sheet.
Commitments to extend credit are agreements to lend to a customer as long as
there are no violations of any conditions established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Fees from issuing these commitments to extend
credit are recognized over the period to maturity. Since a portion of the
commitments is expected to expire without being drawn upon, the total
commitments do not necessarily represent future cash requirements. The
Corporation evaluates each customer's creditworthiness on a case by case basis.
The amount of collateral obtained upon extension of credit is based on
management's credit evaluation of customers.
The Corporation had outstanding loan origination commitments, including
overdraft lines of credit, aggregating $766,000 at December 31, 1996, of which
$169,000 was outstanding at year end and included in the Corporation's balance
sheet.
(13) RESTRICTIONS ON DIVIDENDS
Banking regulations limit the amount of dividends that the Bank can declare and
pay to the Corporation without prior regulatory approval. For 1997, the Bank
could declare an amount equal to 1997 "net profits" plus 1996 "retained profits"
as defined in the Federal Reserve Act.
15
<PAGE> 19
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(14) EARNINGS PER SHARE
Earnings (loss) per share is calculated in accordance with APB 15, "Earnings Per
Share." Accordingly, the denominator average number of shares outstanding is
based on the actual number of shares issued and outstanding during the period.
For the period from April 26, 1996 (inception) through the Corporation's initial
public stock offering on September 23, 1996, there was one share of stock
outstanding. APB 15 therefore prescribes a weighted average calculation which
includes the non-public time period when only one share was outstanding.
Following is a comparison of the calculated loss per share (APB 15) with the per
share calculation which applies only to the shares outstanding since the initial
public stock offering:
<TABLE>
<CAPTION>
(in thousands, except per share data)
<S> <C>
Net loss ($780)
Weighted average number of
shares outstanding from inception
through December 31, 1996 460
-------
Net loss per share in accordance with APB 15 ($1.70)
=======
Net loss ($780)
Weighted average number of
shares outstanding from date of public
offering through December 31, 1996 1,150
-------
Net loss per share applicable to public offering shares ($0.68)
=======
</TABLE>
16
<PAGE> 20
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(15) PARENT-ONLY FINANCIAL STATEMENTS
The following condensed financial information presents the financial condition
of the Parent Holding Company (the Parent) only, along with the results of its
operations and its cash flow. The Parent has recorded its investment in the Bank
at cost, less the undistributed loss of the Bank since it was formed. The
Parent recognizes undistributed losses of the Bank as a noninterest expense.
The Parent-only financial information should be read in conjunction with the
Corporation's consolidated financial statements.
<TABLE>
<CAPTION>
BALANCE SHEET
- --------------------------------------------------------------------------------
ASSETS December 31, 1996
- --------------------------------------------------------------------------------
(in thousands)
<S> <C>
Cash $2,667
Investment in subsidiary 6,922
Other assets 151
- --------------------------------------------------------------------------------
Total Assets $9,740
================================================================================
- --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Total Liabilities $ ----
- --------------------------------------------------------------------------------
Common stock 5,750
Additional paid-in capital 4,770
Accumulated deficit (780)
- --------------------------------------------------------------------------------
Total Stockholders' Equity 9,740
- --------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $9,740
================================================================================
</TABLE>
17
<PAGE> 21
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(15) PARENT-ONLY FINANCIAL STATEMENTS (CONTINUED)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Period from April 26, 1996 (inception)
to December 31, 1996
- ------------------------------------------------------------------------------------------
(in thousands)
<S> <C>
OPERATING INCOME
Interest income on short-term investments $ 59
- ------------------------------------------------------------------------------------------
Total Operating Income 59
- ------------------------------------------------------------------------------------------
OPERATING EXPENSE
Other expenses 261
- ------------------------------------------------------------------------------------------
Total Operating Expense 261
- ------------------------------------------------------------------------------------------
Loss Before Share
in Undistributed Loss of Subsidiary (202)
Share in undistributed loss of
subsidiary (578)
- ------------------------------------------------------------------------------------------
Net Loss ($780)
==========================================================================================
</TABLE>
18
<PAGE> 22
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Period from April 26, 1996 (inception) to December 31, 1996
(15) PARENT-ONLY FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOW
Period from April 26, 1996 (inception)
to December 31, 1996
- -------------------------------------------------------------------------------------------
(in thousands)
<S> <C>
OPERATING ACTIVITIES
Net loss ($780)
Adjustments to reconcile net loss to net cash
flow from operating activities
Undistributed loss of subsidiary 578
Increase in other assets (151)
- -------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities (353)
- -------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Capital contribution to subsidiary (7,500)
- -------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (7,500)
- -------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from public stock offering 10,520
- -------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 10,520
- -------------------------------------------------------------------------------------------
Increase in Cash 2,667
Cash at the Beginning of the Period -----
- -------------------------------------------------------------------------------------------
Cash at the End of the Period $ 2,667
===========================================================================================
</TABLE>
19
<PAGE> 23
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
The following plan of operation and analysis of the Corporation's operating
results and financial condition for the period from April 26, 1996 (inception)
to December 31, 1996, should be read in conjunction with the financial
statements and statistical data presented elsewhere.
