<PAGE>   1
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                  FORM 10-QSB


/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended June 30, 1999


/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934
    For the transition period from         to         .


                          Commission File No. 333-63769


                        COMMUNITY SHORES BANK CORPORATION
        (Exact name of small business issuer as specified in its charter)


        Michigan                                        38-3423227
(State or other jurisdiction of              (IRS Employer Identification No.)
incorporation or organization)


                 1030 W. NORTON AVENUE, MUSKEGON, MICHIGAN 49441
                    (Address of principal executive offices)


                                 (616) 780-1800
                           (Issuer's telephone number)



Check whether the issuer (1) 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
                             ---            ---


At June 30, 1999, 1,170,000 shares of Common Stock of the issuer were
outstanding



Transitional Small Business Disclosure Format:
                        Yes               No X
                             ---            ---


<PAGE>   2

<TABLE>
<CAPTION>

PART 1.   Financial Information                                                                   Page No.

<S>                                                                                                  <C>
          Item I.  Financial Statements..........................................................     1

          Item 2.  Management's Discussion and Analysis or
                   Plan of Operations............................................................    14


PART II.  Other Information

          Item 1.  Legal Proceedings.............................................................    21

          Item 2.  Changes in Securities and Use of Proceeds.....................................    21

          Item 3.  Defaults upon Senior Securities...............................................    21

          Item 4.  Submission of Matters to a Vote of Security Stockholders......................    21

          Item 5.  Other Information.............................................................    21

          Item 6.  Exhibits and Reports on Form 8-K..............................................    22

          Signatures.............................................................................    23
</TABLE>



<PAGE>   3

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                        COMMUNITY SHORES BANK CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                June 30,              December 31,
                                                                                  1999                    1998
                                                                         ----------------------    ------------------
                                                                              (Unaudited)
<S>                                                                     <C>                       <C>
ASSETS
              Cash and due from banks                                    $            1,594,610    $        8,612,377
              Federal Funds Sold                                                      1,000,000                     0
                                                                         ----------------------    ------------------
                   Total cash and cash equivalents                                    2,594,610           $ 8,612,377

              Securities available for sale                                          10,716,852                     0

              Total loans                                                            31,118,750                     0
              Allowance for loan losses                                                 467,100                     0
                                                                         ----------------------    ------------------
                   Net loans                                                         30,651,650                     0

              Accrued interest receivable                                               242,812                11,400
              Premises and equipment-net                                              1,743,120             1,237,489
              Other assets                                                              167,554                     0
                                                                         ----------------------    ------------------

                   Total assets                                          $           46,116,598    $        9,861,266
                                                                         ======================    ==================

LIABILITIES  AND SHAREHOLDERS' EQUITY
              Deposits
                   Non interest-bearing                                  $            2,495,091    $                -
                   Interest bearing                                                  32,534,408                     0
                                                                         ----------------------    ------------------
                        Total                                                        35,029,499                     0

              Securities sold under agreements to repurchase                          1,647,617                     0

              Accrued expenses and other liabilities                                    151,139                72,214
                                                                         ----------------------    ------------------

                   Total liabilities                                                 36,828,255                72,214

              Shareholders' Equity
                   Preferred Stock, no par value: no shares                                   0                     0
                     authorized and none issued
                   Common Stock, no par value: 9,000,000                             10,871,211            10,227,604
                     shares authorized and 1,170,000 shares
                     outstanding
                   Retained Deficit                                                  (1,557,142)             (438,552)
                   Unrealized loss on securities available for sale                     (25,726)                    0
                                                                         ----------------------    ------------------

                   Total shareholders' equity                                         9,288,343             9,789,052
                                                                         ----------------------    ------------------

                   Total liabilities and shareholders' equity            $           46,116,598    $        9,861,266
                                                                         ----------------------    ------------------

</TABLE>


          See accompanying notes to condensed consolidated financial statements.

                                       1
<PAGE>   4

                        COMMUNITY SHORES BANK CORPORATION
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                     Three months ended        Six months ended
                                                       June 30, 1999            June 30, 1999
                                                   ----------------------   ---------------------
                                                        (Unaudited)              (Unaudited)
<S>                                               <C>                       <C>
Interest Income
              Loans, including fees                $              491,486    $            588,206
              Federal Funds Sold                                   44,379                  87,174
              Securities, taxable                                 106,935                 174,799
              Other                                                   553                  14,477
                                                   ----------------------    --------------------

                   Total interest income                          643,353                 864,656

Interest expense
              Deposits                                            325,581                 395,137
              Secured Borrowings                                   14,301                  17,536
              Federal Funds Purchased                                 263                     263
              Other                                                     0                       0
                                                   ----------------------    --------------------

                   Total interest expense                         340,145                 412,936

NET INTEREST INCOME                                               303,208                 451,720

Provision for loan losses                                         222,700                 467,100
                                                   ----------------------    --------------------

