UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009
 Commission File No. 000-33373
 COMMUNITY CENTRAL BANK CORPORATION
 
 Michigan
    
    38-3291744(State or other jurisdiction of incorporation 
or organization)
    
    (IRS Employer Identification No.)
 
 
  þ o
 o o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ o þ
  Class
    
    Outstanding at November 13, 2009Common Stock
    
    3,737,181 Shares




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##### 



PART I
 Item 1. Financial Statements
 Consolidated Balance Sheet
 September 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)(In thousands)AssetsCash and due from banks
    
    $
    30,622
    
    
    $
    9,162Federal funds sold
    
    
    773
    
    
    
    7,000Cash and Cash Equivalents
    
    
    31,395
    
    
    
    16,162Trading securities at fair value option
    
    
    
    
    
    
    17,463Securities available for sale, at fair value
    
    
    64,939
    
    
    
    76,552Securities held to maturity, at amortized cost
    
    
    3,480
    
    
    
    1,515FHLB stock
    
    
    5,877
    
    
    
    5,877Residential mortgage loans held for sale
    
    
    2,625
    
    
    
    3,302LoansCommercial real estate
    
    
    279,369
    
    
    
    284,811Commercial and industrial
    
    
    53,134
    
    
    
    38,714Residential real estate
    
    
    49,710
    
    
    
    54,409Home equity lines of credit
    
    
    22,723
    
    
    
    21,230Consumer loans
    
    
    7,169
    
    
    
    7,107Credit card loans
    
    
    829
    
    
    
    846Total Loans
    
    
    412,934
    
    
    
    407,117Allowance for credit losses
    
    
    (12,195
    )
    
    
    (7,315
    )Net Loans
    
    
    400,739
    
    
    
    399,802Net property and equipment
    
    
    9,129
    
    
    
    9,361Accrued interest receivable
    
    
    2,190
    
    
    
    2,479Other real estate
    
    
    6,528
    
    
    
    2,913Goodwill
    
    
    638
    
    
    
    638Intangible assets, net of amortization
    
    
    63
    
    
    
    80Cash surrender value of Bank Owned Life Insurance
    
    
    11,201
    
    
    
    10,975Other assets
    
    
    7,977
    
    
    
    9,831Total Assets
    
    $
    546,781
    
    
    $
    556,950
 (continued)
 2




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##### 



Consolidated Balance Sheet
 September 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)(In thousands)LiabilitiesDepositsNoninterest bearing demand deposits
    
    $
    59,262
    
    
    $
    34,169NOW and money market accounts
    
    
    37,190
    
    
    
    38,154Savings deposits
    
    
    8,962
    
    
    
    8,585Time deposits
    
    
    265,215
    
    
    
    276,468Total Deposits
    
    
    370,629
    
    
    
    357,376Repurchase agreements
    
    
    44,771
    
    
    
    39,394Federal Home Loan Bank advances ($5.0 million at
fair value option at 12-31-2008)
    
    
    87,700
    
    
    
    108,200Accrued interest payable
    
    
    748
    
    
    
    1,050Other liabilities
    
    
    2,616
    
    
    
    3,779Subordinated debentures at fair value option
    
    
    9,842
    
    
    
    12,757Total Liabilities
    
    
    516,306
    
    
    
    522,556Stockholders EquityPreferred stock (1,000,000 shares authorized, no par value, in total. Series
A- liquidation preference $1,000 per share, 7,000 authorized, with
3,550 and 3,050 issued and outstanding as of 9-30-09 and 12-31-08.
    
    
    3,550
    
    
    
    3,050Common stock (No par value; 9,000,000 shares,
authorized, and 3,737,181 and 3,734,781 issued and
outstanding at September 30, 2009 and December 31, 2008,
respectively)
    
    
    32,192
    
    
    
    32,125Accumulated deficit
    
    
    (5,489
    )
    
    
    (516
    )Accumulated other comprehensive (loss) income
    
    
    222
    
    
    
    (265
    )Total Stockholders Equity
    
    
    30,475
    
    
    
    34,394Total Liabilities and Stockholders Equity
    
    $
    546,781
    
    
    $
    556,950
 3




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##### 



Consolidated Statements of Income
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except per share data)Interest IncomeLoans (including fees)
    