PLAN OF OPERATION
The Corporation's plan of operation for the next twelve months is to raise funds
by attracting deposits. Management does not contemplate the need to raise
additional funds by other means. Based on current growth projections, management
believes that the Corporation is likely to have adequate funds to meet its cash
requirements for at least the next several years. The Corporation is in the
process of testing telephone and computer banking services to be provided by its
data processing vendor, but has no other plans for product research and
development which would be performed within the next 12 months. During the next
twelve months, the Corporation does not anticipate the need for any additional
equipment expenditures. Also, no significant changes are expected in staffing
levels over that same period.
NET INTEREST INCOME
The Corporation expects net interest income to be its principal source of future
income. During the period from April 26, 1996 (inception) to December 31, 1996,
net interest income was $118,000. The Corporation's net interest margin for the
period was 3.44%. Net interest income can be expected to increase significantly
in the future, as funds are moved from short term investments into higher
yielding, longer term loans and securities. This will be accomplished as the
Corporation develops its deposit base and loan portfolio.
20
<PAGE> 24
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
AVERAGE BALANCE SHEETS
The following table shows the Corporation's consolidated average balances of
assets, liabilities, and equity; the amount of interest income or interest
expense and the average yield or rate for each category of interest earning
asset and interest bearing liability; and the net interest margin for the period
indicated. Interest on loans includes loan fees.
<TABLE>
<CAPTION>
Period from April 26, 1996 (inception)
to December 31, 1996
- ---------------------------------------------------------------------------------
Average
Interest Rate
Average Income/ Earned/
Balance Expense Paid
------- -------- -------
(in thousands)
<S> <C> <C> <C>
Assets:
Federal funds sold $4,493 $158 5.15%
Loans 536 42 11.47
------ ---- -----
Total Earning Assets/
Total Interest Income 5,029 200 5.82%
---- -----
Cash and due from banks 373
All other assets 772
------
Total Assets $6,174
======
Liabilities and Equity:
NOW and money market accounts $ 275 7 3.94%
Savings deposits 44 1 2.41
Time deposits 881 34 5.57
Capitalized lease obligation 439 40 13.38
------ ---- -----
Total Interest Bearing Liabilities/
Total Interest Expense 1,639 82 7.30%
---- -----
Noninterest bearing
demand deposits 252
All other liabilities 149
Stockholders' equity 4,134
------
Total Liabilities and Equity $6,174
=======
Net Interest Income $118
====
Net Interest Margin (Net Interest
Income/Total Earning Assets) 3.44%
====
</TABLE>
21
<PAGE> 25
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
ALLOWANCE AND PROVISION FOR LOAN LOSSES
It is the Corporation's practice to maintain the allowance for loan losses at a
level adequate to provide for reasonably foreseeable losses. Management's
evaluation is based on a continuing review of the loan portfolio and includes,
but is not limited to, consideration of actual loss experience, the present and
prospective financial condition of borrowers, adequacy of collateral, industry
concentrations within the portfolio, and general economic conditions. As of
December 31, 1996 the Corporation's allowance for possible loan losses was 1.61%
of outstanding loans.
LIQUIDITY AND ASSET/LIABILITY MANAGEMENT
The liquidity of a bank allows it to provide funds to meet loan requests, to
accommodate possible outflows in deposits, and to take advantage of other
investment opportunities. Funding of loan requests, providing for liability
outflows, and managing interest rate margins require continuous analysis in
order to match the maturities of specific categories of loans and investments,
with specific types of deposits and borrowings. Bank liquidity is thus normally
considered in terms of the nature and mix of the banking institution's sources
and uses of funds. For the Corporation, the major sources of liquidity have
been federal funds sold and loans (including demand loans). At December 31,
1996 federal funds sold amounted to $14.3 million. Loans (including demand
loans) amounted to $5.6 million at December 31, 1996. The Corporation's large
deposits which might experience volatile rate changes are closely monitored.