Net interest income after provision for loan losses                80,508                 (15,380)

Noninterest income
              Service charge income                                 9,986                  12,202
              Mortgage referral income                             32,300                  37,087
              Other                                                 7,588                   8,527
                                                   ----------------------    --------------------

                   Total noninterest income                        49,874                  57,816

Noninterest expense
              Salaries and benefits                               357,150                 624,670
              Occupancy                                            45,818                  91,028
              Equipment                                            60,104                 106,934
              Legal and professional                               68,233                 138,930
              Supplies                                              6,929                  57,745
              Other                                               113,267                 141,719
                                                   ----------------------    --------------------

                   Total noninterest expense                      651,501               1,161,026

LOSS BEFORE FEDERAL INCOME TAX                                   (521,119)             (1,118,590)

Federal income tax expense                                              0                       0
                                                   ----------------------    --------------------

NET LOSS                                           $             (521,119)   $         (1,118,590)
                                                   ======================    ====================

Basic loss per share                               $                (0.44)   $              (0.96)
                                                   ======================    ====================
Weighted average shares outstanding                           $ 1,170,000             $ 1,162,265
                                                   ----------------------    --------------------

</TABLE>

         See accompanying notes to condensed consolidated financial statements.



                                        2
<PAGE>   5


                        COMMUNITY SHORES BANK CORPORATION
                        CONDENSED CONSOLIDATED STATEMENT
                         OF COMPREHENSIVE INCOME (LOSS)
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                      Three Months Ended       Six Months Ended
                                                         June 30, 1999          June 30, 1999
                                                     ---------------------   --------------------
<S>                                                <C>                     <C>
Net Loss                                             $            (521,119)  $         (1,118,590)

Other Comprehensive income, net of tax;
     Change in unrealized loss on securites                        (22,618)               (25,726)
                                                     ---------------------   --------------------

Comprehensive loss                                   $            (543,737)  $         (1,144,316)
                                                     ---------------------   --------------------

</TABLE>

See accompanying notes to condensed consolidated financial statements.





                                       3
<PAGE>   6




                        COMMUNITY SHORES BANK CORPORATION
                       CONDENSED CONSOLIDATED STATEMENT OF
                         CHANGES IN SHAREHOLDERS' EQUITY
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                             Net Unrealized
                                                                                 Loss on
                                                                               Securities             Total
                                           Common           Retained          Available for       Shareholders'
                                           Stock            Earnings              Sale               Equity
                                      -----------------  ----------------   ------------------   ----------------
<S>                                  <C>                <C>                <C>                  <C>
Balance at January 1, 1999            $      10,227,604  $       (438,552)  $                -   $      9,789,052

Net proceeds from IPO over-
  allotment, January 21, 1999                   643,607                                                   643,607

Net loss for period from
   January 1, 1999 through
   June 30, 1999                                               (1,118,590)                             (1,118,590)

Unrealized gain sale of
  securities available for sale,
  net of tax                                                                          (25,726)            (25,726)
                                      -----------------  ----------------   -----------------    ----------------

Balance, June 30, 1999                $      10,871,211  $     (1,557,142)  $         (25,726)   $      9,288,343
                                      -----------------  ----------------   -----------------    ----------------
</TABLE>



     See accompanying notes to condensed consolidated financial statements.



                                       4
<PAGE>   7




                        COMMUNITY SHORES BANK CORPORATION
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                     Three Months Ended         Six Months Ended
                                                                        June 30, 1999            June 30, 1999
                                                                    ---------------------   ------------------------
<S>                                                                <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net Loss                                                       $            (521,119)  $             (1,118,590)
     Adjustments to reconcile net loss to net cash
        from operating activities
          Depreciation and amortization                                            70,366                    130,671
          Provision for loan losses                                               222,700                    467,100
          Net change in accrued interest receivable                              (142,372)                  (231,412)
          Net change in other assets                                              (66,706)                  (167,554)
          Net change in accrued expenses and other liabilities                     64,163                     78,925
                                                                    ---------------------   ------------------------

               Net cash from operating activities                                (372,968)                  (840,860)

CASH FLOWS FROM INVESTING ACTIVITIES
     Net change in loans                                                      (14,755,818)               (31,118,750)
     Purchase of securities available for sale                                 (3,009,057)               (10,742,578)
     Purchase of premises and equipment                                          (376,749)                  (636,302)
                                                                    ---------------------   ------------------------

               Net cash from investing activities                             (18,141,624)               (42,497,630)

CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in deposits                                                  14,783,109                 35,029,499
     Net increase in securities sold under agreements to repurchase               616,093                  1,647,617
     Net proceeds from IPO Over-allotment                                               0                    643,607
                                                                    ---------------------   ------------------------

               Net cash from financing activities                              15,399,202                 37,320,723

Net change in cash and cash equivalents                                        (3,115,390)                (6,017,767)

Cash and cash equivalents, beginning balance                                    5,710,000                  8,612,377
                                                                    ---------------------   ------------------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $           2,594,610   $              2,594,610
                                                                    =====================   ========================



Supplemental disclosures of cash flow information
     Cash paid during the period for interest                       $             299,108   $                346,539


</TABLE>


         See accompanying notes to condensed consolidated financial statements.