    $
    6,510
    
    
    $
    6,378
    
    
    $
    19,423
    
    
    $
    19,242Taxable securities
    
    
    645
    
    
    
    954
    
    
    
    2,304
    
    
    
    2,722Tax exempt securities
    
    
    74
    
    
    
    141
    
    
    
    272
    
    
    
    517Federal funds sold
    
    
    9
    
    
    
    64
    
    
    
    22
    
    
    
    373Total interest income
    
    
    7,238
    
    
    
    7,537
    
    
    
    22,021
    
    
    
    22,854Interest ExpenseNOW and money market accounts
    
    
    55
    
    
    
    175
    
    
    
    205
    
    
    
    637Savings deposits
    
    
    13
    
    
    
    73
    
    
    
    44
    
    
    
    187Time deposits
    
    
    2,297
    
    
    
    2,639
    
    
    
    7,472
    
    
    
    8,409Repurchase agreements and fed funds purchased
    
    
    327
    
    
    
    304
    
    
    
    959
    
    
    
    823Federal Home Loan Bank advances
    
    
    1,015
    
    
    
    1,218
    
    
    
    3,286
    
    
    
    3,692ESOP loan interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Subordinated debentures
    
    
    311
    
    
    
    195
    
    
    
    924
    
    
    
    702Total interest expense
    
    
    4,018
    
    
    
    4,604
    
    
    
    12,890
    
    
    
    14,451Net Interest Income
    
    
    3,220
    
    
    
    2,933
    
    
    
    9,131
    
    
    
    8,403Provision for Credit Losses
    
    
    4,400
    
    
    
    1,084
    
    
    
    9,650
    
    
    
    4,068Net Interest Income (Expense) after Provision for
Credit Losses
    
    
    (1,180
    )
    
    
    1,849
    
    
    
    (519
    )
    
    
    4,335Noninterest IncomeFiduciary income
    
    
    80
    
    
    
    82
    
    
    
    245
    
    
    
    288Deposit service charges
    
    
    110
    
    
    
    109
    
    
    
    300
    
    
    
    383Net realized security gain
    
    
    80
    
    
    
    84
    
    
    
    436
    
    
    
    195Change in fair value of assets/liabilities carried
at
fair value under SFAS 159
    
    
    1,313
    
    
    
    1,109
    
    
    
    2,383
    
    
    
    4,120Mortgage banking income
    
    
    623
    
    
    
    461
    
    
    
    2,384
    
    
    
    1,341Other income
    
    
    251
    
    
    
    250
    
    
    
    715
    
    
    
    1,127Total noninterest income
    
    
    2,457
    
    
    
    2,095
    
    
    
    6,463
    
    
    
    7,454Noninterest ExpenseSalaries, benefits and payroll taxes
    
    
    2,050
    
    
    
    1,884
    
    
    
    6,231
    
    
    
    5,551Net occupancy expense
    
    
    424
    
    
    
    444
    
    
    
    1,304
    
    
    
    1,357Other operating expense
    
    
    2,439
    
    
    
    1,549
    
    
    
    5,708
    
    
    
    4,284Total noninterest expense
    
    
    4,913
    
    
    
    3,877
    
    
    
    13,243
    
    
    
    11,192Income (loss) Before Taxes
    
    
    (3,636
    )
    
    
    67
    
    
    
    (7,299
    )
    
    
    597Income Tax (Benefit)
    
    
    (1,271
    )
    
    
    (37
    )
    
    
    (2,588
    )
    
    
    (22
    )Net income (loss)
    
    $
    (2,365
    )
    
    $
    104
    
    
    $
    (4,711
    )
    
    $
    619Dividends declared on preferred shares
    
    
    107
    
    
    
    
    
    
    
    263
    
    
    
    Net income (loss) available on common shares
    
    $
    (2,472
    )
    
    $
    104
    
    
    $
    (4,974
    )
    
    $
    619Per share data:Basic earnings (loss)
    
    $
    (0.66
    )
    
    $
    0.03
    
    
    $
    (1.33
    )
    
    $
    0.17Diluted earnings (loss)
    
    $
    (0.66
    )
    
    $
    0.03
    
    
    $
    (1.33
    )
    
    $
    0.17Cash dividends
    
    $
    
    
    
    $
    0.02
    
    
    $
    
    
    
    $
    0.10
 4




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##### 



Consolidated Statements of Comprehensive Income
 Three Months     Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Net Income (Loss) as Reported
    