These deposits consist mainly of jumbo time certificates of deposit, of which
the balance was $7.0 million at December 31, 1996.
Managing rates on earning assets and interest bearing liabilities focuses on
maintaining stability in the net interest spread, an important factor in
earnings growth and stability. Emphasis is placed on maintaining a controlled
rate sensitivity position, to avoid wide swings in spreads and to manage risk
due to changes in interest rates.
22
<PAGE> 26
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
The following table shows the maturity and repricing distribution of the
Corporation's interest earning assets and interest bearing liabilities as of
December 31, 1996, the interest rate sensitivity gap (i.e., interest rate
sensitive assets less interest rate sensitive liabilities), cumulative interest
rate sensitivity gap, the interest rate sensitivity gap ratio (i.e., interest
rate sensitive assets divided by interest rate sensitive liabilities), and the
cumulative interest rate sensitivity gap ratio. For the purposes of the
following table, an asset or liability is considered rate sensitive within a
period when it matures or could be repriced within such period, generally in
accordance with its contractual terms.
<TABLE>
<CAPTION>
After Three After Six After One
Within Months But Months But Year But After
Three Within Within Within Five
Months Six Months One Year Five Years Years Total
------ ----------- ---------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
(in thousands)
Interest earning assets:
Federal funds sold $14,300 $----- $------ $------ $------ $14,300
Loans 1,149 65 39 2,549 1,776 5,578
------- ------ ------- ------- ------- -------
Total 15,449 65 39 2,549 1,776 19,878
Interest bearing liabilities:
NOW and money market accounts 2,724 ------ ------ ------ ------ 2,724
Savings deposits 276 ------ ------ ------ ------ 276
Jumbo time deposits 6,995 ------ ------ ------ ------ 6,995
Time deposits < $100,000 ------ 10 35 492 30 567
Capitalized lease obligation ------ ------ ------ 29 991 1,020
------- ------ ------- ------- ------- -------
Total 9,995 10 35 521 1,021 11,582
------- ------ ------- ------- ------- -------
Interest rate sensitivity gap 5,454 55 4 2,028 755 8,296
Cumulative interest rate
sensitivity gap $ 5,454 $5,509 $ 5,513 $ 7,541 $ 8,296 $ 8,296
Interest rate sensitivity gap ratio 1.55 6.50 1.11 4.89 1.74 1.72
Cumulative interest ratio
sensitivity gap ratio 1.55 1.55 1.55 1.71 1.72 1.72
</TABLE>
The table above indicates the time periods in which interest earning assets and
interest bearing liabilities will mature or may be repriced, generally in
accordance with their contractual terms. However, this table does not
necessarily indicate the impact of general interest rate movements on the
Corporation's net interest yield because the repricing of various categories of
assets and liabilities is discretionary and is subject to competitive and other
pressures. As a result, various assets and liabilities indicated as repricing
within the same period may in fact reprice at different times and at different
rate levels.
Based on the table above, the Corporation is considered to be asset sensitive in
the one-year maturity range at December 31, 1996. In a rising rate environment,
the Corporation might be able to increase prices on interest earning assets
faster than the increase in rates on interest bearing liabilities.
The Corporation is also developing a computer model to simulate the effects of
possible interest rate changes. As a general rule, estimated negative exposure
to changing interest rates would be limited to 5% of net interest income. The
exposure estimate will be based on a variety of assumptions built into the
model, and assumed interest rate changes of plus or minus 200 basis points. The
results of this analysis will be reported to the Board of Directors to assist in
the interest rate risk management process.
23
<PAGE> 27
COMMUNITY CENTRAL BANK CORPORATION
STOCKHOLDER INFORMATION
SEC FORM 10-KSB
Copies of the Corporation's annual report on Form 10-KSB, as filed with the
Securities and Exchange Commission are available to stockholders without charge,
upon written request. Please mail your request to Peter J. Przybocki, CPA;
Corporate Treasurer, Community Central Bank Corporation, 100 North Main Street,
PO Box 7, Mount Clemens, MI 48046-0007.
