<PAGE> 1
CONFORMED
---------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999 Commission File No. 333-04113
-----------------
COMMUNITY CENTRAL BANK CORPORATION
----------------------------------
(Name of small business issuer in its charter)
<TABLE>
<CAPTION>
<S> <C>
Michigan 38-3291744
-------- ----------
(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 $13,201,000
As of March 22, 2000, 2,420,024 shares of Common Stock of the issuer
were outstanding. The aggregate market value of voting stock of the registrant
held by nonaffiliates was approximately $10.9 million as of March 22, 2000;
based on the average of the bid and asked prices ($5.78) on that date. (For
purposes of this calculation, 535,000 shares owned by the members of the
Corporation's Board of Directors have been excluded.)
DOCUMENTS INCORPORATED BY REFERENCE:
Part II Part of Stockholder Report of the issuer
for the year ended December 31, 1999.
Part III Part of the Proxy Statement of the issuer for its
April 18, 2000 Annual Meeting.
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 expenses of the Corporation have generally been paid using the
proceeds of its two public stock offerings. The Corporation's principal source
of future operating funds is expected to be dividends from the Bank.
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 allowed 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, and provides safe deposit facilities. The Bank has
three automated teller machines ("ATM") which participate 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 a system to perform certain transactions by
telephone or personal computer. In 1999, the Corporation opened a Loan Center in
Port Huron, Michigan, serving small to medium-sized business accounts in the St.
Clair County area.
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. Monetary policy is used to, among other
things, attempt to 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.
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. It may be required to file 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 closely related to banking or managing or controlling banks. The Federal
Reserve Board is empowered to differentiate between activities by a bank holding
company, or a subsidiary, 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, 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. Acquisitions across state lines are subject to certain state and Federal
Reserve Board restrictions.
EMPLOYEES
As of December 31, 1999, the Corporation and the Bank employed 37
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.
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, fees charged on deposit accounts, and interest rates
charged on loans. With respect to services, the Bank offers a customer service
oriented atmosphere which management believes is better suited to its customers'
needs than that which is offered by other institutions in the local market.
3
<PAGE> 4
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
LEGAL LENDING LIMIT
Pursuant to state regulations, the Bank is limited in the amount that
it may lend to a single borrower. As of December 31, 1999, the legal lending
limit was approximately $2.4 million; however, that limit can be expanded (for
individual loans) to approximately $3.9 million with 2/3 approval of the Board
of Directors.
RETURN ON EQUITY AND ASSETS
The following table contains selected ratios:
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Return on average total assets 0.57% 0.96% (3.55%)
Return on average equity 5.45% 10.40% (22.20%)
Dividend payout ratio NA NA NA
Average equity to average assets 10.40% 9.22% 16.00%
</TABLE>
ADDITIONAL STATISTICAL DATA
The additional consolidated statistical information shown under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" on pages 30 to 37 of the Stockholder Report of the Corporation
for the year ended December 31, 1999 included in Exhibit 13 to this Report (the
"Stockholder Report") is incorporated here by reference.
ITEM 2. DESCRIPTION OF PROPERTY
The Bank leases a 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 capital
resources, results of operations, or liquidity.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
4
<PAGE> 5
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 38
of the Stockholder Report is incorporated hereby reference.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information shown under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 30 to 37 of
the Stockholder Report is incorporated here by reference.
ITEM 7. FINANCIAL STATEMENTS
The information presented under the captions "Consolidated Balance
Sheet," "Consolidated Statement of Operations," "Consolidated Statement of
Comprehensive Income," "Consolidated Statement of Changes in Stockholders'
Equity," "Consolidated Statement of Cash Flow," and "Notes to Consolidated
Financial Statements," on pages 1 through 29 of the Stockholder Report, as well
as the Independent Auditor's Report of Plante & Moran, LLP, dated January 28,
2000, included in the Stockholder Report, are incorporated here by reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
5
<PAGE> 6
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The information listed under the caption "Information about Directors
and Nominees as Directors" in the Proxy Statement of the Corporation for its
Annual Meeting of Stockholders to be held on April 18, 2000 included as Exhibit
20 to this Report (the "Proxy Statement") is incorporated here by reference.
EXECUTIVE OFFICERS
The following is a list of the executive officers of the Corporation,
together with their ages and their positions at December 31, 1999. 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
Chairman of the Board and
Chief Executive Officer 1996 - present 60
Andrew Tassopoulos
President 1999 - present 39
Ray T. Colonius
Corporate Treasurer 1999 - present 42
</TABLE>
Mr. Allmacher held a similar position with Old Kent Bank - Macomb for
substantially all of the two year period prior to the inception of the
Corporation. Mr. Tassopoulos held various officer positions with Old Kent Bank -
Macomb for substantially all of the two year period prior to joining the
Corporation.
Effective February 19, 1999, Mr. Miller resigned from his positions of
Chief Operating Officer and President of the Corporation and the Bank. On March
2, 1999, Mr. Tassopoulos was named President of the Corporation and the Bank.
Effective July 30, 1999, Mr. Przybocki resigned from his positions of Treasurer
and Executive Vice President - Chief Financial Officer of the Corporation and
the Bank. Effective December 7, 1999, Mr. Colonius was named Vice President and
Chief Financial Officer of the Bank and Treasurer of the Corporation.
ITEM 10. EXECUTIVE COMPENSATION
The information detailed in the last three paragraphs under the caption
"Board of Directors Meetings and Committees," and under the captions "Summary
Compensation Table," "Options Granted in 1999" and "Aggregated Stock Option
Exercises in 1999 and Year End Option Values" in the Proxy Statement is
incorporated here by reference.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the caption "Stock Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated here by
reference.
6
<PAGE> 7
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the caption "Certain Transactions" in the Proxy
Statement is incorporated here by reference.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
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
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
10.3 Lease Agreement between the Corporation and
T.A.P. Properties, LLC, 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
10.4 Vicant Office Building Lease Agreement dated April 1,
1997, between Gebran S. Anton, Jr. and the Bank is
incorporated by reference to exhibit 10.5 of the
Corporation's Registration Statement on Form SB-2
(Commission File No. 333-58475) which became
effective August 25, 1998
10.5 *1999 Stock Option Plan for Directors
11 *Computation of Per Share Earnings
13 **Proxy Statement and 1999 Annual Report of the
Corporation. Except for the portions of the Proxy
Statement and 1999 Annual Report that are expressly
incorporated by reference in this Annual Report of
Form 10-KSB, the Proxy Statement and 1999 Annual
Report of the Corporation shall not be deemed filed
as a part thereof
20 Proxy Statement of the Corporation for its April
18, 2000 Annual Meeting is included as part of
the Proxy Statement and 1999 Annual Report of the
Corporation that are set forth as Exhibit 13 on
this Annual Report on Form 10-KSB. Except for the
portions of the Proxy Statement and 1999 Annual
Report that are expressly incorporated by
reference in this Annual Report on Form 10KSB,
the Proxy Statement and 1999 Annual Report of the
Corporation shall not be deemed filed as a part
hereof
21 Subsidiaries of the Issuer is incorporated by
reference to exhibit 21 of the Corporation's Annual
Report on Form 10-KSB for the fiscal year ended
December 31, 1998 (Commission File No. 333-04113)
23 *Consent of Independent Auditor
27 *Financial Data Schedule
*Previously Filed
**Filed Herewith
(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.
7
<PAGE> 8
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 April 3, 2000:
COMMUNITY CENTRAL BANK CORPORATION
/S/ HAROLD W. ALLMACHER
--------------------------------
Harold W. Allmacher, Chairman of the
Board and Chief Executive Officer
(Principal Executive Officer)
/S/ ANDREW TASSOPOULOS
--------------------------------
Andrew Tassopoulos, President
/S/ RAY T. COLONIUS
--------------------------------
Ray T. Colonius, 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 April 3, 2000:
/S/ HAROLD W. ALLMACHER /S/ BOBBY L. HILL
- ---------------------------------- --------------------------------
Harold W. Allmacher, Chairman of the Bobby L. Hill, Director
Board
/S/ GEBRAN S. ANTON /S/ JOSEPH F. JEANNETTE
- ---------------------------------- --------------------------------
Gebran S. Anton, Director Joseph F. Jeannette, Director
/S/ JOSEPH CATENACCI /S/ DEAN S. PETITPREN
- ---------------------------------- --------------------------------
Joseph Catenacci, Director Dean S. Petitpren, Director
/S/ RAYMOND M. CONTESTI /S/ CAROLE L. SCHWARTZ
- ---------------------------------- --------------------------------
Raymond M. Contesti, Director Carole L. Schwartz, Director
/S/ SALVATORE COTTONE /S/ ANDREW TASSOPOULOS
- ---------------------------------- --------------------------------
Salvatore Cottone, Director Andrew Tassopoulos, Director
/S/ CELESTINA GILES /S/ ANTHONY R. TERSIGNI
- ---------------------------------- --------------------------------
Celestina Giles, Director Anthony R. Tersigni, Director
/S/ DAVID A. WIDLAK
--------------------------------
David A. Widlak, Director
8
<PAGE> 9
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
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
10.3 Lease Agreement between the Corporation and
T.A.P. Properties, LLC, 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
10.4 Vicant Office Building Lease Agreement dated April 1,
1997, between Gebran S. Anton, Jr. and the Bank is
incorporated by reference to exhibit 10.5 of the
Corporation's Registration Statement on Form SB-2
(Commission File No. 333-58475) which became
effective August 25, 1998
10.5 * 1999 Stock Option Plan for Directors
11 * Computation of Per Share Earnings
13 ** Proxy Statement and 1999 Annual Report of the
Corporation. Except for the portions of the Proxy
Statement and 1999 Annual Report that are expressly
incorporated by reference in this Annual Report of
Form 10-KSB, the Proxy Statement and 1999 Annual
Report of the Corporation shall not be deemed filed
as a part thereof
20 Proxy Statement of the Corporation for its April
18, 2000 Annual Meeting is included as part of
the Proxy Statement and 1999 Annual Report of the
Corporation that are set forth as Exhibit 13 on
this Annual Report on Form 10-KSB. Except for the
portions of the Proxy Statement and 1999 Annual
Report that are expressly incorporated by
reference in this Annual Report on Form 10KSB,
the Proxy Statement and 1999 Annual Report of the
Corporation shall not be deemed filed as a part
hereof
21 Subsidiaries of the Issuer is incorporated by
reference to exhibit 21 of the Corporation's Annual
Report on Form 10-KSB for the fiscal year ended
December 31, 1998 (Commission File No. 333-04113)
23 * Consent of Independent Auditor
27 * Financial Data Schedule
* Previously filed
** Filed Herewith
9
<PAGE> 1
COMMUNITY CENTRAL BANK CORPORATION
FORM 10-KSB (continued)
EXHIBIT 13
PROXY STATEMENT AND
1999 ANNUAL REPORT OF THE CORPORATION
<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 18, 2000
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 Fern Hill Country Club,
17600 Clinton River, Clinton Township, Michigan, on Tuesday, April 18, 2000, at
8:00 A.M., for the purpose of considering and voting upon the following matters:
1. ELECTION OF DIRECTORS. To elect five Class I directors for a three
year term, as detailed in the accompanying Proxy Statement.
2. APPROVAL OF 2000 EMPLOYEE STOCK OPTION PLAN. To approve the 2000
Employee Stock Option Plan, as detailed in the accompanying Proxy Statement.
3. 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 Friday,
February 25, 2000, shall be entitled to notice of and to vote at the meeting.
