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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission File Number: 333-63769
COMMUNITY SHORES BANK 401(K) PLAN
COMMUNITY SHORES BANK CORPORATION
1030 W. NORTON AVENUE
MUSKEGON, MICHIGAN 49441
(231) 780-1850
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REPORT OF INDEPENDENT AUDITORS
Plan Administrator of
Community Shores Bank 401(k) Plan
Muskegon, Michigan
We have audited the accompanying statement of net assets available for benefits
of the Community Shores Bank 401(k) Plan ("the Plan") as of December 31, 1999
and the related statement of changes in net assets available for benefits for
the year then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999, and the changes in net assets available for benefits for the
year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements as a whole.
Crowe, Chizek and Company LLP
Grand Rapids, Michigan
May 17, 2000
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1.
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COMMUNITY SHORES BANK 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1999
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<TABLE>
<S> <C>
ASSETS
Investments, at fair value
Pooled separate accounts $ 231,732
Receivables
Employer contribution 942
Participant contributions 1,580
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2,522
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NET ASSETS AVAILABLE FOR BENEFITS $ 234,254
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</TABLE>
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See accompanying notes to financial statements.
2.
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COMMUNITY SHORES BANK 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 1999
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<TABLE>
<S> <C>
ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
Investment income
Net investment gain from pooled
separate accounts $ 47,209
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Total investment income 47,209
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Contributions
Employer 46,158
Participants 142,141
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188,299
Total additions 235,508
DEDUCTIONS FROM NET ASSETS ATTRIBUTABLE TO:
Investment management expenses 1,254
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Total deductions 1,254
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NET INCREASE 234,254
Net assets available for benefits
Beginning of year 0
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End of year $ 234,254
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</TABLE>
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See accompanying notes to financial statements.
3.
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COMMUNITY SHORES BANK 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
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NOTE 1 - DESCRIPTION OF PLAN
The following description of the Community Shores Bank 401(k) Plan (the Plan) is
provided for general information purposes only. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
General: The Plan was established by the plan sponsor, Community Shores Bank
(the Bank), effective January 1, 1999. The Bank acts as trustee for the Plan
assets. The Plan is a defined contribution plan which covers all employees who
have completed six months of service and attained the age of 21. The Plan has a
contributory 401(k) portion based on elective contributions from participants in
the Plan. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions: Elective deferrals by participants under the 401(k) provisions
are based on a percentage of their compensation as defined in the Plan agreement
which are subject to certain limitations. Employees also may rollover account
balances from other plans into their account. The Bank may, at the sole
discretion of the Board of Directors, contribute to each participant's account a
matching contribution which is a percentage of the participant's elective
contribution for the year. For 1999, the Bank made matching contributions equal
to 75% of the first 6% of the compensation deferred by each 401(k) participant
subject to certain limitations as specified in the Plan agreement.
Participant Accounts: Each participant's account is credited with the
participant's contributions and allocation of (a) the Bank's contributions and
(b) Plan earnings. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is the
aggregate of the participants' deferrals and rollovers and employer matching
contributions. Investment management service fees are paid by the participant
and netted against investment earnings.
Investment options: Participants may direct, on a quarterly basis, the trustee
to invest their elective 401(k) contributions as well as employer matching
contributions to the Plan in any of the available investment options.
Participants can individually determine their investment options based on
desired level of risk and return for all contributions (employer and employee)
to the Plan.
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4.
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COMMUNITY SHORES BANK 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
Retirement, Death and Disability: A participant is entitled to 100% of his or
her account balance upon retirement, death or disability while employed.
Vesting: Participants are immediately vested in their elective contributions
and employer contributions plus actual earnings thereon.
Payment of Benefits: On termination of service due to death, disability, or
retirement, a participant or his or her beneficiary may elect to receive the
vested portion in the participant's account in a lump-sum amount.
Expenses: Substantially all administrative expenses are paid by the Plan
sponsor. Investment management service fees are paid by the participant.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Valuation and Income Recognition: Investments are stated at fair
value, using quoted market prices. Purchases and sales of securities are
recorded on a trade-date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date.
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make estimates
and assumptions that affect certain reported amounts and disclosures, and actual
results may differ from these estimates. It is at least reasonably possible that
a significant change may occur in the near term for the estimates of investment
valuation.
New Accounting Standard: During 1999, the Plan adopted the requirements of the
American Institute of Certified Public Accountants Statement of Position 99-3,
Accounting and Reporting of Certain Defined Contribution Plan Investments and
Other Disclosure Matters.
NOTE 3 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Bank has the right under
the Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA and its related regulations.
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(Continued)
5.
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COMMUNITY SHORES BANK 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
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NOTE 4 - INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets at year-end.
<TABLE>
<CAPTION>
December 31,
1999
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<S> <C>
Manulife Growth and Income Fund, 552 shares $ 21,180
Manulife Index Stock Fund, 54 shares 40,315
Manulife Growth Opportunities Fund, 649 shares 44,347
Manulife Science and Technology Fund, 1,110 shares 107,477
</TABLE>
NOTE 5 - PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor (DOL) regulations as
any fiduciary of the Plan, any party rendering service to the Plan, the
employer, and certain others. Professional fees for the administration and audit
of the Plan are paid by the Bank.
All Plan investments are shares of pooled separate accounts managed by Manulife
Financial. Manulife Financial is the custodian as defined by the Plan and,
therefore, these transactions qualify as party-in-interest transactions. Fees
paid by the Plan for investment management services amounted to $1,254 for the
year ended December 31, 1999.
NOTE 6 - TAX STATUS
The Internal Revenue Service has determined and informed the Bank by a letter
dated April 14, 1999, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). Management of the
Plan believes the Plan is being operated in accordance with the terms of the
Plan document.
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(Continued)
6.
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COMMUNITY SHORES BANK 401(K) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
December 31, 1999
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Attachment to Form 5500, Schedule H, Part IV, Line 4i
Name of plan sponsor: Community Shores Bank
Employer identification number: 38-3438092
Three-digit plan number: 001
<TABLE>
<CAPTION>
(B)
Identity of Issuer, (C) (E)
Borrower, Lessor, Description of Investment (D) Current
(A) or Similar Party (Share or Par Value) Cost Value
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<S> <C> <C> <C> <C>
* Manulife Money Market Fund 11 shares $ 1,062
* Manulife High-Quality Bond Fund 84 shares 11,312
* Manulife Growth and Income Fund 552 shares 21,180
* Manulife Index Stock Fund 54 shares 40,315
* Manulife Growth Opportunities Fund 649 shares 44,347
* Manulife International Stock Fund 241 shares 6,039
* Manulife Science and Technology Fund 1,110 shares 107,477
</TABLE>
* Denotes party-in-interest
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7.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
COMMUNITY SHORES BANK 401(K) PLAN
Date: June 27, 2000 /s/ Tracey A. Welsh
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Tracey A. Welsh
VP; Controller Community Shores Bank
Plan Trustee
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Exhibit Index
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<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
23 Consent of Independent Public Accountants
</TABLE>