STOCK INFORMATION
The common stock of Community Central Bank Corporation is traded on the OTC
Bulletin Board section of The Nasdaq Stock Market (NASDAQ) under the ticker
symbol "CCBD." At December 31, 1996, there were approximately 200 record
holders of the Corporation's common stock.
The following table shows the high and low bid prices by quarter during the
period from the date of the Corporation's public stock offering (September 23,
1996) through the end of the year. The quotations reflect bid prices as
reported by NASDAQ, and do not include retail mark-up, mark-down or dealer
commission.
<TABLE>
<CAPTION>
1996 Bid Prices
---------------
Cash
Dividends
Quarter High Low Declared
-----------------------------------
<S> <C> <C> <C>
Fourth $10.50 $ 9.75 $ --
Third 10.00 10.00 --
</TABLE>
MARKET MAKERS
At December 31, 1996, the following firms were registered with NASDAQ as market
makers in Community Central Bank Corporation common stock:
Roney and Co. First of Michigan Corporation
One Griswold 100 Renaissance Center, 26th Floor
Detroit, Michigan 48226 Detroit, MI 48243
Ryan, Beck & Co. Monroe Securities, Inc.
80 Main Street 47 State Street
West Orange, New Jersey 07052 Rochester, New York 14614
24
<PAGE> 28
COMMUNITY CENTRAL BANK CORPORATION
STOCKHOLDER INFORMATION
STOCK REGISTRAR AND TRANSFER AGENT
Boston EquiServe
PO Box 1728
Boston, Massachusetts 02105-1728
INDEPENDENT AUDITORS
Plante & Moran, LLP
505 N. Woodward Avenue, Suite 2000
Bloomfield Hills, MI 48304-2979
INFORMATION
News media representatives and those seeking additional information about the
Corporation should contact Richard J. Miller, President, at (810) 783-4500, or
by writing him at 100 North Main Street, PO Box 7, Mount Clemens, MI
48046-0007.
ANNUAL MEETING
This year's Annual Meeting will be held at 10:00 A.M., on Tuesday, April 15,
1997, at Hillcrest Banquet and Convention Center, 50 South Groesbeck Highway,
Clinton Township, MI 48036.
25
<PAGE> 1
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
EXHIBIT 20
PROXY STATEMENT OF THE CORPORATION
DATED MARCH 17, 1997
14
<PAGE> 2
COMMUNITY CENTRAL BANK CORPORATION
100 NORTH MAIN STREET
PO BOX 7
MOUNT CLEMENS, MI 48046-0007
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 15, 1997
TO THE HOLDERS OF SHARES OF COMMON STOCK OF
COMMUNITY CENTRAL BANK CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
COMMUNITY CENTRAL BANK CORPORATION will be held at the Hillcrest Banquet &
Convention Center, 50 South Groesbeck Highway, Clinton Township, Michigan, on
Tuesday, April 15, 1997, at 10:00 A.M., for the purpose of considering and
voting upon the following matters:
1. ELECTION OF DIRECTORS. To elect three Class I directors for a three
year term, as detailed in the accompanying Proxy Statement.
2. OTHER BUSINESS. To transact such other business as may properly be
brought before the meeting or any adjournment or adjournments thereof.
Only those stockholders of record at the close of business on Thursday,
March 6, 1997, shall be entitled to notice of and to vote at the meeting.
We urge you to sign and return the enclosed proxy as promptly as possible,
whether or not you plan to attend the meeting in person. We would appreciate
receiving your proxy by Tuesday, April 8, 1997.
By Order of the Board of Directors,
Harold W. Allmacher Richard J. Miller
Chairman of the Board & President & Chief Operating Officer
Chief Executive Officer
Dated: March 17, 1997
<PAGE> 3
COMMUNITY CENTRAL BANK CORPORATION
100 NORTH MAIN STREET
PO BOX 7
MOUNT CLEMENS, MI 48046-0007
March 17, 1997
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished to stockholders of Community Central
Bank Corporation (the Corporation) in connection with the solicitation of
proxies by the Board of Directors of the Corporation, for use at the Annual
Meeting of stockholders of the Corporation to be held on Tuesday, April 15,
1997, at 10:00 A.M., at the Hillcrest Banquet and Convention Center, 50 South
Groesbeck Highway, Clinton Township, MI and at any and all adjournments
thereof. It is expected that the proxy materials will be mailed to
stockholders on or about March 17, 1997.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its exercise. Unless the proxy is revoked, the
shares represented thereby will be voted at the Annual Meeting or any
adjournment thereof.