We urge you to sign and return the enclosed proxy ballot as promptly as
possible, whether or not you plan to attend the meeting in person. We would
appreciate receiving your proxy ballot by Tuesday, April 11, 2000.
By Order of the Board of Directors,
Harold W. Allmacher Andrew Tassopoulos
Chairman of the Board and President
Chief Executive Officer
Dated: March 23, 2000
<PAGE> 3
COMMUNITY CENTRAL BANK CORPORATION
100 NORTH MAIN STREET
PO BOX 7
MOUNT CLEMENS, MI 48046-0007
March 23, 2000
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 18,
2000, at 8:00 A.M., at the Fern Hill Country Club, 17600 Clinton River, Clinton
Township, Michigan, and at any and all adjournments of the meeting. The proxy
materials were mailed to stockholders on or about March 23, 2000.
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 by it will be voted at the Annual Meeting or any
adjournment of the meeting.
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 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 February 25, 2000, 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 of the meeting.
At the close of business on the record date, the outstanding number of
voting securities of the Corporation was 2,420,024 shares of common stock, each
of which is entitled to one vote. A majority of the outstanding shares will
constitute a quorum at the meeting. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for the
transaction of business.
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 15. The Board of Directors
has presently fixed the number of directors at 13. 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 equal as possible.
1
<PAGE> 4
The Board of Directors has nominated Joseph Catenacci, Raymond M.
Contesti, Celestina Giles, Anthony R. Tersigni and David A. Widlak, as Class I
directors for three year terms expiring at the 2003 Annual Meeting, and 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
18, 2000, Annual Meeting of Stockholders. 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 2001 or 2002
Annual Meeting.
It is the intention of the persons named in the enclosed proxy to vote
the proxy for the election of the five nominees. 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 the proxy for the person so selected. If a substitute nominee is not
selected, the proxy will be voted for the election of the remaining nominees.
The affirmative vote of a plurality of the votes cast is required for the
nominees to be elected. Votes withheld and broker non-votes are not counted
toward a nominee's total.
2
<PAGE> 5
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, 2000, by each of
the directors (and nominees for election) of the Corporation whose terms of
office will continue after the Annual Meeting, each of the executive officers
named in the summary compensation table, and all directors and executive
officers of the Corporation as a group.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Amount Percent of Class
Beneficially Beneficially Owned
Name of Beneficial Owner Owned (1) (6)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Harold W. Allmacher ............................................ 85,872 (2) 3.54%
Gebran S. Anton ................................................ 62,686 (3) 2.58%
Joseph Catenacci ............................................... 59,059 (3) 2.44%
Raymond M. Contesti ............................................ 31,570 (3) 1.30%
Salvatore Cottone .............................................. 54,076 (3) 2.23%
Celestina Giles ................................................ 17,658 (4) 0.73%
Bobby L. Hill .................................................. 20,173 (3) 0.83%
Joseph F. Jeannette ............................................ 70,030 (3) 2.89%
Dean S. Petitpren .............................................. 93,125 (3) 3.84%
Carole L. Schwartz ............................................. 42,861 (3) 1.77%
Andrew Tassopoulos ............................................. 26,075 (5) 1.07%
Anthony R. Tersigni ............................................ 11,179 (6) 0.46%
David A. Widlak ................................................ 32,400 1.34%
All directors and executive officers of the
Corporation as a group (14 persons) .......................... 607,764 (7) 24.39%
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Some or all of the common stock listed may be held jointly with, or for
the benefit of, spouses or relatives of, or various trusts established
by, the person indicated.
(2) Includes options to purchase 8,524 shares exercisable within 60 days of
February 1, 2000.
(3) Includes options to purchase 5,324 shares exercisable within 60 days of
February 1, 2000.
(4) Includes options to purchase 7,524 shares exercisable within 60 days of
February 1, 2000.
(5) Includes options to purchase 11,193 shares exercisable within 60 days of
February 1, 2000.
(6) Includes options to purchase 1,331 shares exercisable within 60 days of
February 1, 2000.
(7) Includes options to purchase 72,164 shares exercisable within 60 days of
February 1, 2000.
(8) The percentages shown are based on 2,420,024 shares of the Corporation's
common stock outstanding, plus the number of shares that the named
person or group has the right to acquire within 60 days.
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, 2000. The
number of shares beneficially owned is based on 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 and Jessie M. Pierce Foundation 202,675 8.37%
820 West Clinton Street
Hastings, MI 49058
</TABLE>
3
<PAGE> 6
INFORMATION ABOUT DIRECTORS AND NOMINEES AS DIRECTORS
The following table shows certain information about the directors of
the Corporation. The directors listed are those whose term of office will
continue after the Annual Meeting, as well as those persons who have been
nominated for election as a director. All of the directors listed are also
directors of the Corporation's subsidiary, Community Central Bank (the "Bank").
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Has Served Year When Term
as a Director or Proposed Term
Name, Age, Principal Occupation Since of Office Expires
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Harold W. Allmacher, 60 ........................................................ 1996 2002
Chairman of the Board and Chief Executive Officer
of the Corporation and the Bank
Andrew Tassopoulos, 39 ......................................................... 1999 2001
President of the Corporation and the Bank
Gebran S. Anton, 67 ............................................................ 1996 2002
Co-owner; Anton, Zorn & Associates (Commercial & Industrial
Real Estate Brokerage)
President; Gebran Anton Development Co. (Real Estate Development)
Joseph Catenacci, 64 ........................................................... 1996 2000
Executive Vice President; John Carlo, Inc. (Highway and Heavy
Construction)
Raymond M. Contesti, 64 ........................................................ 1996 2000
Superintendent; Clintondale Community Schools
Salvatore Cottone, 59 .......................................................... 1996 2001
President; Resco, Inc. (Real Estate Development)
Celestina Giles, 52 ............................................................ 1996 2000
(Customer Service Representative of the Bank)
Bobby L. Hill, 67 .............................................................. 1996 2001
County Commissioner; Macomb County Board of Commissioners
Joseph F. Jeannette, 55 ........................................................ 1996 2002
Assistant Director; Utica Community Schools
Dean S. Petitpren, 57 .......................................................... 1996 2001
President; Petitpren, Inc. (Beer Distribution)
Carole L. Schwartz, 62 ......................................................... 1996 2002
Commissioner; Zoning Board of Appeals
Anthony R. Tersigni, 50 ........................................................ 1998 2000
President and Chief Executive Officer; St. John Health System
David A. Widlak, 51 ............................................................ 1999 2000
Attorney-at-law
</TABLE>
In addition Harold W. Allmacher and Celestina Giles held similar
positions with Old Kent Bank - Macomb (formerly First National Bank in Macomb
County) for substantially all of the two year period prior to the inception of
the Corporation and the Bank.
There are no family relationships among any of the Corporation's
directors or executive officers.
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 an independent auditing firm, approving the scope of
audit and non-audit services performed by them, 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 (Chairman), 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 also
responsible for administering the Corporation's 1996 Employee Stock Option Plan.
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 of the Board and Chief Executive Officer
("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 for
its consideration, are required to comply with the advance notice and other
requirements detailed in the Corporation's Articles of Incorporation.
During the year ended December 31, 1999, there were a total of eleven
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 and
committees of the Board on which the director served that were held in 1999
during the period that the director served. There was one meeting of the Asset
Liability Committee, three meetings of the Audit Committee and two meetings of
the Compensation Committee during 1999.
During 1999, each member of the board was paid $500 per month, in
aggregate, for services as a director of the Corporation and the Bank.
Additionally, directors received $150 for each committee meeting attended. For
the year 2000, each director will receive $1,000 per month, in aggregate for all
services for the Corporation and the Bank.
5
<PAGE> 8
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 5,324 shares of common stock of the Corporation
at a price of $7.51 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 1,331 shares when granted.
Thereafter, as of the date of each annual meeting, each option became
exercisable for an additional 1,331 shares until the 1999 Annual Meeting, at
which time it became exercisable in full. Each option expires not later than
seven years after its date of grant. Nonemployee directors who were appointed or
elected after June 1, 1996, and at or before the 1999 Annual Meeting, received
an option for a lesser number of shares, the number of which depended on which
annual meeting was the first annual meeting occurring concurrently with, or
after he or she became a nonemployee director.
Under the Corporation's 1999 Stock Option Plan for Nonemployee
Directors, which was approved on March 2, 1999, the nonemployee directors and
the Chairman of the Board of the Corporation received an option to purchase
4,000 shares of common stock of the Corporation at a price of $9.50 per share.
Under this plan, each option is exercisable for 1,000 shares as of the 2000
Annual Meeting, and for an additional 1,000 shares as of each subsequent Annual
Meeting until it becomes exercisable in full. Each option expires not later than
seven years after its date of grant.
REPORT OF THE COMPENSATION COMMITTEE
The Securities and Exchange Commission ("SEC") has set rules for the
presentation of certain statistical information regarding salaries and certain
benefits paid to each corporation's chief executive officer, 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 general 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.
In setting the salary level of and awarding bonuses to the named
executives 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 compared to
strategic goals
- Performance of the Bank and Corporation 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 or her value as a
representative of the Bank and the Corporation
6
<PAGE> 9
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 options are awarded to give senior management and other key
employees an additional interest in the success, profitability, and future
growth of the Bank and the Corporation. In making grants, the Compensation
Committee may consider the position and responsibilities of the employee, the
value of his or her services and accomplishments, and such other factors as they
deem relevant. Only a portion of the options are exercisable when granted. The
remainder become exercisable on specified annual dates in the future. The
exercise price of each option equals the market price of the Corporation's
common stock on the grant date. The Plan permits a maximum option term of 10
years.
SUMMARY COMPENSATION TABLE
The following table details the compensation awarded, earned, or paid
to the named executive officers for the three years ended December 31, 1999:
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
--------------------- --------------
Name and
Principal All Other
Position Year Salary Bonus Options Compensation(1)
-------- ---- ----- ----- ------------ -------------
<S> <C> <C> <C> <C> <C>
Harold W. Allmacher, 1999 $67,077 $16,000 9,500 $ 0
Chairman of the Board and 1998 $90,600 $16,400 0 $ 0
Chief Executive Officer 1997 $67,500 $ 0 0 $ 0
Andrew Tassopoulos, 1999 $97,200 $16,000 5,500 $3,408(1)
President 1998 $90,600 $16,400 0 $2,700
1997 $73,100 $ 0 6,050 $2,200
</TABLE>
(1) Consists of employer matching contributions for the Bank's 401(K) plan.
7
<PAGE> 10
OPTIONS GRANTED IN 1999
The following table provides information on options granted to the
named executive officers during the year ended December 31, 1999:
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------
Number of % of Total
Shares Options
Underlying Granted to Exercise or
Options Employees Base Price Expiration
Name Granted in 1999 Per Share Date
- ----------------- --------- --------- ---------- --------
<S> <C> <C> <C> <C>
Harold W. Allmacher 5,500 21% $9.37 02-16-2009
4,000 15% $9.50 04-20-2006
Andrew Tassopoulos 5,500 21% $9.37 02-16-2009
</TABLE>
AGGREGATED STOCK OPTION EXERCISES IN 1999 AND YEAR END OPTION VALUES
The following table provides information on the exercise of stock
options during the year ended December 31, 1999, by the named executive
officers, and the value of unexercised options at December 31, 1999:
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised "In-the-Money"
Shares Options at Options at
Acquired on Value 12-31-1999 12-31-1999 (1)
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ----------------- --------- --------- ------------------------- ---------------------------
<S> <C> <C> <C> <C>
Harold W. Allmacher None N/A 6,424 / 9,731 $0 / $0
Andrew Tassopoulos None N/A 5,093 / 7,062 $0 / $0
</TABLE>
(1) Values are calculated by subtracting the exercise price of the option from
the fair market value of the underlying common stock. For purposes of this
table, fair market value is deemed to be $6.19 per share, the average of the
closing low bid and high asked prices reported by the OTC Bulletin Board as
of December 31, 1999.