                                        5
<PAGE>   8


                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.       BASIS OF PRESENTATION:

         The unaudited financial statements for the three and six months ended
         June 30, 1999 include the consolidated results of operations of
         Community Shores Bank Corporation ("Corporation") and its wholly-owned
         subsidiary, Community Shores Bank ("Bank"). These consolidated
         financial statements have been prepared in accordance with the
         instructions for Form 10-QSB and Item 310(b) of Regulation S-B and do
         not include all disclosures required by generally accepted accounting
         principles for a complete presentation of the Corporation's financial
         condition and results of operations. In the opinion of management, the
         information reflects all adjustments (consisting only of normal
         recurring adjustments) which are necessary in order to make the
         financial statements not misleading and for a fair representation of
         the results of operations for such periods. The results for the period
         ended June 30, 1999 should not be considered as indicative of results
         for a full year. For further information, refer to the consolidated
         financial statements and footnotes included in the Corporation's annual
         report on Form 10-KSB for the year ended December 31, 1998.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Securities: Securities are classified as held to maturity and carried
         at amortized cost when management has the positive intent and ability
         to hold them to maturity. Securities are classified as available for
         sale when they might be sold before maturity. Securities available for
         sale are carried at fair value, with unrealized holding gains and
         losses report in other comprehensive income. Trading securities are
         carried at fair value, with changes in unrealized holding gains and
         losses included in income. Other securities such as Federal Home Loan
         Bank stock are carried at cost.

         Interest income includes amortization of purchase premium or discount.
         Gains and losses on sales are based on the amortized cost of the
         security sold. Securities are written down to fair value when a decline
         in fair value is not temporary.

         Loans: Loans are reported at the principal balance outstanding, net of
         unearned interest, deferred loan fees and costs, and an allowance for
         loan losses. Loans held for sale are reported at the lower of cost or
         market, on an aggregate basis.

         Interest income is reported on the interest method and includes
         amortization of net deferred loan fees and costs over the loan term.
         Interest income is not reported when full loan repayment is in doubt,
         typically when the loan is impaired or payments are past due over 90
         days (180 days for residential mortgages). Payments received on such
         loans are reported as principal reductions.




                                       6
<PAGE>   9


                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

         Allowance for Loan Losses: The allowance for loan losses is a valuation
         allowance for probable credit losses, increased by the provision for
         loan losses and decreased by charge-offs less recoveries. Management
         estimates the allowance balance required using past loan loss
         experience, known and inherent risks in the nature and volume of the
         portfolio, information about specific borrower situations and estimated
         collateral values, economic conditions and other factors. Allocations
         of the allowance may be made for specific loans, but the entire
         allowance is available for any loan that, in management's judgement,
         should be charged-off.

         A loan is impaired when full payment under the loan terms is not
         expected. Impairment is evaluated in total for smaller-balance loans of
         similar nature such as residential mortgage, consumer, and credit card
         loans, and on an individual loan basis for other loans. If a loan is
         impaired, a portion of the allowance is allocated so that the loan is
         reported, net, at the present value of estimated future cash flows
         using the loan's existing rate or at the fair value of collateral if
         repayment is expected solely from the collateral.

         Repurchase Agreement: Substantially all repurchase agreement
         liabilities represent amounts advanced by various customers.
         Securities are pledged to cover these liabilities, which are not
         covered by federal deposit insurance.

         Comprehensive Income: Comprehensive income consists of net income and
         other comprehensive income. Other comprehensive income includes
         unrealized gains and losses on securities available for sale which are
         also recognized as separate components of equity. The accounting
         standard that requires reporting comprehensive income first applies for
         1998, with prior information restated to be comparable.

         Industry Segment:  Internal  financial  information is primarily
         reported and aggregated in one line of business, banking.