The entire cost of soliciting proxies will be borne by the Corporation.
Proxies may be solicited by mail or telegraph, or by directors, officers, or
regular employees of the Corporation or its subsidiary, in person or by
telephone. The Corporation will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their out-of-pocket expenses for
forwarding soliciting material to the beneficial owners of Common Stock of the
Corporation.
The Board of Directors, in accordance with the By-Laws of the Corporation,
has fixed the close of business on March 6, 1997 as the record date for
determining the stockholders entitled to notice of and to vote at the Annual
Meeting and at any and all adjournments thereof.
At the close of business on such record date, the outstanding number of
voting securities of the Corporation was 1,150,000 shares of Common Stock, each
of which is entitled to one vote.
ELECTION OF DIRECTORS
The Corporation's Certificate of Incorporation and By-Laws provide that
the number of directors, as determined from time to time by the Board of
Directors, shall be no less than six and no more than fifteen. The Board of
Directors has presently fixed the number of directors at eleven. The
Certificate of Incorporation and By-Laws further provide that the directors
shall be divided into three classes, Class I, Class II and Class III, with each
class serving a staggered three year term and with the number of directors in
each class being as nearly as equal as possible.
The Board of Directors has nominated Joseph Catenacci, Raymond Contesti,
and Celestina Giles as Class I directors for three year terms expiring at the
2000 Annual Meeting and
1
<PAGE> 4
upon election and qualification of their successors. Each of the nominees is
presently a Class I director of the Corporation whose term expires at the April
15, 1997 Annual Meeting of the shareholders. The other members of the Board,
who are Class II and Class III directors, will continue in office in accordance
with their previous elections until the expiration of their terms at the 1998
or 1999 Annual Meeting, as the case may be.
It is the intention of the persons named in the enclosed proxy to vote
such proxy for the election of the three nominees listed herein. The proposed
nominees for election as directors are willing to be elected and serve; but in
the event that any nominee at the time of election is unable to serve or is
otherwise unavailable for election, the Board of Directors may select a
substitute nominee, and in that event the persons named in the enclosed proxy
intend to vote such proxy for the person so selected. If a substitute nominee
is not so selected, such proxy will be voted for the election of the remaining
nominees. The affirmative vote of a plurality of the votes cast at the meeting
is required for the nominees to be elected.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents information regarding the beneficial
ownership of the Corporation's Common Stock as of February 1, 1997, by the
nominees for election as directors of the Corporation, the directors of the
Corporation whose terms of office will continue after the Annual Meeting, the
executive officer named in the Summary Compensation Table, and all directors
and executive officers of the Corporation as a group.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Name of Beneficial Owner Amount Percent of Class
Beneficially Beneficially Owned
Owned (1)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Harold W. Allmacher................................................. 38,030 (2) 3.25%
Gebran S. Anton..................................................... 27,000 (3) 2.31%
Joseph Catenacci.................................................... 27,000 (3) 2.31%
Raymond M. Contesti................................................. 17,000 (3) 1.45%
Salvatore Cottone................................................... 27,000 (3) 2.31%
Celestina Giles..................................................... 10,200 (2) 0.87%
Bobby L. Hill....................................................... 13,000 (3) 1.11%
Joseph F. Jeannette................................................. 27,000 (3) 2.31%
Richard J. Miller................................................... 11,000 (2) 0.94%
Dean S. Petitpren................................................... 27,000 (3) 2.31%
Carole L. Schwartz.................................................. 27,000 (3) 2.31%
All directors and executive officers of the
Corporation as a group (11 persons) .............................. 251,230 21.49%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Some or all of the Common Stock listed may be held jointly with, or for the
benefit of, spouses and children of, or various trusts established by, the
person indicated.
(2) Includes 1,000 shares that such person has the right to acquire within 60
days of March 17, 1997, pursuant to the Corporation's 1996 Employee Stock
Option Plan. Such person also holds an option under this Plan to purchase
an additional 4,000 shares, which has not yet vested.
(3) Includes 2,000 shares that such person has the right to acquire within 60
days of March 17, 1997, pursuant to the Corporation's 1996 Stock Option
Plan for Nonemployee Directors. Such person also holds an option under
this Plan to purchase an additional 2,000 shares, which has not yet vested.