8
<PAGE> 11
CERTAIN TRANSACTIONS
The Bank has had, and expects to have in the future, loan and other
financial transactions in the ordinary course of business with the Corporation's
directors, executive officers, and principal stockholders and their associates.
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.
The main office building of the Corporation and the Bank is being
leased from T.A.P. Properties, LLC, a company owned by two directors; Gebran S.
Anton and Dean S. Petitpren. The lease commenced in 1996 and has a term of 15
years. The Bank also leases an office suite in a building that is owned by Mr.
Anton. The lease has a term of five years, and commenced in 1997. The terms of
these leases and rent payments thereunder are similar to those prevailing at the
time they were signed, for comparable leases in the local market.
9
<PAGE> 12
PROPOSAL TO APPROVE
2000 EMPLOYEE STOCK OPTION PLAN
The Corporation believes that stock options are an important component
of the compensation that should be available to award to executive officers and
other key employees. Stock options can provide employees a long-term incentive
to increase shareholder value and align their interests more closely with that
of the Corporation's stockholders. Stock options give employees the opportunity
to participate in growth in the value of the Corporation, and enhance its
ability to retain and attract experienced and knowledgeable employees.
In 1996, the Corporation adopted the 1996 Employee Stock Option Plan.
That plan included up to 53,240 shares for which options could be granted. As of
December 31, 1999, options for 40,458 shares had been issued to executive
officers and other key employees; and in February of 2000, options for the
remaining 12,782 shares were issued.
On February 1, 2000, The Corporation's Board of Directors approved the
2000 Employee Stock Option Plan (the "Plan"), subject to the approval of the
stockholders. The Plan is intended to make additional stock options available to
be granted by the Board of Directors to present and new employees of the
Corporation or any subsidiary. Pursuant to the Plan, stock options may be
granted which qualify under the Internal Revenue Code as incentive stock options
or as stock options that do not qualify as incentive stock options. The Board
believes that the interests of the Corporation and its stockholders will be
advanced by implementing the Plan.
SUMMARY OF THE PLAN
The following description of the Plan is intended to be a summary of
its principal features.
ADMINISTRATION. The Plan will be administered by the Board of Directors
of the Corporation. The Board of Directors will make determinations with respect
to the officers and other employees who will participate in the Plan and the
extent of their participation, including the type of option. In making the
determinations, the Board of Directors may consider the position and
responsibilities of the employee, the nature and value of his or her services
and accomplishments, the present and potential contribution of the employee to
the success of the Corporation, and other factors that the Board of Directors
may believe are relevant. The Corporation has approximately 43 employees, 11 of
whom work part-time.
SHARES. The total number of shares of Common Stock that may be issued
under the Plan will not exceed 60,000 shares (subject to adjustment for certain
events as described below). The shares will be authorized but unissued shares
(including shares reacquired by the Corporation).
OPTION AGREEMENT. Each option granted under the Plan will be evidenced
by an agreement in the form approved from time to time by the Board of
Directors. The agreements are subject to the provisions of the Plan. Options
granted under the Plan may be incentive stock options or non-qualified options,
as determined from time to time by the Board of Directors for each option.
OPTION PRICE. The option price will not be less than the fair market
value of the shares of Common Stock at the time the option is granted, except in
the case of an incentive stock option granted to a 10% shareholder. For options
granted to a 10% shareholder, the option price will be not less than 110% of
fair market value. For purposes of the Plan, fair market value per share means
the average of the closing high bid and low asked prices of the Common Stock on
the OTC Bulletin Board (the "Bulletin Board"), or if the Common Stock has become
quoted on The Nasdaq Stock Market
10
<PAGE> 13
("Nasdaq"), then on Nasdaq instead; or if the Common Stock is not quoted on
either the Bulletin Board or Nasdaq, a value determined by any fair and
reasonable means prescribed by the Board of Directors. The option price will be
paid in cash or through the delivery of previously owned shares of the
Corporation's Common Stock, or by a combination of cash and Common Stock. As of
March 10, 2000, the fair market value of a share of Common Stock was $5.94.
DURATION OF OPTIONS. The duration of each option will be determined by
the Board of Directors, except that (1) the maximum duration may not exceed ten
years from the date of grant, and (2) for incentive stock options granted to
persons who own 10% or more of the Corporation's stock, the duration of the
options may not exceed five years from the date of grant. The Board of Directors
will determine at the time of grant whether the option will be exercisable in
full or in cumulative installments.
Generally, an option may be exercised by an optionee during its term
while he or she is an employee of the Corporation or a subsidiary. If the
employment of an optionee terminates, the option may be exercised, to the extent
that it was exercisable on the date of termination, only until the earlier of
three months after the termination or the original expiration date of the
option. However, if termination of employment results from death or total and
permanent disability, the three month period will be extended to twelve months.
ADJUSTMENTS. The Board of Directors may make appropriate adjustments in
the number of shares of Common Stock for which options may be granted or which
may be issued under the Plan and the price per share of each option if there is
any change in the Common Stock as a result of a stock dividend, stock split,
recapitalization or otherwise.
CHANGE IN CONTROL. In the case of a change in control (as defined in
the Plan) of the Corporation, unless the Board of Directors determines
otherwise, each option then outstanding will become exercisable in full
immediately prior to the change in control.
TERMINATION OF PLAN AND AMENDMENTS. No option may be granted under the
Plan after December 31, 2009. The Board of Directors may from time to time amend
or terminate the Plan. No amendment or termination of the Plan will adversely
affect any option then outstanding under the Plan without the approval of the
optionee.
FEDERAL INCOME TAX CONSEQUENCES. The grant of a non-qualified option or
incentive stock option has no federal tax consequences for the optionee or the
Corporation. Upon the exercise of a non-qualified option, the optionee is deemed
to realize taxable income to the extent that the fair market value of the shares
of Common Stock exceeds the option price. The Corporation is entitled to a tax
deduction for such amounts at the date of exercise. If any stock received upon
the exercise of a non-qualified option is later sold, any excess of the sale
price over the fair market value of the stock at the date of exercise is taxable
to the optionee.
No taxable income results to the optionee upon the exercise of an
incentive stock option if the incentive stock option is exercised during the
period of the optionee's employment or within three months after, except in the
case of disability or death. However, the amount by which the fair market value
of the stock acquired pursuant to an incentive stock option exceeds the option
price is a tax preference item which may result in the imposition on the
optionee of an alternative minimum tax. If no disposition of the shares is made
within two years from the date the incentive stock option was granted and one
year from the date of exercise, any profit realized upon disposition of the
shares may be treated as a long-term capital gain by the optionee. The
Corporation will not be entitled to a tax deduction upon the exercise of an
incentive stock option, nor upon a disposition of the shares unless the
disposition occurs before the expiration of the holding periods.
11
<PAGE> 14
Under the terms of the Plan, the aggregate market value (determined at
the time the option is granted) of the stock with respect to which incentive
stock options are exercisable for the first time in any year by any optionee may
not exceed $100,000.
REQUIRED VOTE
The affirmative vote of a majority of the Common Stock of the
Corporation present in person or by proxy at the meeting and voting on the
proposal will be necessary to approve the Plan. For purposes of counting votes
on this proposal, abstentions and broker non-votes will not be counted as shares
voted on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE 2000 EMPLOYEE STOCK OPTION PLAN.
SELECTION OF INDEPENDENT AUDITOR
The Board of Directors has selected Plante & Moran, LLP as the
Corporation's principal independent auditor for the year ending December 31,
2000. 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 2001 ANNUAL MEETING
A proposal submitted by a stockholder for the 2001 Annual Meeting of
Stockholders should be sent to Lisa Medlock; Corporate Secretary, at 100 North
Main Street, PO Box 7, Mount Clemens, MI 48046-0007. Proposals must be received
by November 23, 2000, 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.
12
<PAGE> 15
COMMUNITY CENTRAL BANK CORPORATION
Independent Auditor's Report
and
Stockholder Report
December 31, 1999
<PAGE> 16
[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, 1999 and 1998, and the related consolidated
statements of operations, comprehensive income, changes in stockholders' equity,
and cash flow for the years ended December 31, 1999, 1998 and 1997. 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 audits 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 audits provide 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, 1999, and 1998, and the results of its
operations and cash flow for the years ended December 31, 1999, 1998 and 1997,
in conformity with generally accepted accounting principles.
/s/ PLANTE & MORAN, LLP
January 28, 2000
Troy, Michigan
<PAGE> 17
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
----------------------------
1999 1998
--------- ---------
(in thousands)
<S> <C> <C>
Assets
Cash and Cash Equivalents
Cash and due from banks (Note 2) $ 5,692 $ 6,162
Federal funds sold 20,700 19,300
-------- --------
Total Cash and Cash Equivalents 26,392 25,462
Securities available for sale, at fair value (Note 3) 9,546 9,766
Investment securities, at amortized cost (Note 3)
(Fair value of $4.6 million at 12-31-1999,
$9.4 million at 12-31-1998) 4,638 9,276
Loans (Note 4)
Residential mortgage loans 29,920 33,867
Commercial loans 105,574 64,098
Installment loans 5,818 4,439
-------- --------
Total Loans 141,312 102,404
Allowance for credit losses (Note 5) (1,927) (1,330)
-------- --------
Net Loans 139,385 101,074
Net property and equipment (Note 6) 1,893 1,739
Accrued interest receivable 843 655
Other assets 1,027 963
-------- --------
Total Assets $183,724 $148,935
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 18
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
-------------------------
1999 1998
--------- --------
(in thousands, except share data)
<S> <C> <C>
Liabilities
Deposits
Noninterest bearing demand deposits $ 16,540 $ 13,124
NOW and money market accounts 21,366 18,644
Savings deposits 8,803 2,971
Time deposits (Note 7) 116,137 92,413
-------- --------
Total deposits 162,846 127,152
Short term borrowings (Note 8) 1,605 3,491
Accrued interest payable 442 280
Other liabilities 306 227
Capitalized lease obligation (Note 9) 1,025 1,036
ESOP note payable (Note 10) 471 ---
-------- --------
Total Liabilities 166,695 132,186
Stockholders' Equity (Note 11)
Common stock ($5 stated value; 9,000,000 shares authorized,
2,420,024 shares issued and outstanding at 12-31-1999,
2,196,455 shares issued and outstanding at 12-31-1998) 12,100 10,982
Additional paid-in capital 6,226 7,312
Accumulated deficit (682) (1,608)
Unearned employee benefit (471) ---
Accumulated other comprehensive income (144) 63
-------- --------
Total Stockholders' Equity 17,029 16,749
-------- --------
Total Liabilities and Stockholders' Equity $183,724 $148,935
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 19
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------
1999 1998 1997
--------- --------- ---------
(in thousands, except per share data)
<S> <C> <C> <C>
Interest Income
Loans (including fees) $10,514 $7,163 $2,708
Securities 1,013 1,333 707
Federal funds sold 1,021 486 534
------- ------- ------
Total Interest Income 12,548 8,982 3,949
Interest Expense
Deposits 6,208 4,818 2,095
Short term borrowings 101 82 29
Capitalized lease obligation 139 139 137
ESOP loan interest expense 24 --- ---
------- ------ ------
Total Interest Expense 6,472 5,039 2,261
------- ------ ------
Net Interest Income 6,076 3,943 1,688
Provision for credit losses (Note 5) 851 530 710
------- ------ ------
Net Interest Income after Provision for Credit Losses 5,225 3,413 978
Noninterest Income
Deposit service charges 270 173 66
Net gain (loss) on calls of securities 11 22 (1)
Mortgage banking income 108 87 66
Other income 264 159 53
------- ------ ------
Total Noninterest Income 653 441 184
Noninterest Expense
Salaries, benefits and payroll taxes (Note 12) 1,755 1,665 1,389
Premises and fixed asset expense 572 545 617
Other operating expense (Note 13) 2,005 1,314 1,088
------- ------ ------
Total Noninterest Expense 4,332 3,524 3,094
------- ------ ------
Income Before Taxes and Cumulative Effect of
Change in Accounting Principle 1,546 330 (1,932)
Provision for Income Tax Expense (Benefit) (Note 14) 563 (774) ---
------- ------ ------
Income Before Cumulative Effect of Change in
Accounting Principle 983 1,104 (1,932)
Cumulative Effect of Change in Accounting Principle,
Net of Tax of $29 (57) ---- ---
------- ------ ------
Net Income $ 926 $1,104 ($1,932)
======= ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 20
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(continued)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------
1999 1998 1997
--------- --------- ---------
(in thousands, except per share data)
<S> <C> <C> <C>
Basic earnings per share
Income before cumulative effect of accounting
change $0.41 $ 0.60 ($1.26)
Cumulative effect of accounting change ($0.02) $ --- $ ---
----- ------ -----
Net Income $0.39 $0.60 ($1.26)
===== ====== =====
Diluted earnings per share
Income before cumulative effect of accounting
change $0.40 $ 0.60 ($1.26)
Cumulative effect of accounting change ($0.02) $ --- $ ---
----- ------ -----
Net Income $0.38 $ 0.60 ($1.26)
===== ====== =====
</TABLE>
4
<PAGE> 21
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------
1999 1998 1997
--------- --------- ---------
(in thousands)
<S> <C> <C> <C>
Net Income (Loss) as Reported $926 $1,104 ($1,932)
Other Comprehensive Income
Change in unrealized (loss) gain on securities
available for sale, net of tax of ($107) in 1999,
$32 in 1998, and $0 in 1997 (207) 51 29
Reclassification of previously reported gain
included in current year net income --- (17) ---
---- ------ ------
Comprehensive Income (Loss) $719 $1,138 ($1,903)
==== ====== ======
The accompanying notes are an integral part of the financial statements.