    
    ($2,365
    )
    
    $
    104
    
    
    
    ($4,711
    )
    
    $
    619Other Comprehensive Income (Loss), Net of TaxChange in unrealized net gain (loss) on securities
available for sale
    
    
    428
    
    
    
    200
    
    
    
    487
    
    
    
    (120
    )Comprehensive Income (loss)
    
    
    ($1,937
    )
    
    $
    304
    
    
    
    ($4,224
    )
    
    $
    499
 5




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##### 



Consolidated Statements of Cash Flow
 Nine Months Ended September 30,2009
    
    
    2008(In thousands)Operating ActivitiesNet income (loss)
    
    
    ($4,711
    )
    
    $
    619Adjustments to reconcile net income to net cash flow from operating activities:Net amortization of security premium
    
    
    320
    
    
    
    60Net gain on available for sale securities
    
    
    (436
    )
    
    
    (195
    )Net gain on instruments at fair value
    
    
    (2,383
    )
    
    
    (4,120
    )Provision for credit losses
    
    
    9,650
    
    
    
    4,068Depreciation expense
    
    
    483
    
    
    
    504Deferred income tax (benefit) expense
    
    
    (1,676
    )
    
    
    306ESOP compensation expense
    
    
    
    
    
    
    42SFAS 123R option expense
    
    
    67
    
    
    
    33Decrease in accrued interest receivable
    
    
    289
    
    
    
    142Decrease in other assets
    
    
    1,896
    
    
    
    4,044(Decrease) increase in accrued interest payable
    
    
    (302
    )
    
    
    103Increase (decrease) in other liabilities
    
    
    (1,163
    )
    
    
    328Decrease in loans sold / held for sale
    
    
    677
    
    
    
    3,486Increase in other real estate
    
    
    (3,615
    )
    
    
    (1,307
    )Net Cash (Used in) Provided By Operating Activities
    
    
    (904
    )
    
    
    8,113Investing ActivitiesSales, maturities, calls and prepayments of securities available
for sale
    
    
    89,201
    
    
    
    61,721Purchases of securities available for sale
    
    
    (79,824
    )
    
    
    (65,538
    )Maturities, calls, sales and prepayments of trading securities
    
    
    24,700
    
    
    
    2,646Transfer and purchase of trading securities
    
    
    (7,237
    )
    
    
    Maturities, calls, and prepayments of held to maturity securities
    
    
    143
    
    
    
    119Purchases of held to maturity securities
    
    
    (2,088
    )
    
    
    (1,265
    )Increase in loans
    
    
    (7,693
    )
    
    
    (10,943
    )Purchases of property and equipment
    
    
    (55
    )
    
    
    (1,045
    )Net Cash (Ussed in) Provided by Investing Activities
    
    
    17,147
    
    
    
    (14,305
    )Financing ActivitiesNet increase in demand and savings deposits
    
    
    24,506
    
    
    
    18,770Net decrease in time deposits
    
    
    (11,253
    )
    
    
    13,602Net increase in short term borrowings
    
    
    5,377
    
    
    
    2,506FHLB advances
    
    
    
    
    
    
    13,000Repayment of FHLB advances
    
    
    (20,500
    )
    
    
    (12,000
    )Payment of ESOP debt
    
    
    
    
    
    
    (33
    )Stock options exercised / awarded
    
    
    
    
    
    
    17Preferred Stock Issuance
    
    
    500
    
    
    
    Preferred Stock dividend paid
    
    
    (263
    )
    
    
    Cash dividends paid
    
    
    
    
    
    
    (358
    )Repurchase of stock
    
    
    623
    
    
    
    (7
    )Net Cash (Used in) Provided by Financing Activities
    
    
    (1,010
    )
    
    
    35,497Increase in Cash and Cash Equivalents
    
    
    15,233
    
    
    
    29,305Cash and Cash Equivalents at the Beginning of the Period
    
    
    16,162
    
    
    
    9,183Cash and Cash Equivalents at the End of the Period
    
    $
    31,395
    
    
    $
    38,488Supplemental Disclosure of Cash Flow InformationInterest paid
    
    $
    13,192
    
    
    $
    14,451Loans transferred to other real estate owned
    
    $
    5,746
    
    
    $
    3,854
 6




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##### 



Community Central Bank Corporation
 Notes to Consolidated Financial Statements
(unaudited)
 1.
    