2
<PAGE> 5
The table below shows the beneficial ownership of the Corporation's Common
Stock by each person who was known by the Corporation to own beneficially more
than 5% of the Corporation's Common Stock as of February 1, 1997. The
information is based on filings that have been made by such persons with the
Securities and Exchange Commission and other information that has been provided
to the Corporation by such person. To the best of the Corporation's knowledge,
no other person owns more than 5% of the Corporation's outstanding Common
Stock.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Name and Address Shares Percent of
of Beneficial Owner Beneficially Common
Owned Stock
- -----------------------------------------------------------------------------
<S> <C> <C>
Willard G. Pierce 200,000 17.4%
820 West Clinton Street
Hastings, MI 49058
</TABLE>
3
<PAGE> 6
INFORMATION ABOUT DIRECTORS AND NOMINEES AS DIRECTORS
The following information is furnished with respect to each person who is
presently a director of the Corporation whose term of office will continue
after the Annual Meeting of stockholders, as well as those persons who have
been nominated for election as a director, each of whom is presently a director
of the Corporation as well as a director of Community Central Bank (the Bank),
which is the Corporation's subsidiary.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Has Served Year When Term
as Director or Proposed Term
Name, Age, Principal Occupation Since of Office Expires
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Harold W. Allmacher, 57 ...................................................... 1996 1999
Chairman of the Board and Chief Executive Officer;
Community Central Bank Corporation and Community Central Bank
Gebran S. Anton, 64 .......................................................... 1996 1999
Co-owner; Anton, Zorn & Associates (Commercial & Industrial
Real Estate Brokerage)
President; Gebran Anton Development Co. (Real Estate Development)
Joseph Catenacci, 61 ......................................................... 1996 1997
Executive Vice President; John Carlo, Inc. (Highway and Heavy
Construction)
Raymond M. Contesti, 61 ...................................................... 1996 1997
Superintendent; Clintondale Community Schools
Salvatore Cottone, 56 ........................................................ 1996 1998
President; Resco, Inc. (Real Estate Development)
Celestina Giles, 49 .......................................................... 1996 1997
Corporate Secretary;
Community Central Bank Corporation and Community Central Bank
Bobby L. Hill, 65 ............................................................ 1996 1998
County Commissioner; Macomb County Board of Commissioners
Joseph F. Jeannette, 52 ..................................................... 1996 1999
Assistant Director; Utica Community Schools
Richard J. Miller, 38 ....................................................... 1996 1998
President and Chief Operating Officer;
Community Central Bank Corporation and Community Central Bank
Dean S. Petitpren, 54 ....................................................... 1996 1998
President; Petitpren, Inc. (Beer Distributor)
Carole L. Schwartz, 59 ....................................................... 1996 1999
Commissioner; Zoning Board of Appeals
President; Shannon Management Company (Property Management)
(1990 - 1992)
</TABLE>
In addition Harold W. Allmacher, Richard J. Miller, and Celestina Giles held
similar positions with Old Kent Bank - Macomb (formerly First National Bank in
Macomb County) for substantially all of the previous five years.
4
<PAGE> 7
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Corporation has standing Audit and Compensation Committees of the
Board of Directors.
The members of the Audit Committee consist of Salvatore Cottone, Chairman;
Bobby L. Hill, Joseph F. Jeannette, and Carole L. Schwartz. The Audit
Committee's responsibilities include recommending to the Board of Directors the
selection of independent accountants, approving the scope of audit and
non-audit services performed by the independent accountants, reviewing the
results of their audit, reviewing the Corporation's internal auditing
activities and financial statements, and reviewing the Corporation's system of
accounting controls and recordkeeping.
The members of the Compensation Committee consist of Raymond M. Contesti,
Joseph F. Jeannette and Carole L. Schwartz. The Compensation Committee's
responsibilities include considering and recommending to the Board of Directors
any changes in compensation and benefits for officers of the Corporation. At
present, all officers of the Corporation are also officers of the Bank, and
although they receive compensation from the Bank in their capacity as officers
of the Bank, they presently receive no separate cash compensation from the
Corporation. The Compensation Committee is responsible for awarding incentive
stock options to executive management of the Corporation and the Bank.