</TABLE>
5
<PAGE> 22
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Unearned Accumulated Other
Common Paid-in Retained Employee Comprehensive Total
Stock Capital Earnings Benefits Income (Loss) Equity
-------- ---------- -------- -------- ----------------- ------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1997 $ 5,750 $4,770 ($ 780) $ ---- $ ---- $ 9,740
Stock dividend 575 (575) ---- ---- ---- ----
Net loss for 1997 ---- ---- (1,932) ---- ---- (1,932)
Other comprehensive income ---- ---- ---- ---- 29 29
------- ------ ------ ------ ------ -------
Balance January 1, 1998 $ 6,325 $4,195 ($2,712) $ ---- $ 29 $ 7,837
Stock dividend 632 (633) ---- ---- ---- (1)
Public stock offering 4,025 4,427 ---- ---- ---- 8,452
Stock offering costs ---- (677) ---- ---- ---- (677)
Net income for 1998 ---- ---- 1,104 ---- ---- 1,104
Other comprehensive income ---- ---- ---- ---- 34 34
------- ------ ------ ------ ------ -------
Balance December 31, 1998 $10,982 $7,312 ($1,608) $ ---- $ 63 $16,749
Stock dividend 1,098 (1,099) ---- ---- ---- (1)
Stock options exercised 20 13 ---- ---- ---- 33
Net income for 1999 ---- ---- 926 ---- ---- 926
Establish plan ---- ---- ---- (500) ---- (500)
Release of shares ---- ---- ---- 29 ---- 29
Other comprehensive income ---- ---- ---- ------ (207) (207)
------- ------ ------ ------ ------ -------
Balance December 31, 1999 $12,100 $6,226 ($ 682) ($ 471) ($ 144) $17,029
======= ====== ====== ====== ====== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 23
COMMUNITY CENTRAL BANK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1999 1998 1997
------ ------ ------
(in thousands)
<S> <C> <C> <C>
Operating Activities
Net income (loss) $ 926 $ 1,104 ($ 1,932)
Adjustments to reconcile net income to net cash flow from operating
activities:
Net accretion of security discount 4 (10) (25)
Net gain on calls of securities (11) (22) 1
Net gain on sale of mortgage loans ---- (61) (60)
Provision for credit losses 851 530 710
Depreciation expense 315 354 466
Net gain on sales of property and equipment ---- (4) ----
Deferred income tax 12 (774) ----
Cumulative effect of accounting change/organizational costs 57 ---- ----
ESOP compensation expense 29 ---- ----
Increase in accrued interest receivable (188) (156) (482)
Increase in other assets (58) 32 5
Increase in accrued interest payable 162 89 159
Increase in other liabilities 250 250 109
------- ------- -------
Net Cash Provided by (Used in) Operating Activities 2,349 1,332 (1,049)
Investing Activities
Maturities, calls, and prepayments of securities available for sale 3,877 3,337 6
Purchases of securities available for sale (3,983) (7,135) (5,368)
Maturities, calls, and prepayments of investment securities 4,822 5,643 3,892
Purchases of investment securities (165) (282) (18,984)
Sales of residential mortgage loans ---- 9,232 5,999
Net increase in loans (39,162) (58,440) (53,496)
Sales of property and equipment ---- 15 ----
Purchases of property and equipment (469) (290) (584)
------- ------- -------
Net Cash Used in Investing Activities (35,080) (47,920) (68,535)
Financing Activities
Net increase in demand and savings deposits 11,970 15,525 14,595
Net increase in time deposits 23,724 43,272 41,579
Net decrease in short term borrowings (1,886) 2,088 1,403
Repayment of capitalized lease obligation (150) (138) (122)
Public stock offering ---- 7,775 ----
Fractional shares paid on stock dividend (1) (1) ----
Stock options exercised 33 ---- ----
Payment of ESOP debt (29) ---- ----
------- ------- ------
Net Cash Provided by Financing Activities 33,661 68,521 57,455
Increase in Cash and Cash Equivalents 930 21,933 (12,129)
Cash and Cash Equivalents at the Beginning
of the Period 25,462 3,529 15,658
------- ------- -------
Cash and Cash Equivalents at the End of the Period $26,392 $25,462 $ 3,529
======= ======= =======
Supplemental Disclosure of Cash Flow Information
Interest paid $ 6,172 $ 4,811 $ 1,965
Federal Taxes Paid $ 520 $ ---- $ ----
======= ======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 24
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and 1998
(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 Corporation is a bank holding
company, that owns all outstanding capital stock of Community Central Bank in
Mount Clemens, Michigan. The Corporation opened for business in downtown Mount
Clemens in October, 1996. The Bank serves businesses and consumers throughout
Macomb County with a full range of lending and deposit services. In 1999, the
Corporation opened a Loan Center in Port Huron, Michigan, serving small to
medium-sized business accounts in the St. Clair County area.
SECURITIES: On the balance sheet, investment securities (i.e., those which the
Corporation has the ability and positive intent to hold to maturity) are stated
at cost, adjusted for amortization of premium and accretion of discount.
Securities classified as available for sale are those that may be sold in the
future to meet investment objectives of quality, liquidity, and yield, and to
avoid significant market deterioration. Securities available for sale are
reported at estimated fair value. Unrealized gain or loss on securities
available for sale is recorded (net of tax) as a component of other
comprehensive income, in the equity section of the balance sheet. Gain or loss
on sales or calls of securities is computed based on the amortized cost of the
specific security.
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 CREDIT LOSSES: The allowance for credit 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 a 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: Basic earnings per share are based on the weighted average
number of shares outstanding during the period. For earnings per share,
committed-to-be-released and allocated shares of the "ESOP" are considered
outstanding. Diluted earnings per share are adjusted for the dilutive effects of
stock options, where applicable. Outstanding shares are retroactively adjusted
for stock dividends.
8
<PAGE> 25
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Weighted average shares reconciliation is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
-------- -------- --------
(in thousands of shares)
<S> <C> <C> <C>
Basic 2,404 1,834 1,530
Effect of stock options 5 12 ----
-------- -------- -------
Diluted 2,409 1,846 1,530
======== ======== =======
</TABLE>
STOCK OPTIONS: Options granted under the Corporation's plans are accounted for
using the intrinsic value method. Using this method, compensation expense is
recorded at the amount by which the market price of the underlying stock exceeds
the option's exercise price at the grant date. Under the Corporation's plans,
the exercise price of options granted equals the fair value of the stock at the
grant date. Accordingly, no compensation expense is recognized as a result of
stock option awards. The Corporation has adopted the pro forma disclosure-only
provisions of Statement of Financial Accounting Standards (SFAS) 123,
"Accounting for Stock-Based Compensation."
COMPREHENSIVE INCOME: Accounting principles generally require that recognized
revenue, expense, gain, and loss be included in net income. Certain changes in
assets and liabilities, such as unrealized gain or loss on securities available
for sale, are reported as a separate component of equity. Such items, along with
net income, are components of comprehensive income. Accumulated other
comprehensive income at December 31, 1999, 1998 and 1997 consists solely of
unrealized gain and losses on available for sale securities, net of tax.
CHANGE IN ACCOUNTING PRINCIPLE
The American Institute of Certified Public Accountants has issued Statement of
Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities," effective
for fiscal years beginning after December 31, 1998. SOP 98-5 mandates that the
costs of start-up activities and organization costs be expensed as incurred.
Previously, organization costs had been amortized over five years. As a result,
the Corporation charged to expense its remaining unamortized organization costs
in the first quarter of 1999. This resulted in an after tax charge of $57,000.
If SOP 98-5 had not been issued, these costs would have been amortized ratably
through the third quarter of 2001.
RECENT ACCOUNTING PRONOUNCEMENTS: In June 1998 Statement of Financial Account
Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities"
(SFAS 133") was issued. SFAS 133 requires all derivative instruments to be
recorded on the balance sheet at estimated fair value. Changes in the fair value
of derivative instruments are to be recorded each period either in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, on the type of hedge
transaction. SFAS 133 is effective for the year 2000. The Company is currently
evaluating the impact of SFAS 133; at present, the Company does not believe it
will have a material effect on the consolidated financial position or results of
operations.
RECLASSIFICATIONS: Certain reclassifications have been made to the 1998
financial statements to conform with the classifications used in 1999.
(2) CASH AND DUE FROM BANKS
The Bank is required to maintain cash on hand or noninterest bearing deposits
with the Federal Reserve Bank, based on a percentage of the Bank's deposits. The
requirement is met using a combination of vault cash and deposits made using a
pass-through relationship with a correspondent bank. As of December 31, 1999 no
reserves were required.