3.       ALLOWANCE FOR LOAN LOSSES

         The following is a summary of the activity in the allowance for loan
losses account:

<TABLE>
<CAPTION>


                                                    Three months ended      Six months ended
                                                      June 30, 1999          June 30, 1999
                                                   ---------------------  ---------------------
<S>                                               <C>                    <C>
Beginning balance                                  $             244,400  $                   -

Provision for loan losses charged against
  operating expense                                              222,700                467,100
                                                   ---------------------  ---------------------

Ending Balance                                     $             467,100  $             467,100
                                                   =====================  =====================
</TABLE>


                                       7
<PAGE>   10



                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

 4.      LOANS

         Between the opening of Community Shores Bank on January 18, 1999 and
         the end of the second quarter, June 30, 1999, $31.1 million of loans
         were made to customers. The components of the outstanding balances and
         their percentage of the total portfolio is as follows:

<TABLE>
<CAPTION>


                                                    June 30, 1999
                                                Balance           %
                                            ----------------   --------
<S>                                        <C>                <C>
Consumer loans                              $      2,780,552        8.9 %
Commercial, financial and other                   13,629,624       43.8
Commercial real estate and
   construction                                   13,217,618       42.5
Residential real estate, mortgages
   and construction                                1,490,956        4.8
                                            ----------------   --------

Total loans                                 $     31,118,750      100.0 %
                                            ================   ========
</TABLE>






5.       SECURITIES AVAILABLE FOR SALE - NET OF SFAS 115 ADJUSTMENTS

The following table represents the securities held in the Corporation's
portfolio at the end of the second quarter:

<TABLE>
<CAPTION>

                                                    June 30, 1999
                                                Balance           %
                                            ---------------    -------
<S>                                        <C>                 <C>
US Treasury                                     $ 1,754,212       16.4 %
US Government Agency                              6,946,720       64.8
Mortgaged-backed securities,
   guaranteed by GNMA                             2,015,920       18.8
                                            ---------------    -------

Total net securities                           $ 10,716,852      100.0 %
                                            ===============    =======
</TABLE>



                                       8
<PAGE>   11



                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



6.       PREMISES AND EQUIPMENT - NET

         Premises and equipment are comprised of the following:

<TABLE>
<CAPTION>
                                              June 30,         December 31,
                                                1999               1998
                                           ---------------   -----------------
<S>                                       <C>               <C>
Land                                       $       450,440   $         450,440
Leasehold improvements                              80,921                   0
Furniture and equipment                            595,870             477,119
Construction in progress                           725,330             309,930
                                           ---------------   -----------------
                                                 1,852,561           1,237,489
Less accumulated depreciation                     (109,441)                  0
                                           ---------------   -----------------
Total net premises and equipment           $     1,743,120   $       1,237,489
                                           ===============   =================
</TABLE>



         Depreciation expense for the first quarter was $53,312 and the second
         quarter amounted to $56,129.



7.       DEPOSITS

         Community Shores Bank began operations on January 18, 1999. Between
         that date and the end of the second quarter, June 30, 1999, deposit
         accounts totaling $35.0 million were opened. The components of the
         outstanding balances and their percentage of the total portfolio is as
         follows:

<TABLE>
<CAPTION>

                                          June 30, 1999
                                      Balance          %
                                  ----------------   -------
<S>                              <C>                <C>
Noninterest-bearing
     Demand                       $     2,495,091        7.1 %
Interest-bearing
     Checking                           4,459,417       12.7
     Money Market                       2,274,310        6.5
     Savings                              411,304        1.2
     Time, under $100,000              13,252,110       37.8
     Time, over $100,000               12,137,267       34.6
                                  ---------------    -------

Total Deposits                    $    35,029,499      100.0 %
                                  ===============    =======
</TABLE>



                                       9


<PAGE>   12




                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



8.       BORROWINGS

         Information relating to securities sold under agreements to repurchase
follows:


                                                      June 30,
                                                        1999
                                                   ---------------
              Outstanding balance                  $     1,647,617
              Average interest rate                           4.59%

              Average balance                      $       775,256
              Average interest rate                           4.46%

              Maximum outstanding at any month end $     1,647,617


         Securities sold under agreements to repurchase (repurchase agreements)
         generally have original maturities of less than one year. Repurchase
         agreements are treated as financings and the obligations to repurchase
         securities sold are reflected as liabilities. Securities involved with
         the agreements are recorded as assets of the Bank and are primarily
         held in safekeeping by correspondent banks. Repurchase agreements are
         offered principally to certain large deposit customers as deposit
         equivalent investments.


  9.     EMPLOYEE BENEFIT PLANS

         The Corporation established a 401(k) plan effective January 1, 1999,
         covering substantially all its employees. The Corporation's
         year-to-date 1999 matching 401(k) contribution charged to expense was
         $21,795. The total for the second quarter was $11,682. The percent of
         the Corporation's matching contributions to the 401(k) is currently
         4.50% and was approved by the Board of Directors in a meeting on
         January 26, 1999.



                                       10
<PAGE>   13




                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



10.      COMMITMENTS AND OFF-BALANCE-SHEET RISK

         Some financial instruments are used to meet financing needs and to
         reduce exposure to interest rate changes. These financial instruments
         include commitments to extend credit and standby letters of credit.
         These involve, to varying degrees, credit and interest-rate risk in
         excess of the amount reported in the financial statements.