The Board of Directors is responsible for reviewing and making
recommendations as to the size and composition of the Board of Directors,
nominating candidates for election as directors at the annual meetings, and
filling any vacancies that may occur between annual meetings. The Board of
Directors will consider as potential nominees persons recommended by
stockholders. Recommendations should be submitted to the Board of Directors in
care of Harold W. Allmacher, Chairman and CEO of the Corporation. Each
recommendation should include a personal biography of the suggested nominee, an
indication of the background or experience that qualifies such person for
consideration, and a statement that such person has agreed to serve if
nominated and elected. Stockholders who themselves wish to effectively
nominate a person for election to the Board of Directors, as contrasted with
recommending a potential nominee to the Board of Directors for its
consideration, are required to comply with the advance notice and other
requirements set forth in the Corporation's Articles of Incorporation.
During the period from April 26, 1996 (inception) to December 31, 1996,
there were a total of seven meetings of the Board of Directors of the
Corporation. Each director attended at least 75% of the total number of
meetings of the Board of Directors held during the period that the director
served. There were no meetings of the Audit Committee and one meeting of the
Compensation Committee during 1996.
During 1996, no compensation was paid to any directors of the Corporation
for their services in such capacities.
Members of the Corporation's Board of Directors who are not employees of
the Corporation or any of its affiliates (Nonemployee Directors), each received
an option to purchase 4,000 shares of Common Stock of the Corporation at the
public offering price of $10 per share, pursuant to the Corporation's 1996
Stock Option Plan for Nonemployee Directors which was approved on June 1, 1996.
Under this Plan, each option was immediately exercisable for 1,000
5
<PAGE> 8
shares when granted. Thereafter, as of the date of each Annual Meeting, each
option is exercisable for an additional 1,000 shares until it is exercisable in
full. Each option expires not later than seven years after its date of grant.
Nonemployee Directors who are appointed or elected after June 1, 1996 will
receive an option for a lesser number of shares, the number of which will
depend on which annual meeting is the first annual meeting occurring
concurrently with, or after he or she becomes a Nonemployee Director.
REPORT OF THE COMPENSATION COMMITTEE
The Securities and Exchange Commission (SEC) has set rules regarding the
presentation of certain statistical information with regard to salaries and
certain benefits paid to each corporation's CEO and the four most highly
compensated individuals earning over $100,000. This information along with the
Report of the Compensation Committee is presented below. The Corporation's and
the Board's policies and practices pertaining to executive officer compensation
have been in practice since inception.
All employees of the Corporation are also employees of the Bank. All
employees salaries as such are paid by the Bank.
The Bank's Compensation Committee, which is made up of the same directors
as the Corporation's Compensation Committee, is responsible for setting the
salary levels of all officers of the Bank, including its executive officers.
Following review and approval by the Bank's Compensation Committee, all issues
pertaining to officer and executive salaries are submitted to the full Board of
Directors of the Bank for approval.
Salaries and Bonuses
In setting the salary level of and awarding bonuses to the named executive
in the Summary Compensation Table and other executive officers, the
compensation amounts are set based upon the Compensation Committee's perception
of the performance of such persons. The Compensation Committee looks at many
factors which may include, but are not limited to:
- Overall performance of the Bank and Corporation as compared to
strategic goals
- Performance of the Bank and Corporation as compared to peers
- Length of service to the Bank and Corporation
- Comparisons of salary levels to similar executives within the industry
- The performance of the Corporation's common stock
- The executive's leadership of the Bank and its employees
- The executive's stature in the community and his value as a
representative of the Bank and Corporation
Employee Stock Option Plan
Under the Corporation's 1996 Employee Stock Option Plan, stock options are
granted to the Bank's senior management and other key employees. The
Compensation Committee of the Corporation is responsible for awarding the stock
options. These awards are based on the Committee's perception of the
performance of such persons. These options are also awarded to give senior
management and key employees an additional interest in the Corporation from the
stockholders' perspective.