9
<PAGE> 26
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(3) SECURITIES
The following table shows the amortized cost and estimated fair value of the
Corporation's security portfolios as of dates indicated:
<TABLE>
<CAPTION>
December 31, 1999
--------------------------------------------------------------
Amortized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ---------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Securities Available for Sale
United States Government agencies $ 6,381 $ ---- ($101) $ 6,280
Mortgage backed securities 3,383 ---- (118) 3,265
Collateralized mortgage obligations 1 ---- ---- 1
-------- --------- -------- --------
Total Securities Available for Sale 9,765 ---- (219) 9,546
-------- --------- -------- --------
Investment Securities
United States Government agencies 2,001 ---- (9) 1,992
Mortgage backed securities 1,758 ---- (37) 1,721
Collateralized mortgage obligations 433 ---- (2) 431
Other securities 446 ---- ---- 446
-------- --------- -------- --------
Total Investment Securities 4,638 ---- (48) 4,590
-------- --------- -------- --------
Total Securities $ 14,403 $ ---- ($267) $ 14,136
======== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
------------------------------------------------------------
Amortized Unrealized Fair
Cost Gains Losses Value
------------ ------------ ---------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Securities Available for Sale
United States Government agencies $ 5,402 $ 66 ($2) $ 5,466
Mortgage backed securities 3,171 33 ---- 3,204
Collateralized mortgage obligations 1,098 1 (3) 1,096
------- -------- -------- --------
Total Securities Available for Sale 9,671 100 (5) 9,766
------- -------- -------- --------
Investment Securities
United States Government agencies 4,369 55 ---- 4,424
Mortgage backed securities 2,208 27 ---- 2,235
Collateralized mortgage obligations 2,417 16 (2) 2,431
Other securities 282 ---- ---- 282
------- -------- -------- --------
Total Investment Securities 9,276 98 (2) 9,372
------- -------- -------- --------
Total Securities $18,947 $ 198 ($7) $ 19,138
======= ======== ======== ========
</TABLE>
10
<PAGE> 27
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The amortized cost and estimated fair value of securities, generally by
contractual maturity at December 31, 1999, are as follows:
<TABLE>
<CAPTION>
---------------------- ---------------------------
Securities Available Investment
for Sale Securities
---------------------- ---------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ------- --------- --------
(in thousands)
<S> <C> <C> <C> <C>
Within one year $3,511 $3,479 $2,296 $2,286
After one year but within five years 4,593 4,463 1,896 1,858
After five years but within ten years 766 745 ---- ----
After ten years 895 859 446 446
--------- -------- -------- --------
$9,765 $9,546 $4,638 $4,590
========= ======== ======== ========
</TABLE>
The preceding table shows securities generally by contractual maturity. Actual
maturities may differ from contractual maturities because issuers (or underlying
borrowers) may have the right to call or prepay obligations. Securities which
are not due at a single maturity date, such as mortgage backed securities, have
been allocated to maturity groupings based on average expected life. Average
expected life is based on the best available prepayment estimates as of year
end.
Investment securities of $11,187,000 were pledged to secure short term
borrowings and Federal Reserve Discount window year 2000 contingency planning at
December 31, 1999.
11
<PAGE> 28
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(4) LOANS
Certain Directors and Executive Officers of the Corporation and their associates
are loan customers of the Bank. 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 amounted to $6,183,000 and $986,000
at December 31, 1999 and 1998, respectively. The total unused commitments
related to these loans were $6,332,000 at December 31, 1999. During 1999, new
loans and advances were $7,040,000, while repayments totalled $1,843,000.
The Corporation grants loans to customers who reside primarily in Macomb County.
Although the Corporation has a diversified loan portfolio, a substantial portion
of the local economy has traditionally been dependent upon the automotive
industry. Additionally, the Corporation had approximately $23,187,000 in
outstanding loans at December 31, 1999, to commercial borrowers in the real
estate rental and property management industry.
(5) ALLOWANCE FOR CREDIT LOSSES
A summary of the activity in the allowance for credit losses is as follows:
<TABLE>
<CAPTION>
1999 1998
-------- --------
(in thousands)
<S> <C> <C>
Balance, beginning of the period $1,330 $ 800
Provision 851 530
Charge-offs (272) ----
Recoveries 18 ----
------ ------
Balance, end of year $1,927 $1,330
====== ======
As a percentage of total loans 1.36% 1.30%
====== ======
</TABLE>
12
<PAGE> 29
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The loan portfolio has been reviewed and analyzed for the purpose of estimating
probable credit losses. Management believes that the allowance for credit losses
at December 31, 1999 is adequate to absorb probable credit losses inherent in
the loan portfolio. The Corporation's policy dictates that specifically
identified credit losses be recognized immediately by a charge to the allowance
for credit losses. This determination is made for each loan at the time of
transfer into impaired status after giving consideration to collateral value and
the borrowers' ability to repay the loan principal. Since management immediately
recognizes losses on its impaired loans, it has not become necessary to
separately record a valuation allowance on these assets. Because the ultimate
collection of interest on impaired loans is in doubt, any interest income
recognized on these loans is generally limited to cash collection of interest.
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 $468,000 in loans classified
as impaired during the years ended December 31, 1999 and no loans for the years
ended December 31, 1998 and 1997.
A summary of nonperforming assets is as follows:
<TABLE>
<CAPTION>
1999 1998
-------- --------
(in thousands)
<S> <C> <C>
Impaired loans:
Nonaccrual $ 468 $ ----
------- -------
Total impaired loans 468 ----
Other real estate ---- ----
------- -------
Total nonperforming assets $ 468 $ ----
======= =======
Impaired loans as a percentage of
total loans 0.33% 0.00%
======= =======
</TABLE>
A summary of total loans past due 90-days and still accruing interest is as
follows:
<TABLE>
<CAPTION>
1999 1998
-------- --------
(in thousands)
<S> <C> <C>
Commercial $ --- $ ----
Residential real estate 162 ----
Installment 16 1
-------- --------
Total loans past due 90 days
or more and still accruing interest $ 178 $ 1
======== ========
</TABLE>
13
<PAGE> 30
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(6) PROPERTY AND EQUIPMENT
A summary of property and equipment as of December 31 is as follows:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
(in thousands)
<S> <C> <C>
Buildings (under capitalized lease) $1,000 $1,000
Leasehold improvements 1,034 899
Furniture and equipment 990 705
Vehicles 55 19
---------- ----------
3,079 2,623
Less accumulated depreciation and amortization 1,186 884
---------- ----------
Net property and equipment $1,893 $1,739
========== ==========
</TABLE>
(7) TIME DEPOSITS
The total amount of jumbo certificates of deposit ($100,000 and over) as of
December 31, 1999, was $57,575,000.
As of December 31, 1999, scheduled maturities of all time deposits are as
follows:
<TABLE>
<CAPTION>
Year ending December 31, (in thousands)
<S> <C>
2000 $ 90,350
2001 14,341
2002 222
2003 198
2004 11,026
Subsequent years ----
---------
Total time deposits $116,137
=========
</TABLE>
14
<PAGE> 31
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(8) SHORT TERM BORROWINGS
Short term borrowings at December 31, 1999, consist of securities sold with an
agreement to repurchase. Repurchase agreements generally mature within one day.
Following are details of short term borrowings for the dates or periods
indicated:
<TABLE>
<CAPTION>
1999 1998
----------- ----------
(in thousands)
<S> <C> <C>
Amount outstanding at end of year $1,605 $3,491
Weighted average interest rate on ending balance 4.19% 5.09%
Average amount outstanding during the year 2,357 1,728
Weighted average interest rate during the year 4.29% 4.75%
Maximum amount outstanding at any month end
during the year 3,195 3,491
</TABLE>
(9) LEASES
In 1996, the Corporation entered into a 15 year lease commitment for its office
with an entity owned by two Directors. The lease has been treated as a
capitalized 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, 1999,
consist of the following:
<TABLE>
<CAPTION>
Year ending December 31, (in thousands)
<S> <C>
2000 $ 150
2001 154
2002 173
2003 173
2004 173
Subsequent years 1,307
--------
Total minimum lease payments 2,130
Amount representing interest 1,105
--------
Present value of minimum lease payments $1,025
========
</TABLE>
Operating expense includes rentals on a leased facility and certain equipment in
the amount of $65,000 and $35,000 for 1999, and 1998, respectively. 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, 1999:
<TABLE>
<CAPTION>
Year ending December 31, (in thousands)
<S> <C>
2000 $ 76
2001 60
2002 31
2003 18
2004 2
-------
Total minimum rental payments $187
=======
</TABLE>
15
<PAGE> 32
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(10) ESOP NOTE PAYABLE
In 1999, the ESOP entered into a 10 year note payable with an outside financial
institution as a part of the Corporation's employee stock ownership plan
("ESOP"). The terms of the note include a variable rate note payable, due in
monthly installments to 2009, floating at prime rate which was 8.50% at December
31, 1999. The Corporation has guaranteed the loan, with the ESOP stock pledged
as collateral. In addition, the Bank has issued a letter of credit supporting
the note payable. Since ESOP debt is guaranteed by the Corporation, it is
reflected on the consolidated balance sheet as a liability with a related amount
shown as a reduction in the stockholders' equity.
Scheduled maturities of the ESOP note payable at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
2000 $ 50
2001 50
2002 50
2003 50
2004 50
Subsequent years 221
------
$471
======
</TABLE>
16
<PAGE> 33
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(11) 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 Tier I capital and total capital
(as defined in the regulations) to risk-weighted assets. The Corporation and the
Bank are also subject to a minimum Tier I leverage ratio expressed as a
percentage of quarterly average assets (as defined). The Corporation is further
subject to leverage ratios consisting of primary capital and total capital as a
percentage of assets at period end. Management believes, as of December 31,
1999, that the Corporation and the Bank meet all capital adequacy requirements
to which they are subject. As of December 31, 1999, the most recent notification
from the Federal Deposit Insurance Corporation ("FDIC") 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, as well as certain minimum requirements:
<TABLE>
<CAPTION>
1999 1998 Minimum Ratio Ratio
---------------- ---------------- for Capital to be
Capital Ratio Capital Ratio Adequacy Purposes "Well Capitalized"
------- ----- ------- ----- ---------------- ------------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Tier I capital to risk-weighted assets
Consolidated $17,166 12.30% $16,686 16.89% 4% NA
Bank only 15,786 11.32% 13,300 13.49% 4% 6%
Total capital to risk-weighted assets
Consolidated 18,912 13.55% 17,922 18.15% 8% NA
Bank only 17,532 12.57% 14,534 14.74% 8% 10%
Primary capital to assets
Consolidated 18,749 10.10% 18,016 11.99% 5.5% NA
Total capital to assets
Consolidated 18,749 10.10% 18,016 11.99% 6% NA
Tier I capital to quarterly average assets
Consolidated 17,166 9.46% 16,686 12.15% 4% NA
Bank only 15,786 8.70% 13,300 9.69% 4% 5%
</TABLE>
The Corporation declared a 10% stock dividend on March 23, 1999. The dividend
was paid on April 21, 1999, to stockholders of record on April 6, 1999. As a
result, approximately $1,098,000 was transferred from additional paid-in capital
to common stock. The effects of the stock dividend have been retroactively
applied to applicable figures in this report. The Corporation also declared and
paid a 10% stock dividend in the second quarter of 1998.
17
<PAGE> 34
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(12) 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 $33,000, $32,000 and $19,000 were paid or accrued for the
periods ended December 31, 1999, 1998 and 1997.
EMPLOYEE STOCK OWNERSHIP PLAN - During the second quarter of 1999, the
Corporation established an employee stock ownership plan ("ESOP") for the
benefit of eligible employees. As of December 31, 1999 the plan had acquired a
total of 59,500 shares of the Corporation's stock. This represented both
committed-to-be released shares and unearned shares. Under the plan, the shares
of stock committed-to-be released into the Corporation's participant's accounts
is directly proportional to the ratio of the principal reductions to the total
original principal amount. Under Statement of Position 93-6, "Employer's
Accounting for Employee Stock Ownership Plans", the compensation expense
recognized was based on the fair value of the committed-to-be released shares
which was $29,000 for 1999. This represented 3,471 shares that were
committed-to-be released, with 56,029 shares remaining unearned as of December
31, 1999. The value of unearned shares as of December 31, 1999, was $340,000.