    The financial statements of Community Central Bank Corporation (the Corporation) include
the consolidation of its wholly-owned subsidiaries: Community Central Bank (the Bank) and
Community Central Mortgage Company, LLC (the Mortgage Company).
 The Corporations Consolidated Balance Sheets are presented as of September 30, 2009 and
December 31, 2008, and Consolidated Statements of Income and Comprehensive Income for the three
and nine month periods ended September 30, 2009 and 2008, and Consolidated Statements of Cash
Flow for the nine months ended September 30, 2009 and 2008. These unaudited financial
statements are for interim periods and do not include all disclosures normally provided with
annual financial statements. The interim statements should be read in conjunction with the
financial statements and footnotes contained in the Corporations Annual Report on Form 10-K for
the fiscal year ended December 31, 2008.
 In the opinion of management, the interim statements referred to above contain all adjustments
(consisting of normal, recurring items) necessary for a fair presentation of the financial
statements. The results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year.
 New Accounting Pronouncements:
 In April 2009, the FASB issued a new standard now codified in ASC 820, Fair Value Measurements
and Disclosures(formerly Staff Position (FSP) No. 157-4, Determining Fair Value When the Volume
and Level of Activity for the Asset and Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly). This standard emphasizes that even if there has been a
significant decrease in the volume and level of activity, the objective of a fair value
measurement remains the same. Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or
distressed sale) between market participants. The standard provides a number of factors to
consider when evaluating whether there has been a significant decrease in the volume and level
of activity for an asset or liability in relation to normal market activity. In addition, when
transactions or quoted prices are not considered orderly, adjustments to those prices based on
the weight of available information may be needed to determine the appropriate fair value. The
standard also requires increased disclosures. This standard is effective for interim and annual
reporting periods ending after June 15, 2009, and shall be applied prospectively. Early
adoption is permitted for periods ending after March 15, 2009. Adoption of this standard in
June of 2009 did not have a material effect on the Companys results of operations or financial
position.
 In April 2009, the FASB issued a new standard now codified in ASC 825, Financial Instruments
(formerly Staff Position (FSP) No. 107-1 and APB 28-1, Interim Disclosures about Fair Value of
Financial Instruments). This statement amends FASB Statement No. 107, Disclosures about Fair
Value of Financial Instruments, to require disclosures about fair value of financial instruments
for interim reporting periods of publicly traded companies that were previously only required in
annual financial statements. This statement is effective for interim reporting periods ending
after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.
Adoption of this statement at June 30, 2009 did not have an impact on the results of operations
or financial position as it only required disclosures included in the footnotes.
 In May 2009, the FASB issued a new standard now codified in ASC 855, Subsequent Events(formerly
SFAS No. 165, Subsequent Events), which establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before financial statements are
issued or are available to be issued. Although there is new terminology, the standard is based
on the same principles as those that currently exist in the auditing standards. The standard
also includes a required disclosure of the date through which the entity has evaluated
subsequent events and whether the evaluation date is the date of issuance or the date the
financial statements were available to be issued. The standard is effective for interim or
annual periods ending after June 15, 2009. The Company has complied with the disclosure
requirements. In accordance with this statement, we have evaluated subsequent events through
the date of this filing. We do not believe there are any material subsequent events which would
require further disclosure.
 7




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##### 



In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No.
162. The FASB Accounting Standards Codification(Codification) will become the source of
authoritative U.S. Generally Accepted Accounting Principles (GAAP) recognized by the FASB to be
applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority
of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the
effective date of this Statement, the Codification will supersede all then-existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC accounting literature
not included in the Codification will become non-authoritative. This Statement is effective for
financial statements issued for interim and annual periods ending after September 15, 2009. The
Company will comply with the requirements of the Statement beginning in the third quarter of
2009.
 In August 2009, the FASB issued Accounting Standards Update (ASU) No. 2009-05 (ASU 2009-05), which provides amendments
to ASC Top 820, Fair Value Measurements and Disclosures, for the fair value measurement of liabilities. ASU 2009-05 provides
clarification that in circumstances in which a quoted price in an active market for the identical liability is not available,
a reporting entity is required to measure fair value using one or more of the following techniques: a valuation technique that
uses the quoted price of the identical liability when traded as an asset or a quoted price for a similar liability when traded
as an asset, or another valuation method that is consistent with the principles of ASC Topic 820, Fair Value Measurements and Disclosures.
ASU 2009-05 also provides clarification that when estimating the fair value of a liability, a reporting entity is not required to include a
separate input or adjustments to other inputs relating to the existence of a restriction that prevents the transfer of the liability.
The effective date is the first reporting period beginning after issuance. Accordingly, the Corporation will adopt the provisions of
ASU 2009-05 in the fourth quarter of 2009. The Corporation does not expect the adoption of the provisions of ASU 2009-05 to have a material
effect on the Corporations financial condition and results of operations.
 2.
    