         Commitments to extend credit are agreements to lend to a customer as
         long as there is no violation of any condition established in the
         commitment, and generally have fixed expiration dates. Standby letters
         of credit are conditional commitments to guarantee a customer's
         performance to a third party. Exposure to credit loss if the other
         party does not perform is represented by the contractual amount for
         commitments to extend credit and standby letters of credit. Collateral
         or other security is normally not obtained for these financial
         instruments prior to their use, and many of the commitments are
         expected to expire without being used.

         A summary of the notional and contractual amounts of financing
         instruments with off-balance-sheet risk at June 30, 1999 follows:


                                                            June 30,
                                                              1999
                                                         --------------
              Letters of credit                          $      390,000
              Commercial unused lines of credit              13,756,913
              Consumer unused lines of credit                   777,587
              Residential construction commitments              855,249


         Commitments to make loans generally terminate one year or less from the
         date of commitment and may require a fee. Since many of the above
         commitments expire without being used, the above amounts do not
         necessarily represent future cash commitments. No losses are
         anticipated as a result of these transactions.






                                       11
<PAGE>   14



                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)




11.      REGULATORY MATTERS


         The Corporation and Bank are subject to regulatory capital requirements
         administered by the federal banking agencies. Capital adequacy
         guidelines and prompt corrective action regulations involve
         quantitative measures of assets, liabilities, and certain
         off-balance-sheet items calculated under regulatory accounting
         practices. Capital amounts and classifications are also subject to
         qualitative judgments by regulators about components, risk weightings,
         and other factors, and the regulators can lower classifications in
         certain cases. Failure to meet various capital requirements can
         initiate regulatory action that could have a direct material effect on
         the financial statements.


         The prompt corrective action regulations provide five classifications,
         including well capitalized, adequately capitalized, undercapitalized,
         significantly undercapitalized, and critically undercapitalized,
         although these terms are not used to represent overall financial
         condition. If adequately capitalized, regulator approval is required to
         accept brokered deposits. If undercapitalized, capital distributions
         are limited, as is assets growth and expansion, and plans for capital
         restoration are required.

<TABLE>
<CAPTION>

                                                Capital to risk weighted
                                                         assets
                                              ------------------------------        Tier 1 Capital
                                                 Total            Tier 1           to average assets
                                              -----------      ------------      --------------------
            <S>                              <C>              <C>               <C>
             Well capitalized                          10 %               6 %              5 %
             Adequately capitalized                     8                 4                4
             Undercapitalized                           6                 3                3
</TABLE>






                                       12
<PAGE>   15













                        COMMUNITY SHORES BANK CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

         Actual capital levels and minimum required levels for the Corporation
         and Bank were:


<TABLE>
<CAPTION>
                                       Actual              Adequately Capitalized          Well Capitalized
                             ---------------------------  --------------------------   -------------------------
                                 Amount         Ratio         Amount         Ratio         Amount        Ratio
                             ---------------   ---------  ----------------   -------   ---------------   -------
<S>                         <C>               <C>        <C>                <C>       <C>               <C>
June 30, 1999
--------------------------
Total capital (to risk-
   weighted assets)
      Consolidated           $    9,768,083       26.90 % $     2,904,640      8.00 %  $    3,630,800     10.00 %
      Bank                        8,700,836       23.97         2,903,522      8.00         3,629,402     10.00

Tier 1 capital (to risk-
   weighted assets)
      Consolidated                9,835,188       27.09         1,452,320      4.00         2,178,480      6.00
      Bank                        8,246,995       22.72         1,451,761      4.00         2,177,641      6.00

Tier 1 capital (to
   average assets)
      Consolidated                9,835,188       34.15         1,152,031      4.00         1,440,039      5.00
      Bank                        8,246,995       30.38         1,085,770      4.00         1,357,212      5.00


</TABLE>




         The Corporation and the Bank were in the well categorized category  at
         June 30, 1999.



                                     13
<PAGE>   16






ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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. 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
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. 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 rates 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
outcomes of contingencies; trends in customer behavior as well as their ability
to repay loans; and changes in the national and local economy. These are
representative of the Future Factors that could cause a difference between an
ultimate actual outcome and a preceding forward-looking statement.

Community Shores Bank Corporation was incorporated on July 23, 1998 to establish
and own Community Shores Bank which began operations on January 18, 1999. At
this time, management believes that the Bank is likely to have adequate funds to
meet its capital requirements for the next several years.

Since opening its doors on January 18, the Bank has seen steady growth. In fact,
during the first six months of 1999, the assets of Community Shores Bank
Corporation increased from $9,861,266 on December 31, 1998, to $46,116,598 on
June 30, 1999. This represents the total increase in assets of $36,255,332.


                                       14
<PAGE>   17




                        COMMUNITY SHORES BANK CORPORATION
                                Plan of Operation
                                 (June 30, 1999)


The following table sets forth certain information relating to the Corporation's
consolidated average interest earning assets and interest-bearing liabilities
and reflects the average yield on assets and average cost of liabilities for the
period indicated. Such yields and costs are derived by dividing income or
expenses by the average daily balance of assets or liabilities, respectively,
for the period presented. During the period presented, there were no nonaccrual
loans.