The ESOP borrowed $500,000 from a bank to purchase shares of the Corporation
stock (see Note 10). The ESOP intends to repay the loan (plus interest) using
Company contributions.
Information regarding the ESOP transactions for the year ended December 31, 1999
is as follows:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Amounts paid by ESOP for:
Debt repayment 29
Interest 24
Amounts received from the Company as:
Contributions 60
</TABLE>
STOCK OPTION PLANS - The Corporation has three stock-based compensation plans.
Under the 1996 Employee Stock Option Plan (Employee Plan), the Corporation may
grant options to key employees for up to 53,240 shares of common stock. Under
the 1996 Stock Option Plan for Directors and 1999 Stock Option Plan for
Nonemployee Directors ("Director Plans"), the Corporation may grant options for
up to 53,240 and 60,000 shares of common stock, respectively. Under all plans,
only a portion of options granted are immediately exercisable. The remainder
become exercisable on specified dates in the future. Under all 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 years for employee plans and seven years for
director plans. Options under all plans vest in stages over period of years.
18
<PAGE> 35
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Corporation has estimated fair value of the options issued in 1999, 1998 and
1997 at $4.32, $5.17 and $4.22 per share, respectively, using the Black-Scholes
option pricing model. If the Corporation had used the fair value method of
accounting and recognized compensation costs for the plans based on the fair
value of awards at the grant date, net income (loss) and earnings per share on a
pro forma basis would have been as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
-------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net income (loss) As reported $926 $1,104 ($1,932)
Pro forma $866 $1,068 ($1,974)
======== ======== =======
Basic earnings (loss) per share As reported $0.39 $0.60 ($1.26)
Pro forma $0.36 $0.58 ($1.29)
======== ======== =======
Diluted earnings (loss) per share As reported $0.38 $0.60 ($1.26)
Pro forma $0.36 $0.58 ($1.29)
======== ======== =======
</TABLE>
19
<PAGE> 36
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Following is a summary of the Corporation's three stock option plans for the
periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997
-------------------------- --------------------------- -------------------------
Weighted Weighted Weighted
Number of Average Number of Average Number of Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
--------- -------------- --------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding, beginning of period 77,198 $ 7.90 69,212 $ 7.65 67,881 $ 7.51
Granted 62,000 9.45 7,986 10.04 6,655 9.02
Exercised (3,993) 7.51 ---- ---- ---- ----
Expired (14,817) 9.32 ---- ---- (5,324) 7.57
-------- -------- ------ --------- ------ --------
Outstanding, end of year 120,388 $ 8.54 77,198 $ 7.90 69,212 $ 7.65
======== ======== ====== ========= ====== ========
</TABLE>
The following table shows summary information about stock options outstanding at
December 31, 1999:
<TABLE>
<CAPTION>
Stock Options Outstanding Stock Options Exercisable
- ---------------------------------------------------------------------------- ---------------------------------
Weighted Average Weighted
Range of Number Remaining Weighted Average Number of Average Exercise
Exercise Prices of Shares Contractual Life Exercise Price Shares Price
- ---------------------------------------------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C>
$7.51 55,902 4.1 years $7.51 53,240 $7.51
9.02 6,655 6.4 years 9.02 3,993 9.02
10.23 1,331 5.7 years 10.23 1,331 10.23
9.37 - 9.50 56,500 7.1 years 9.46 3,300 9.37
------- --------- ------ ------ -----
120,388 5.7 years $8.54 61,864 $7.77
======= ========= ====== ====== =====
</TABLE>
20
<PAGE> 37
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(13) OTHER OPERATING EXPENSE
The following is a summary of significant components of other operating expense
for the periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1999 1998 1997
------- ------- -------
(in thousands)
<S> <C> <C> <C>
Advertising and public relations $ 514 $ 329 $ 306
Data processing 312 280 274
Professional and regulatory fees 289 204 154
Credit card processing 191 107 36
Printing and supplies 113 90 81
Telephone 59 59 48
Loan closing 99 55 47
Other insurance 41 45 35
Organizational cost ---- 32 32
Deposit insurance 15 10 3
Single business tax 126 ---- ----
Other 246 103 72
------ ------ ------
Total other operating expense $2,005 $1,314 $1,088
====== ====== ======
</TABLE>
21
<PAGE> 38
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(14) TAXES ON INCOME
The Corporation and the Bank file a consolidated federal income tax return.
Before 1998, no net deferred tax asset had been provided for the future benefit
of the net operating loss carryforward generated since inception, because the
Corporation did not have a history of earnings. 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. During the third and
fourth quarter of 1999, the Corporation paid estimated federal income taxes
having utilized the net operating loss carryforward available to the Corporation
as the result of ongoing earnings. The income tax expense (benefit) for the
years ending December 31, consists of the following:
<TABLE>
<CAPTION>
1999 1998 1997
----- ------ ------
(in thousands)
<S> <C> <C> <C>
Current expense $ 523 $---- $ ----
Deferred (benefit) expense (11) (774) ----
----- ----- ------
Total income expense (benefit) $ 534 ($774) $ ----
===== ===== ======
</TABLE>
The temporary differences and carryforwards which comprise deferred tax assets
and liabilities at December 31, are as follows:
<TABLE>
<CAPTION>
1999 1998
------- -------
(in thousands)
<S> <C> <C>
Deferred tax assets
Net operating loss carryforward $ ---- $217
Provision for loan losses 606 430
Depreciation 186 144
Deferred loan fees 42 42
Unrealized gain on securities available for sale 74 ----
Other 65 31
------ ------
973 864
Valuation allowance for deferred tax assets ---- ----
Deferred tax liabilities
Original issue discount (78) (65)
Unrealized loss on securities available for sale ---- (32)
Mortgage servicing rights (28) ----
Other (30) (25)
------ ------
Net deferred tax asset $837 $742
====== ======
</TABLE>
22
<PAGE> 39
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Corporation's effective tax rates differ from the statutory federal tax
rates. The following is a summary of such differences:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1999 1998 1997
---------- --------- ---------
(in thousands)
<S> <C> <C> <C>
Provision at statutory federal income tax rate 497 112 (657)
Valuation allowance ---- (906) 642
Nondeductible expenditures 37 20 14
Other, net ---- ---- 1
-------- --------- ---------
Provision at effective federal income tax rate 534 (774) ----
======== ========= =========
</TABLE>
23
<PAGE> 40
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(15) 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.
SECURITIES: For marketable debt securities, estimated fair value is based on
quoted market prices or dealer quotes.
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.
SHORT TERM BORROWINGS: The estimated fair value of short term borrowings is the
carrying amount, since they mature the next day.
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 majority of commitments to extend credit and letters
of credit would result in loans with a market rate of interest if funded. The
fair value of these commitments are the fees that would be charged for similar
arrangements with comparable risk and maturity. The recorded book value of
deferred fee income approximates fair value.
The use of different market assumptions and/or estimation methods may have a
material effect on the estimated fair value amounts.
24
<PAGE> 41
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The recorded carrying amounts and estimated fair values of the Corporation's
financial instruments at December 31, are as follows:
<TABLE>
<CAPTION>
1999 1998
---------------------------- ----------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
---------------------------- ----------------------------
(in thousands)
<S> <C> <C> <C> <C>
Financial Assets
Cash and cash equivalents $26,392 $26,392 $25,462 $25,462
Securities 14,184 14,136 19,042 19,138
Loans, net of allowance 139,385 139,182 101,074 102,637
Accrued interest receivable 843 843 655 655
Financial Liabilities
Demand and savings deposits 46,709 46,709 34,739 34,739
Time deposits 116,137 116,168 92,413 92,709
Short term borrowings 1,605 1,605 3,491 3,491
Accrued interest payable 442 442 280 280
</TABLE>
25
<PAGE> 42
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(16) 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 also has legally
binding commitments to extend credit in the form of loans that have been
approved but not yet closed. These funds are normally disbursed during the next
quarter, unless the customer fails to comply with any significant terms of the
loan commitment.
Standby letters of credit are issued in connection with agreements between
customers and a third party. If the customer fails to comply with the agreement,
the counterparty may enforce the standby letter of credit as a remedy. Credit
risk arises from the possibility that the customer may not be able to repay the
Corporation after the letter of credit is enforced.
A summary of commitments not recorded on the balance sheet at December 31 is as
follows:
<TABLE>
<CAPTION>
1999 1998
----- -----
(in thousands)
<S> <C> <C>
Unused home equity lines of credit $ 2,762 $ 2,186
Unused credit card lines 1,475 1,338
Unused portion of construction lines of credit 8,948 3,757
Unused portion of all other credit lines 23,700 13,343
Loans committed but not yet closed 14,715 8,587
Standby letters of credit 957 398
------- -------
Total outstanding commitments $52,557 $29,609
======= =======
</TABLE>
(17) RESTRICTIONS ON DIVIDENDS
Dividends paid by the Corporation would be provided primarily by dividends from
the Bank. However, certain restrictions exist regarding the ability of the Bank
to transfer funds to the Corporation in the form of cash dividends, loans, or
advances. The approval of the FDIC would be required in order for the Bank to
pay dividends in excess of regulatory limits.
26
<PAGE> 43
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(18) 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 income of the Bank as noninterest income, and
undistributed losses as noninterest expense. The Parent-only financial
information should be read in conjunction with the Corporation's consolidated
financial statements.
PARENT-ONLY BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
--------------------------
1999 1998
--------- ---------
Assets (in thousands)
<S> <C> <C>
Cash $1,281 $3,225
Investment in subsidiary 15,642 13,363
Other assets 110 168
--------- ---------
Total Assets $17,033 $16,756
========= =========
Liabilities and Stockholders' Equity
Due to subsidiary $4 $7
--------- ---------
Total Liabilities 4 7
Common stock 12,100 10,982
Additional paid-in capital 6,226 7,312
Accumulated deficit (682) (1,545)
Unearned employee benefit (471) ----
Accumulated other comprehensive income (144) ----
--------- ---------
Total Stockholders' Equity 17,029 16,749
--------- ---------
Total Liabilities and Stockholders' Equity $17,033 $16,756
========= =========
</TABLE>
27
<PAGE> 44
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PARENT-ONLY STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1999 1998 1997
--------- --------- ---------
(in thousands)
<S> <C> <C> <C>
Operating Income
Interest income $60 $57 $28
--------- --------- ---------
Total Operating Income 60 57 28
Operating Expense
Other expense 20 56 67
--------- --------- ---------
Total Operating Expense 20 56 67
Income (Loss) Before Taxes
and Share in Undistributed
Income (Loss) of Subsidiary 40 1 (39)
Income tax expense (benefit) 14 (82) ----
--------- --------- ---------
Income (Loss) Before Share
in Undistributed Income of Subsidiary and
Cumulative Effect of Change in Accounting
Principle 26 83 (39)
Cumulative effect of changes in Accounting Principle (57) ---- ----
Share of undistributed income of subsidiary 957 1,021 (1,893)
--------- --------- ---------
Net Income (Loss) $926 $1,104 ($1,932)
========= ========= =========
</TABLE>
28
<PAGE> 45
COMMUNITY CENTRAL BANK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PARENT-ONLY STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------
1999 1998 1997
--------- --------- ---------
(in thousands)
<S> <C> <C> <C>
Operating Activities
Net income (loss) $926 $1,104 ($1,932)
Adjustments to reconcile net income (loss) to
net cash flow from operating activities
Undistributed (income) loss of subsidiary (957) (1,021) 1,893
Decrease (increase) in other assets 58 (49) 32
(Decrease) increase in other liabilities (3) 7 ----
--------- --------- ---------
Net Cash Provided by (Used in) Operating Activities 24 41 (7)
Investing Activities
Capital contribution to subsidiary (2,000) (5,000) (2,250)
--------- --------- ---------
Net Cash Used in Investing Activities (2,000) (5,000) (2,250)
Financing Activities
Public stock offering ---- 7,775 ----
Fractional shares paid on stock dividend (1) (1) ----
Stock options exercised 33 ---- ----
--------- --------- ---------
Net Cash Provided by Financing Activities 32 7,774 ----
--------- --------- ---------
Increase (Decrease) in Cash (1,944) 2,815 (2,257)
Cash at the Beginning of the Period 3,225 410 2,667
--------- --------- ---------
Cash at the End of the Period $1,281 $3,225 $410
========= ========= =========
</TABLE>
29
<PAGE> 46
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion compares the financial condition of the Corporation and
its wholly owned subsidiary, Community Central Bank, at December 31, 1999 to
December 31, 1998 and the results of operations for the years ended December 31,
1999, 1998 and 1997. This discussion should be read in conjunction with the
financial statements and statistical data presented elsewhere in this report.