    Critical Accounting Policies
 The accounting and reporting policies of the Corporation conform to accounting principles
generally accepted in the United States of America and general practices within the banking
industry. The following describes the critical accounting policies employed in the preparation
of financial statements.
 Allowance for Loan Losses: The allowance for loan losses is maintained at a level considered by
management to be adequate to absorb losses inherent in existing loans and loan commitments. The
adequacy of the allowance is based on evaluations that take into consideration such factors as
prior loss experience, changes in the nature and volume of the portfolio, overall portfolio
quality, loan concentrations, specific impaired or problem loans and commitments, current
economic conditions that may affect the borrowers ability to pay and other subjective factors.
The determination of the allowance is also based on regulatory guidance. This guidance
includes, but is not limited to, generally accepted accounting principles and guidance issued
from other regulatory bodies, such as the joint policy statement issued by the Federal Financial
Institutions Examination Council.
 3.
    
    On February 13, 2007, Community Central Bank Corporation issued $18.0 million aggregate
liquidation amount of cumulative trust preferred securities through Community Central Capital
Trust II, a statutory trust formed by the Corporation for the purpose of issuing the
securities (the Trust II Securities). The Trust II securities bear a fixed distribution
rate of 6.71% per annum through March 6, 2017, and thereafter will bear a floating
distribution rate equal to 90-day LIBOR plus 1.65%. The Trust II Securities are redeemable at
the Corporations option, in whole or in part, at par beginning March 6, 2017, and if not
sooner redeemed mature on March 6, 2037. The Trust II Securities were sold in a private
transaction exempt from registration under the Securities Act of 1933, as amended.
 4.
    
    In December 2004, the Financial Accounting Standards Board (FASB) issued Statement No.
123R, Share-Based Payment(SFAS 123R), a revision to Statement No. 123, Accounting for
Stock-Based Compensation, codified in ASC 718 Stock Compensation. This standard requires the
Corporation to measure the cost of employee services received in exchange for equity awards,
including stock options, based on the grant date fair calculated value of the awards. The
Corporation adopted the provisions of SFAS 123R as of January 1, 2006. The standard provides
for a modified prospective application. Under this method, the Corporation began recognizing
compensation cost for equity based compensation for all new or modified grants after the date
of adoption. In addition, the Corporation is recognizing the unvested portion of the grant
date fair value of awards issued prior to adoption based on the fair value previously
calculated for disclosure purposes. Prior periods have not been restated.
 8




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##### 



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008(In thousands)
    
    (In thousands)Stock-based employee compensation expense,
net of related tax effects, included in reported
net income
    
    $
    27
    
    
    $
    14
    
    
    $
    67
    
    
    $
    42
 5.
    
    Fair Value
 The Fair Value Option for Financial Assets and Financial Liabilities Financial Instruments Fair Value Measurements Determining Fair Value When the Volume and Level of Activity for the Asset and Liability
Have Significantly Decreased and Identifying Transactions That Are Not Orderly Fair Value Measurements and Disclosures.
  Fair Value Hierarchy
 Fair Value Measurements,
 Level 1
    
    Valuation is based upon quoted prices for identical instruments traded in active
markets.
 Level 2
    
    Valuation is based upon quoted prices for similar instruments in active markets,
quoted prices for identical or similar instruments in markets that are not active, and
model-based valuation techniques for which all significant assumptions are observable in
the market.
 Level 3
    
    Valuation contains unobservable input(s) and is used to the extent observable inputs
are not available, thereby allowing for situations in which there is little, if any, market
activity. Level 3 instruments typically include, in addition to unobservable or Level 3
components, observable components.
  9