<TABLE>
<CAPTION>


                                                          Six months ended June 30, 1999
                                                       Average                         Average
                                                       balance          Interest        rate
                                                   ----------------   -------------   ----------
<S>                                               <C>                <C>             <C>
Assets
     Federal funds sold and interest-bearing
        deposits with banks                        $     3,745,098    $    101,651         5.43 %
     Investment securities-available for sale            7,018,735         174,799         4.98
     Loans                                              14,368,070         588,206         8.19
                                                   ---------------    ------------    ---------
                                                        25,131,903         864,656         6.88
     Other assets                                        3,668,867
                                                   ---------------

                                                   $    28,800,770
                                                   ===============

Liabilities and Shareholders' Equity
     Interest-bearing deposits                     $    16,128,120    $    395,137         4.90
     Other borrowings                                      785,201          17,799         4.53
                                                   ---------------    ------------    ---------
                                                        16,913,321         412,936         4.88
     Noninterest-bearing deposits                        1,289,928
     Other liabilities                                   1,058,823
     Shareholders' Equity                                9,538,698
                                                   ---------------

                                                   $    28,800,770
                                                   ===============

Net interest income                                                   $    451,720
                                                                      ============

Net interest margin on earning assets                                                      2.00 %
                                                                                      ---------
</TABLE>



                                       15
<PAGE>   18












                           COMMUNITY SHORES BANK CORPORATION
                                Plan of Operation
                                 (June 30, 1999)


The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at June 30, 1999, which are expected to
mature or reprice in each of the time periods shown (in thousands):

<TABLE>
<CAPTION>

                                                                  Interest rate sensitivity period
                                         Within             Three to             One to             After
                                          three              twelve               five               five
                                         months              months              years              years             Total
                                     ---------------    ----------------    ----------------    --------------    --------------
<S>                                 <C>                <C>                 <C>                 <C>               <C>
Earning assets
     Federal funds sold              $     1,000,000    $              -    $              -    $            -    $    1,000,000
     Securities available for sale                 0           7,715,462             496,250         2,505,140        10,716,852
     Loans                                10,480,855             546,957          15,348,484         4,742,454        31,118,750
                                     ---------------    ----------------    ----------------    --------------    --------------
                                          11,480,855           8,262,419          15,844,734         7,247,594        42,835,602

Interest-bearing liabilities
     Savings and checking                  7,145,031                   0                   0                 0         7,145,031
     Time deposits< $100,000               3,173,547           9,646,925             431,638                 0        13,252,110
     Time deposits>$100,000                5,988,549           6,148,718                   0                 0        12,137,267
     Other borrowings                      1,647,617                   0                   0                 0         1,647,617
                                     ---------------    ----------------    ----------------    --------------    --------------
                                          17,954,744          15,795,643             431,638                 0        34,182,025

Net asset (liability) gap            $    (6,473,889)   $     (7,533,224)   $     15,413,096    $    7,247,594   $     8,653,577
                                     ===============    ================    ================    ==============   ===============

Cumulative net asset (liability) gap $    (6,473,889)  $    (14,007,113)   $       1,405,983    $    8,653,577
                                     ---------------   ----------------    -----------------    --------------
</TABLE>


Although there was a $6,017,767 decrease in cash and cash equivalents, the
investment securities increased by $10,742,578. This increase was partially
driven by the growth in the Bank's Repurchase Account deposit product, which is
essentially a combined sweep account and repurchase account collateralized by
securities. Other purchases were prompted by a liquidity need in light of the
Bank's rapid loan growth. All of the investments in the security portfolio were
classified as "available for sale" at June 30, 1999.

As management had expected the majority of the bank's growth has occurred in the
commercial loan area.

See the loan composite table below:

<TABLE>
<CAPTION>
                                                    June 30, 1999
                                                Balance           %
                                            ---------------    -------
<S>                                         <C>                <C>
Consumer loans                              $     2,780,552        8.9 %
Commercial, financial and other                  13,629,624       43.8
Commercial real estate and
   construction                                  13,217,618       42.5
Residential real estate, mortgages
   and construction                               1,490,956        4.8
                                            ---------------    -------

Total loans                                 $    31,118,750      100.0 %
                                            ===============    =======
</TABLE>


                                       16
<PAGE>   19



                        COMMUNITY SHORES BANK CORPORATION
                                Plan of Operation
                                 (June 30, 1999)


Of the $31.1 million loan portfolio at the end of the second quarter, slightly
more than 85% is held in the commercial loan category. This significant
concentration is in line with our strategy of focusing our initial efforts in
the commercial "wholesale" sector of business due in part to the fact that
commercial customers tend to generate demand deposit growth as well as loan
volume.