This report contains forward-looking statements that are based on management's
beliefs, assumptions, current expectations, estimates and projections about the
financial services industry, the economy, and about the Corporation and the
Bank. Words such as "anticipates," "believes," "estimates," "expects,"
"forecasts," "intends," "is likely," "plans," "projects," variations of such
words and similar expressions are intended to identify such forward-looking
statements. These forward-looking statements are intended to be covered by the
safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions ("Future Factors") that are difficult to
predict with regard to timing, extent, likelihood and degree of occurrence.
Actual results and outcomes may materially differ from what may be expressed or
forecasted in the forward-looking statements. The Corporation undertakes no
obligation to update, amend, or clarify forward looking statements, whether as a
result of new information, future events (whether anticipated or unanticipated),
or otherwise.
Future Factors include changes in interest rate and interest rate relationships;
demand for products and services; the degree of competition by traditional and
non-traditional competitors; changes in banking regulation; changes in tax laws;
changes in prices, levies, and assessments; the impact of technological
advances; governmental and regulatory policy changes; the outcomes of
contingencies; trends in customer behavior as well as their ability to repay
loans; changes in the national and local economy; and other factors, including
risk factors, referred to from time to time in filings made by the Corporation
with the Securities and Exchange Commission. These are representative of the
Future Factors that could cause a difference between an ultimate actual outcome
and a preceding forward-looking statement.
ASSETS
The Corporation's total assets have increased by 23%, or $34.8 million, to
$183.7 million at December 31, 1999, compared with $148.9 million at December
31, 1998.
During the year ended December 31, 1999, total deposits rose by $35.7 million,
while total loans increased by $38.9 million. Loan growth was funded through
deposit growth, coupled with maturing investment proceeds. Commercial loans grew
by $41.5 million, while residential mortgage loans decreased by $3.9 million.
Gross loan charge-offs for 1999 comprised $272,000, with recoveries representing
$18,000. Total net charge-offs represented 0.21 percent of average portfolio
loans. This was the first year the corporation had net charge-offs. Due in part
to these charge-offs, coupled with the seasoning and growth of the loan
portfolio, the Corporation recorded a provision of $851,000 for 1999 compared to
$530,000 in 1998.
Loans are placed in nonaccrual status when, in the opinion of management,
uncertainty exists as to the ultimate collection of principal and interest. At
December 31, 1999, there was $468,000 of loans placed in nonaccrual status.
Commercial loans and lease financing receivables are to be reported as being in
nonaccrual status if: (a) they are maintained on a cash basis because of
deterioration in the financial position of the borrower, (b) payment in full of
interest or principal is not expected, or (c) principal or interest has been in
default for a period of 90 days or more. If it can be documented that the loan
obligation is both well secured and in the process of collection, the loan may
stay on accrual status. However, if the loan is not brought current before 120
days past due, the loan should be reported as nonaccrual. Any exceptions to
automatic nonaccrual status at 90 days must be approved in writing by the Loan
Committee, Credit Administration Officer, and the Chief Financial Officer. A
nonaccrual asset may be restored to an accrual status when none of its principal
or interest is due and unpaid, when it otherwise becomes well secured, and in
the process of collection.
30
<PAGE> 47
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
A debt is "well-secured" if it is secured (1) by collateral in the form of liens
on or pledges of real or personal property, including securities, that have a
realizable value sufficient to discharge the debt (including accrued interest)
in full, or (2) by the guaranty of a financially responsible party. A debt is
"in the process of collection" if collection of a debt is proceeding in due
course either through legal action, including judgment enforcement procedures,
or, in appropriate circumstances, through collection efforts not involving legal
action which are reasonably expected to result in repayment of the debt or in
its restoration to a current status in the near future, generally within the
next 90 days.
In each accounting period, management evaluates the condition of the loan
portfolio to determine the adequacy of the allowance for loan losses.
Consideration is also given to off-balance sheet items that may involve credit
risk, such as commitments to extend credit and financial guarantees.
Management's evaluation of the allowance is further based on 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. The Corporation had included an additional
"year 2000" component in its credit risk rating procedure. The results of these
evaluations are reflected in the allowance and periodic provision for credit
losses. Management believes that the present allowance is adequate, based on the
broad range of considerations listed above.
The primary risk element considered by management regarding 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 concerning 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 annual financial statements from its
commercial loan customers, and periodically reviews existence of collateral and
its value.
Although management believes that the allowance for credit 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 that could be substantial in relation to the
size of the allowance for credit losses. Management is not aware of any factors
that would cause future net loan charge-offs, in total or by loan category, to
significantly differ from those experienced by institutions of similar size.
It must be understood, however, that inherent risks and uncertainties related to
the operation of a financial institution require management to depend on
estimates, appraisals and evaluations of loans to prepare the Corporation's
financial statements. Changes in economic conditions and the financial prospects
of borrowers may result in changes to the estimates, appraisals and evaluations
used. In addition, if circumstances and losses differ substantially from
management's assumptions and estimates, the allowance for loan losses may not be
sufficient to absorb all future losses, and net income could be significantly
impacted.
LIABILITIES
During the year ended December 31, 1999, total deposits increased by 28.1%, or
$35.7 million, to $162.8 million. Short term borrowings decreased by $1.9
million, to $1.6 million at December 31, 1999.
CAPITAL
Shareholders' equity was $17,029,000 at December 31, 1999, a $280,000 increase
from December 31, 1998. The increase primarily resulted from net income for 1999
of $926,000, which was partially offset by unrealized losses on available for
sales securities ($207,000) and the establishment of an employee stock ownership
plan ("ESOP"). The ESOP was funded with an outside loan that has been recorded
as if it was long-term debt of the Corporation, with a corresponding reduction
to equity, which equated to $471,000.
31
<PAGE> 48
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
NET INTEREST INCOME
The Corporation expects net interest income to be its principal source of future
income. During 1999 net interest income was $6.1 million. The Corporation's net
interest margin for the year was 3.88%.
The following table shows the dollar amount of changes in net interest income
for each major category of interest earning asset and interest bearing
liability, and the amount of change attributable to changes in average balances
(volume) or average rates for the periods shown. Variances that are jointly
attributable to BOTH volume and rate changes have been allocated to the volume
component.
<TABLE>
<CAPTION>
Year Ended
December 31, 1999 vs. 1998
-----------------------------------
Increase (Decrease)
Due to Changes In
----------------------
Total Volume Rate
and Both
--------- ---------- ---------
(in thousands)
<S> <C> <C> <C>
Earning Assets - Interest Income
Federal funds sold $535 $547 ($12)
Securities (321) (290) (31)
Loans 3,352 3,521 (169)
--------- --------- -------
Total 3,566 3,778 (212)
--------- --------- -------
Deposits and Borrowed Funds - Interest
Expense
NOW and money market accounts 217 250 (33)
Savings deposits 97 99 (2)
Time deposits 1,076 1,362 (286)
Short term borrowings 19 27 (8)
Capitalized lease obligation and
ESOP loan 24 35 (11)
--------- --------- -------
Total 1,433 1,773 (340)
--------- --------- -------
Net Interest Income $2,133 $2,005 $128
========= ========= =======
</TABLE>
For the year ended December 31, 1999, net interest income increased by 54%, or
$2.1 million over 1998. This was due to a significant rise in the volume of
interest earning assets, especially in loans. On the liability side, interest
bearing liability volumes increased sharply as the Corporation continued to
build a deposit base. The net interest margin improved for the year to 3.88%,
compared with 3.57% for 1998. The margin improvement was the result of an
emphasis in balance sheet mix, whereby increases in relatively higher yielding
variable rate loans were offset by increases in core deposit products. Interest
rates on individual asset and liability categories were generally somewhat lower
than in the previous year.
32
<PAGE> 49
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
AVERAGE BALANCE SHEET
The following table shows the Corporation's consolidated average balances of
assets, liabilities, and equity. The table also details the amount of interest
income or interest expense and the average yield or rate for each category of
interest earning asset or interest bearing liability, and the net interest
margin for the periods indicated. The average balance of securities represents
amortized cost. Interest income on loans includes loan fees.
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
-------------------------------------------------------------------------
Average Average
Interest Rate Interest Rate
Average Income/ Earned/ Average Income/ Earned
Balance Expense Paid Balance Expense Paid
---------------------------------- --------------------------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets
Federal funds sold $20,267 $1,021 5.04% $9,400 $486 5.17%
Securities 16,582 1,012 6.10 21,341 1,333 6.25
Loans 119,773 10,515 8.78 79,670 7,163 8.99
--------- -------- ------- -------- -------- -------
Total Earning Assets/
Total Interest Income 156,622 12,548 8.01% 110,411 8,982 8.14%
-------- ------- -------- -------
Cash and due from banks 4,839 3,216
All other assets 1,779 1,577
--------- --------
Total Assets $163,240 $115,204
========= ========
Liabilities and Equity
NOW and money market accounts $20,435 627 3.07% $12,284 410 3.34%
Savings deposits 5,733 173 3.02 2,445 76 3.11
Time deposits 100,028 5,408 5.41 74,838 4,332 5.79
Short term borrowings 2,357 101 4.29 1,728 82 4.75
Capitalized lease obligation 1,308 163 12.46 1,027 139 13.53
--------- -------- ------- -------- -------- -------
Total Interest Bearing
Liabilities/
Total Interest Expense 129,861 6,472 4.98% 92,322 5,039 5.46%
-------- ------- -------- -------
Noninterest bearing
demand deposits 15,869 11,914
All other liabilities 528 348
Stockholders' equity 16,982 10,620
--------- --------
Total Liabilities and
Stockholders' Equity $163,240 $115,204
========= ========
Net Interest Income $6,076 $3,943
======== ========
Net Interest Margin (Net
Interest Income/Total
Earning Assets) 3.88% 3.57%
======= =======
</TABLE>
33
<PAGE> 50
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
NONINTEREST INCOME
Noninterest income increased by 48%, to $653,000 for 1999. The largest
components of noninterest income were overdraft income and fees from processing
merchant credit card deposits.