---



##### 



The Fair Value Option for Financial Assets and Financial
Liabilities Financial Instruments, Financial Instruments, the Fair
Value Option.
  Financial Instruments, the Fair Value Option.
  Fair Value Measurements, Financial
Instruments, Fair Value Option Fair Value Measurements and Disclosures, Fair Value Measurements and Disclosures Fair
Value Measurements and Disclosures
 10




---



##### 



Financial Instruments, Fair Value Option,
   11




---



##### 



Fair Value Measurements
and Disclosures
 Changes in fair value fornine months ended September 30,2009 measured at fair valueFair Value Measurement at
    
    
    pursuant to election ofSeptember 30, 2009
    
    
    the fair value optionSignificant Other
    
    
    SignificantFair Value
    
    
    Observable
    
    
    UnobservableMeasurements
    
    
    Inputs
    
    
    Inputs
    
    
    Other Gains or Losses inDescription
    
    9/30/2009
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    Pretax Income(In thousands)AssetsTrading securities (a)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (132
    )Securities available for sale
    
    
    64,689
    
    
    
    64,689
    
    
    
    
    
    
    
    Interest rate swap hedging securities (a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )LiabilitiesSubordinated debentures
    
    
    9,842
    
    
    
    
    
    
    
    9,842
    
    
    
    2,915Interest rate swap hedging subordinated
debentures (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (325
    )$
    2,383
 
 (a)
    
    In the first quarter of 2009, the Corporation elected to sell substantially all of the investment securities recorded
under SFAS 159 and to unwind the interest rate swap position with the counterparty.(b)
    
    In the first quarter of 2009, the Corporation elected to unwind the interest rate swap position with the counterparty. Changes in fair value fortwelve months ended December 31,2008 measured at fair valueFair Value Measurement at
    
    
    pursuant to election ofDecember 31, 2008
    
    
    the fair value optionSignificant Other
    
    
    SignificantFair Value
    
    
    Observable
    
    
    UnobservableMeasurements
    
    
    Inputs
    
    
    Inputs
    
    
    Other Gains or Losses inDescription
    
    12/31/08
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    Pretax Income(In thousands)AssetsTrading securities
    
    $
    17,463
    
    
    $
    17,463
    
    
    $
    
    
    
    $
    262Securities available for sale
    
    
    76,552
    
    
    
    76,552
    
    
    
    
    
    
    
    Interest rate swap hedging securities
    
    
    (958
    )
    
    
    (958
    )
    
    
    
    
    
    
    (417
    )LiabilitiesFederal Home Loan Bank Advances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )Subordinated debentures
    
    
    12,757
    
    
    
    
    
    
    
    12,757
    
    
    
    4,840Interest rate swap hedging subordinated
debentures
    
    
    3,538
    
    
    
    3,538
    
    
    
    
    
    
    
    2,870$
    7,541
  12




---



##### 



Changes in level 3 recurring fair value measurements
   Changes in unrealized gains(losses) related to financialFor the three
    
    
    
    
    
    Total realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    instruments for the threemonths ended
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    months ended held atSeptember 30, 2009
    
    July 1, 2009
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    September 30, 2009
    
    September 30, 2009(In thousands)Subordinated
Debentures
    
    $
    11,155
    
    
    $
    1,313
    
    
    $
    
    
    
    $
    
    
    
    $
    9,842
    
    
    $
    1,313
 Changes in unrealized gains(losses) related to financialFor the nine
    
    
    
    
    
    Total realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    instruments for the ninemonths ended
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    months ended held atSeptember 30, 2009
    
    January 1, 2009
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    September 30, 2009
    
    September 30, 2009(In thousands)Subordinated
Debentures
    
    $
    12,757
    
    
    $
    2,915
    
    
    $
    
    
    
    $
    
    
    
    $
    9,842
    
    
    $
    2,915
 13




---



##### 



Assets Measured at Fair Value on a Nonrecurring Basis
 Residential Mortgages Held for Sale
  Impaired Loans
 Accounting by
Creditors for Impairment of a Loan Receivables
 Other Real Estate Owned
   Quoted Prices inActive Markets for
    
    Significant Other
    
    SignificantIdentical Assets
    
    Observable Inputs
    
    Unobservable InputsAssets:
    
    Fair Value
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)(In thousands)
    
    
    
    
    
    
    