The "retail" portion of our loan portfolio, consumer and mortgage loans,
comprise approximately 15% of the June 30, 1999 loan portfolio as management
expected. The Bank intends to market for mortgage loans in particular, and
aggressively grow this business segment.

Consumer loan volume should increase at a steady pace and account for a larger
percentage of total assets over time.

Additionally the loan maturities and rate sensitivity of the loan portfolio at
June 30, 1999 have been included below:

<TABLE>
<CAPTION>

                                        Within          Three to         One to          After
                                         three           twelve           five            five
                                        months           months          years           years           Total
                                     --------------   -------------   -------------   -------------   -------------
<S>                                 <C>              <C>             <C>             <C>             <C>
Consumer loans                       $      962,143   $         433   $     874,551   $     943,425   $   2,780,552
Commercial, financial and other           7,704,136         137,764       5,298,850         488,874      13,629,624
Commercial real estate and
   construction                           1,814,576               0       8,563,580       2,839,462      13,217,618
Residential real estate, mortgages
   and construction                               0         408,760         611,503         470,693       1,490,956
                                     --------------   -------------   -------------   -------------   -------------
                                     $   10,480,855   $     546,957   $  15,348,484      $4,742,454   $  31,118,750
                                     ==============   =============   =============   =============   =============

Loans at fixed rates                        527,066         546,957      14,875,472       4,470,454      20,419,949
Loans at variable rates                   9,815,297         883,504               0               0      10,698,801
                                     --------------   -------------   -------------   -------------   -------------
                                        $10,342,363      $1,430,461   $  14,875,472      $4,470,454   $  31,118,750
                                     ==============   =============   =============   =============   =============
</TABLE>


                                     17
<PAGE>   20


                        COMMUNITY SHORES BANK CORPORATION
                                Plan of Operation
                                 (June 30, 1999)


Deposits were $35.0 million at quarter end. See the components below:

<TABLE>
<CAPTION>

                                   June 30, 1999
                                      Balance           %
                                  ---------------    --------
<S>                               <C>                <C>
Noninterest-bearing
     Demand                       $     2,495,091         7.1 %
Interest-bearing
     Checking                           4,459,417        12.7
     Money Market                       2,274,310         6.5
     Savings                              411,304         1.2
     Time, under $100,000              13,252,110        37.8
     Time, over $100,000               12,137,267        34.6
                                  ---------------    --------

Total Deposits                    $    35,029,499       100.0 %
                                  ===============    ========
</TABLE>

Management has chosen to fund a portion of the rapid loan growth by obtaining
brokered and out-of-state deposits. Brokered deposits are time deposits obtained
from depositors located outside our market area and are placed with our Bank by
a deposit broker. At the end of the second quarter, brokered deposits totaled
$3,424,000 (roughly 10% of total deposits).  The approximate total of
non-brokered, out-of-state deposits was $7,125,000 or 20% of total outstanding
deposits at June 30, 1999. These deposit types have decreased 13 percent since
March 31, 1999.

The Bank's reliance on the above deposits is expected to be ongoing. However,
the Bank continues to pursue local business and public deposits in order to
maintain the downward trend in the portfolio concentration levels.

As of June 30, 1999, the Corporation had a retained deficit of $1,557,142. The
retained deficit was primarily the result of preopening fees and expenses as
well as a provision for loan losses of $467,100 made in the first six months of
1999. Management believes that the Corporation will generate a net loss for 1999
as a result of expenditures made to organize and grow the Bank to the size
necessary to generate revenues to exceed the cost of its overhead structure.
Significant ongoing additions to loan loss reserves will also contribute to this
deficit due to the projected increase in the loan portfolio. The expenditures
made will create the infrastructure and lay the foundation for growth in
subsequent years.

Over the next six months, management plans to expend the remaining balance of
the construction cost related to the new main office building which is being
built at 1030 W. Norton Avenue. The remaining cash outlay is expected to be
around $1.1 million. The total project cost including the land, building and
furniture will be approximately $2.1 million. A temporary facility at the same
location is being used pending completion of the permanent facility.
Construction of the Bank's permanent main office was started


                                       18
<PAGE>   21
                           COMMUNITY SHORES BANK CORPORATION
                                Plan of Operation
                                 (June 30, 1999)

on March 8 with good progress occurring because of the good weather.
Completion is expected by November 1 of this year.

The bank has received all the required regulatory approval to open a second
location. As such, the Corporation has secured the lease of a facility at 15190
Newington Drive, Grand Haven, Michigan and is expected to open to the public
around the second week of September, 1999. This location at one time served as a
branch of a local banking competitor.

The Bank presently has the equivalent of 23.5 full-time employees. Management
will continue to review staffing levels to facilitate excellent customer
service.