NONINTEREST EXPENSE
Noninterest expense increased over 1998 by 23%, to $4.3 million in 1999. This
was primarily the result of growth of the Corporation, and the accompanying rise
in payroll and other operating expense.
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 risk require continuous analysis to match
the maturities of specific categories of loans and investments with specific
types of deposits and borrowings. Bank liquidity depends upon the mix of the
banking institution's potential sources and uses of funds. For the Corporation,
the major sources of liquidity have been deposit growth, federal funds sold,
loans and securities which mature within one year, and sales of residential
mortgage loans. Additional liquidity is provided by a $2.0 million unsecured
federal funds borrowing facility, and a $10.0 million secured line of credit
with the FHLB. The Corporation's large deposits which might fluctuate in
response to interest rate changes are closely monitored. These deposits consist
mainly of jumbo time certificates of deposit.
Managing rates on earning assets and interest bearing liabilities focuses on
maintaining stability in the net interest margin, an important factor in
earnings growth and stability. Emphasis is placed on maintaining a controlled
rate sensitivity position, to avoid wide swings in margins and to manage risk
due to changes in interest rates.
34
<PAGE> 51
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The Corporation's Asset Liability Committee ("ALCO") meets monthly. Some of the
major areas of focus of the ALCO incorporate the following overview functions:
review the interest rate risk sensitivity of the Bank to measure the impact of
changing interest rates on the Bank's net interest income, review the liquidity
position through various measurements, review current and projected economic
conditions and the corresponding impact on the Bank, ensure that capital and
adequacy of the allowance for loan losses are maintained at proper levels to
sustain growth, monitor the investment portfolio recommending policies and
strategies to the Board that incorporate a better balance of our interest rate
risk, liquidity, balance sheet mix and yield management, and review the current
balance sheet mix and proactively determine the future product mix.
The Corporation currently utilizes two quantitative tools to measure and monitor
interest rate risk: static gap analysis and net interest income simulation
modeling. Each of these interest rate risk measurements has limitations, but
management believes when these tools are evaluated together, they provide a
balanced view of the exposure the Corporation has to interest rate risk.
The following table shows the maturity and repricing distribution of the
Corporation's interest earning assets and interest bearing liabilities as of
December 31, 1999, 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
according to its contractual terms.
<TABLE>
<CAPTION>
After Three After One
Within Months But Year But After
Three Within Within Five
Months One Year Five Years Years Total
------- ----------- ---------- ------- -------
(in thousands)
<S> <C> <C> <C> <C> <C>
Interest earning assets
Federal funds sold $20,700 $ ---- $ ---- $ ---- $20,700
Securities, at amortized cost 537 5,271 6,487 2,108 14,403
Loans 65,735 973 55,466 19,138 141,312
-------- --------- ---------- -------- --------
Total 86,972 6,244 61,953 21,246 $176,415
========
Interest bearing liabilities
NOW and money market accounts 21,366 ---- ---- ---- $21,366
Savings deposits 8,803 ---- ---- ---- 8,803
Jumbo time deposits 48,348 6,495 2,732 ---- 57,575
Time deposits < $100,000 39,183 10,044 9,335 ---- 58,562
Short term borrowings 1,605 ---- ---- ---- 1,605
Capitalized lease obligation 474 10 164 848 1,496
-------- --------- ---------- -------- --------
Total 119,779 16,549 12,231 848 $149,407
-------- --------- ---------- -------- ========
Rate sensitivity gap ($32,807) (10,305) 49,722 20,398
Cumulative rate sensitivity gap ($43,112) $6,610 $27,008
Rate sensitivity gap ratio 0.73 0.38 5.07 25.05
Cumulative rate sensitivity gap
ratio 0.68 1.04 1.18
</TABLE>
35
<PAGE> 52
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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 liability
sensitive in the one-year maturity range at December 31, 1999. In a rising rate
environment, the Corporation might not be able to increase prices on interest
earning assets as fast as than the increase in rates on interest bearing
liabilities.
The bank also began to evaluate interest rate risk using a simulation model in
1999. The use of simulation models to assess interest rate risk is an accepted
industry practice, and the results of the analysis are useful in assessing the
vulnerability of the bank's net interest income to changes in interest rates.
However, the assumptions used in the model are oversimplifications and not
necessarily representative of the actual impact of interest rate changes. The
simulation model assesses the direction and magnitude of variations in net
interest income resulting from potential changes in market interest rates. Key
assumptions in the model include prepayment speeds of various loan and
investment assets; cash flows and maturities of interest-sensitive assets and
liabilities, and changes in market conditions impacting loan and deposit volumes
and pricing. These assumptions are inherently uncertain, and subject to
fluctuation and revision in a dynamic environment. Therefore, the model cannot
precisely estimate future net interest income or exactly predict the impact of
higher or lower interest rates. Actual results may differ from simulated results
due to the timing, magnitude, and frequency of interest rate changes, changes in
market conditions, management's pricing decisions, and customer reactions to
those decisions, among other factors.
On a quarterly basis, the net interest income simulation model is used to
quantify the effects of hypothetical changes in interest rates on the
Corporation's net interest income over a projected twelve-month period. The
model permits management to evaluate the effects of shifts in the Treasury Yield
curve, upward and downward, on net interest income expected in a stable interest
rate environment.
As of December 31, 1999, the simulation model projects net interest income would
decrease by 2.18% of the base net interest income, assuming an instantaneous
parallel shift upward in the yield curve by 200 basis points. Conversely, if the
yield curve were to decrease by 200 basis points, the model projects net
interest income would increase by 1.87%.
36
<PAGE> 53
COMMUNITY CENTRAL BANK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
YEAR 2000 READINESS DISCLOSURE
No material events occurred as the result of the "year 2000 problem". The
banking industry is highly dependent on computer systems due to significant
transaction volumes, and date sensitive calculations for interest accruals on
financial statements such as loans and deposits.
The Corporation began to prepare for the year 2000 project in 1997. The plan
began with an internal evaluation of equipment, software applications, and
vendor supplied products. Because the Corporation was founded during 1996, much
of its equipment and computer technology are new; and, in many cases, were 2000
ready from the outset. A total of $55,000 was spent on the year 2000 project.
37
<PAGE> 54
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 Ray T. Colonius; 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 quoted on the OTC
Bulletin Board (OTCBB) under the ticker symbol "CCBD." At December 31, 1999,
there were approximately 300 record holders of the Corporation's common stock.
The following table shows the high and low bid prices by quarter during the past
two years. The quotations reflect bid prices as reported by the OTCBB, and do
not include retail mark-up, mark-down or dealer commission.
<TABLE>
<CAPTION>
1999 Bid Prices
---------------
Cash
Dividends
Quarter High Low Declared
--------------------------------------------------------------
<S> <C> <C> <C>
Fourth $8.50 $5.00 $ ----
Third 8.75 7.50 ----
Second 10.50 8.25 ----
First 10.00 8.63 ----
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1998 Bid Prices
---------------
Cash
Dividends
Quarter High Low Declared
--------------------------------------------------------------
<S> <C> <C> <C>
Fourth $9.77 $9.09 $ ----
Third 10.91 9.09 ----
Second 14.09 10.91 ----
First 12.19 11.57 ----
--------------------------------------------------------------
</TABLE>
Price data has been retroactively adjusted for the 10% stock dividends in 1999,
1998 and 1997.
38
<PAGE> 55
COMMUNITY CENTRAL BANK CORPORATION
STOCKHOLDER INFORMATION
MARKET MAKERS
At December 31, 1999, the following firms were registered with the OTCBB as
market makers in Community Central Bank Corporation common stock:
<TABLE>
<S> <C>
Raymond James & Associates, Inc. Herzog, Heine & Geduld, Inc.
880 Carillon Park 2 Penn Center
St. Petersburg, FL 33716 Philadelphia, PA 19102
McConnell Budd & Downes, Inc. Baird, Patrick & Co., Inc.
365 South Street 20 Exchange Place
Morristown, NJ 07960 New York, NY 10005-3265
Hill, Thompson, Magid & Co., Inc. Monroe Securities, Inc.
15 Exchange Place 47 State Street
Jersey City, NJ 07302-3912 Rochester, NY 14614
STOCK REGISTRAR AND TRANSFER AGENT
State Street Bank & Trust Company
c/o Boston EquiServe
PO Box 8200
Boston, MA 02266-8200
INDEPENDENT AUDITOR
Plante & Moran, LLP
1450 West Long Lake Road, Suite 100
Troy, MI 48098-6330
LEGAL COUNSEL
Dickinson Wright PLLC
500 Woodward Avenue, Suite 4000
Detroit, MI 48226-3425
</TABLE>
INFORMATION
News media representatives and those seeking additional information about the
Corporation should contact Ray T. Colonius, Corporate Treasurer, 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 8:00 A.M., on Tuesday, April 18,
2000, at Fern Hill Country Club, 17600 Clinton River, Clinton Township, MI
48036.
39
<PAGE> 56
[COMMUNITY CENTRAL BANK LOGO]
CCBCM-AR-2000
<PAGE> 57
<TABLE>
<CAPTION>
<S><C>
PLEASE MARK VOTES
/ X / AS IN THIS EXAMPLE
1. Election of Directors. For All With- For All
COMMUNITY CENTRAL BANK Nominees hold Except
CORPORATION (01) JOSEPH CATENACCI
(02) RAYMOND M. CONTESTI / / / / / /
(03) CELESTINA GILES
(04) ANTHONY R. TERSIGNI
(05) DAVID A. WIDLAK
NOTE: If you do not wish your shares voted "For" a
particular nominee, mark the "For All Except" box and strike
a line through the name(s) of the nominee(s). Your shares
will be voted for the remaining nominee(s).
2. Proposal to approve the For Against Abstain
2000. Employee Stock Option / / / / / /
Plan.
RECORD DATE SHARES: 3. In their discretion, the proxies are authorized to vote upon any
other business that may properly come before the meeting, or at any
adjournment(s) thereof.
Please be sure to sign and date this proxy Mark box at right if an address change or comment has
card. been noted on the reverse side of this card. / /
, 2000
________________________________________________________________________________________
Stockholder sign here Co-owner sign here
________________________________________________________________________________________
DETACH CARD DETACH CARD
</TABLE>
COMMUNITY CENTRAL BANK CORPORATION
Dear Stockholder,
Please take note of the important information enclosed with this proxy card. You
are requested to vote on the election of directors and 2000 Employee Stock
Option Plan, as discussed in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on this proxy card to indicate how your shares will be
voted. Then sign and date the card, detach it, and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, April
18, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Harold W. Allmacher
Chairman of the Board and
Chief Executive Officer
<PAGE> 58
COMMUNITY CENTRAL BANK CORPORATION
100 North Main Street
Mount Clemens, MI 48043
ANNUAL MEETING OF STOCKHOLDERS - APRIL 18, 2000
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints Michael D. Schwartz
and Andrew Tassopoulos as Proxies, with full power of substitution in each, to
vote for and on behalf of the undersigned at the 2000 Annual Meeting of
Shareholders of COMMUNITY CENTRAL BANK CORPORATION to be held at Fern Hill
Country Club, 17600 Clinton River, Clinton Township, Michigan 48036, on Tuesday,
April 18, 2000, at 8:00 a.m., and at any adjournment or adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" ALL NOMINEES AND "FOR" THE 2000 EMPLOYEE STOCK OPTION PLAN.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON REVERSE, AND RETURN PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) hereon. Joint owners should
each sign personally. Trustees and other fiduciaries should indicate the
capacity in which they sign. If a corporation or partnership, the signature
should be that of an authorized person who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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