6
<PAGE> 9
SUMMARY COMPENSATION TABLE
The following table details the compensation received by the named
executive for the period from April 26, 1996 (inception) to December 31, 1996:
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
- -------------------------------------------------------- ------------
Name and
Principal All Other
Position Year Salary Bonus Options Compensation
--------- ---- ------ ----- ------- ------------
<S> <C> <C> <C> <C> <C>
Harold W. Allmacher,
CEO ............................ 1996 $31,154 None 5,000 None
</TABLE>
OPTIONS GRANTED IN 1996
The following table provides information on options granted to the named
executive during the period from April 26, 1996 (inception) to December 31,
1996:
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------------
Number of % of Total
Shares Options
Underlying Granted to Exercise or
Options Employees Base Price Expiration
Name Granted in 1996 Per Share (1) Date
---- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Harold W. Allmacher,
CEO ......................... 5,000 33.3% $10.00 6-1-2006
</TABLE>
_________________
(1) The exercise price equals the price at which the Corporation offered its
stock to the public in its initial public offering. The exercise price may be
paid in cash, by the delivery of previously owned shares, or a combination
thereof.
7
<PAGE> 10
AGGREGATED STOCK OPTION EXERCISES IN 1996
AND YEAR END OPTION VALUES
The following table provides information on the exercise of stock options
during the year ended December 31, 1996 by the named executive and the value of
unexercised options at December 31, 1996:
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired on Value 12/31/96 12/31/96
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Harold W. Allmacher,
CEO ................. None N/A 1,000/4,000 $500/$2,000
</TABLE>
CERTAIN TRANSACTIONS
The Bank has had, and expects in the future to have, loan and other
financial transactions in the ordinary course of business with the
Corporation's directors, executive officers, and principal stockholders (and
their associates) on substantially the same terms as those prevailing for
comparable transactions with others. All such transactions (i) were made in
the ordinary course of business, (ii) were made on substantially the same
terms, including interest rates and collateral on loans, as those prevailing at
the time for comparable transactions with other persons, and (iii) in the
opinion of management did not involve more than the normal risk of
collectibility or present other unfavorable features.
8
<PAGE> 11
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Plante & Moran, LLP as the
Corporation's principal independent auditors for the year ending December 31,
1997. Representatives of Plante & Moran plan to attend the Annual Meeting of
stockholders, will have the opportunity to make a statement if they desire to
do so, and will respond to appropriate questions by stockholders.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
A proposal submitted by a stockholder for the 1998 Annual Meeting of
stockholders must be sent to the Secretary of the Corporation, 100 North Main
Street, PO Box 7, Mount Clemens, MI 48046-0007, and received by November 17,
1997 in order to be eligible to be included in the Corporation's Proxy
Statement for that meeting.
OTHER MATTERS
The Board of Directors does not know of any other matters to be brought
before the Annual Meeting. If other matters are presented upon which a vote
may properly be taken, it is the intention of the persons named in the proxy to
vote the proxies in accordance with their best judgment.
9
<PAGE> 1
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
EXHIBIT 21
SUBSIDIARIES OF THE ISSUER
Name of State or Jurisdiction of
Subsidiary Incorporation or Organization Description
- ---------------------- ----------------------------- ------------
Community Central Bank State of Michigan A State Bank
15
<PAGE> 1
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITOR
We consent to the incorporation by reference in this Annual Report on Form
10-KSB of Community Central Bank Corporation for the year period December 31,
1996, of our report dated February 3, 1997, included in the 1996 Stockholder
Report of Community Central Bank Corporation.
S/ PLANTE & MORAN, LLP
- ----------------------
Bloomfield Hills, Michigan
March 25, 1997
16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM COMMUNITY CENTRAL BANK
CORPORATION'S CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1996, AND THE
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM APRIL 26, 1996
(INCEPTION) TO DECEMBER 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,358
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 14,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 5,578
<ALLOWANCE> 90
<TOTAL-ASSETS> 23,085
<DEPOSITS> 12,181
<SHORT-TERM> 0
<LIABILITIES-OTHER> 144
<LONG-TERM> 1,020
0
0
<COMMON> 5,750
<OTHER-SE> 3,990
<TOTAL-LIABILITIES-AND-EQUITY> 23,085
<INTEREST-LOAN> 42
<INTEREST-INVEST> 0
<INTEREST-OTHER> 158
<INTEREST-TOTAL> 200
<INTEREST-DEPOSIT> 42
<INTEREST-EXPENSE> 82
<INTEREST-INCOME-NET> 118
<LOAN-LOSSES> 90
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 812
<INCOME-PRETAX> (780)
<INCOME-PRE-EXTRAORDINARY> (780)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (780)
<EPS-PRIMARY> (1.70)
<EPS-DILUTED> (1.70)
<YIELD-ACTUAL> 3.44
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 90
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 90
</TABLE>