THE YEAR 2000 ISSUE:
The approach of the year 2000 presents potential problems to businesses that
utilize computers. Some computer systems may not be able to properly interpret
or process dates after December 31, 1999 because they use only two digits to
indicate the year in the date. These computer systems do not properly recognize
a year that begins with "20" instead of the familiar "19". The effects of this
problem may vary from system to system. If not corrected, many computer
applications could fail or create erroneous results.

YEAR 2000 READINESS:
The Corporation has obtained information and account processing services and
reports ("Processing Services") from a reputable and experienced company that
provides such services for many financial institutions. The Corporation is
obtaining written assurances from its Processing Services supplier and computer
equipment suppliers that their products are or will be year 2000 ready or
compliant. The Corporation is assessing year 2000 compliance of the Bank and its
vendors. Vendors whose year 2000 compliance may affect the Corporation's
business and operations include its Processing Services supplier, electronic
banking vendors, correspondent banks, utilities and communications companies.
Security systems, heating ventilating, air conditioning and other systems may
also be affected. The Corporation expects to require assurances from commercial
borrowers as to their year 2000 compliance as part of the loan application and
review process. The Corporation has appointed one of its senior officers to
oversee its year 2000 programs, and the Corporation is apprising its Board of
Directors of the progress being made on a regular basis.

ANTICIPATED YEAR 2000 COSTS:
Costs to the Corporation related to year 2000 matters are estimated to be less
than $25,000. These costs may include testing of equipment and software
programs, equipment upgrades and customer education. It is difficult to predict
such costs, and additional funds may be needed for expenses relating to year
2000 testing, training, education, system or software failure replacements, or
losses due to vendor or customer failure to be year 2000 compliant.


                                       19



<PAGE>   22




                        COMMUNITY SHORES BANK CORPORATION
                                Plan of Operation
                                 (June 30, 1999)

WORST CASE SCENARIO AND CONTINGENCY PLAN UPDATE:
The failure of the Corporation, its vendors, or customers to successfully
address year 2000 issues could interfere with the Corporation's ability to
operate its business and have a material adverse effect on the Corporation's
financial condition and results of operation. The Corporation is in the process
of developing a contingency plan to address year 2000 problems that may occur
after December 31, 1999, and expects to complete development and test the plan
by the end of the third quarter of 1999.







                                       20
<PAGE>   23



PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


From time to time, the Corporation and the Bank may be involved in various legal
proceedings that are incidental to their business. In the opinion of management,
neither the Corporation nor the Bank is a party to any current legal proceedings
that are material to the financial condition of the Corporation or the Bank,
either individually or in the aggregate.



ITEM 2.  CHANGES IN SECURITIES

Not applicable.



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.



ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

At its Annual Meeting held on April 15, 1999, the Corporation's stockholders
voted to elect four directors, Gary F. Bogner, Robert L. Chandonnet, Jose' A.
Infante and Joy R. Nelson, each for a three year term expiring at the Annual
Meeting of the stockholders of the Corporation in 2002. The results of the
election were as follows:


<TABLE>
<CAPTION>


                                    Votes               Votes                       Votes               Broker--No
Nominee                              For                Withheld                    Abstained               Votes
<S>                             <C>                  <C>                          <C>                  <C>
Gary F. Bogner                   1,067,635               1,000                       -----                -----
Robert L. Chandonnet             1,068,635             -------                       -----                -----
Jose' A. Infante                 1,068,635             -------                       -----                -----
Joy R. Nelson                    1,068,635             -------                       -----                -----

</TABLE>

The terms for the following directors (who were not up for election) continued
after the Annual Meeting: David C. Bliss, John C. Carlyle, Dennis L. Cherette,
Bruce J. Essex, Michael D. Gluhanich, Donald E. Hegedus and John L. Hilt.


ITEM 5.  OTHER INFORMATION

Not applicable.



                                       21
<PAGE>   24



ITEM 6.  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.333-63769) that became effective on December
                            17, 1998

           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. 333-63769) that became effective on December 17,
                            1998

           11               Statement re Computation of Per Share Earnings

           27               Financial Data Schedule



(b) Reports on Form 8-K.

         No reports were filed by the Corporation on Form 8-K during the quarter
         for which this report is filed.






                                       22
<PAGE>   25




                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on August 13, 1999.


                                 COMMUNITY SHORES BANK CORPORATION



                                 By: /s/ Jose' A. Infante
                                     ------------------------------------------
                                 Jose' A. Infante
                                 Chairman of the Board, President and Chief
                                 Executive Officer (principal executive officer)





                                 By: /s/ Tracey A. Welsh
                                     -------------------------------------------
                                 Tracey A. Welsh
                                 (principal financial and accounting officer)
















                                       23


<PAGE>   26
                                 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. 333-63769) that became effective on
                              December 17, 1998

    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. 333-63769) that became effective on
                              December 17, 1998

    11                        Statement re Computation of Per Share Earnings

    27                        Financial Data Schedule