    
    
    Total Losses for theNine months endedSeptember 30, 2009September 30, 2009Residential mortgages
held for sale
    
    $
    2,625
    
    
    $
    
    
    
    $
    
    
    
    $
    2,625
    
    
    $
    Impaired loans accounted
for under FAS 114
    
    $
    30,517
    
    
    $
    
    
    
    $
    
    
    
    $
    30,517
    
    
    $
    7,048Other real estate owned
    
    $
    6,528
    
    
    $
    
    
    
    $
    
    
    
    $
    6,528
    
    
    $
    1,127Total Losses for theYear endedDecember 31, 2008December 31, 2008Impaired loans accounted
for under FAS 114
    
    $
    17,936
    
    
    $
    
    
    
    $
    
    
    
    $
    17,936
    
    
    $
    4,509Other real estate owned
    
    $
    2,913
    
    
    $
    
    
    
    $
    
    
    
    $
    2,913
    
    
    $
    1,075
 14




---



##### 



Financial Instruments
 September 30, 2009
    
    December 31, 2008Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair Value(In thousands)Financial AssetsCash and cash equivalents
    
    $
    31,395
    
    
    $
    31,395
    
    
    $
    16,162
    
    
    $
    16,162Trading securities (a)
    
    
    
    
    
    
    
    
    
    
    17,463
    
    
    
    17,463Securities available for sale, at fair value
    
    
    64,939
    
    
    
    64,939
    
    
    
    76,552
    
    
    
    76,552Securities held to maturity, at amortized cost
    
    
    3,480
    
    
    
    3,428
    
    
    
    1,515
    
    
    
    1,494FHLB stock
    
    
    5,877
    
    
    
    5,877
    
    
    
    5,877
    
    
    
    5,877Residential mortgages held for sale
    
    
    2,625
    
    
    
    2,625
    
    
    
    3,302
    
    
    
    3,302Loans, net of allowance
    
    
    400,739
    
    
    
    415,586
    
    
    
    399,802
    
    
    
    416,903Accrued interest receivable
    
    
    2,190
    
    
    
    2,190
    
    
    
    2,479
    
    
    
    2,479Interest Rate Swap
    
    
    
    
    
    
    
    
    
    
    3,538
    
    
    
    3,538Financial LiabilitiesDemand and savings deposits
    
    
    105,414
    
    
    
    105,414
    
    
    
    80,908
    
    
    
    80,908Time deposits
    
    
    265,215
    
    
    
    270,526
    
    
    
    276,468
    
    
    
    286,145Repurchase agreements
    
    
    44,771
    
    
    
    44,771
    
    
    
    39,394
    
    
    
    39,394Federal Home Loan Bank advances
    
    
    87,700
    
    
    
    88,445
    
    
    
    108,200
    
    
    
    111,738Accrued interest payable
    
    
    748
    
    
    
    748
    
    
    
    1,050
    
    
    
    1,050Subordinated debentures (a)
    
    
    9,842
    
    
    
    9,842
    
    
    
    12,757
    
    
    
    12,757Interest Rate Swap
    
    
    
    
    
    
    
    
    
    
    958
    
    
    
    958
 
 (a)
    
    Carried at fair value ASC 825, Financial Instruments, The Fair Value Option for
Financial Assets and Liabilities, for the entire category.  Cash and cash equivalents:
 Securities, Federal Home Loan Bank stock:
 Loans:
 Residential mortgages held for sale:
 15




---



##### 



Deposits:
 Federal Home Loan Bank advances:
 Repurchase agreements:
 Accrued interest:
 Subordinated debentures: Financial Instruments, The Fair Value Option.
 Commitments:
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
   16




---



##### 



EXECUTIVE SUMMARY
     17




---



##### 



Assets
   18




---



##### 



September 30,
    
    
    Percentage
    
    
    December 31,
    
    
    Percentage
    
    
    Net
    
    
    Net2009
    
    
    of total loans
    
    
    2008
    
    
    of total loans
    
    
    Change
    
    
    Change %(In thousands, except percentages)Loans held for sale:Residential real estate
    
    $
    2,625
    
    
    
    
    
    
    $
    3,302
    
    
    
    
    
    
    $
    (677
    )
    
    
    -20.5
    %Loans held in the portfolio:Commercial real estate
    
    $
    279,369
    
    
    
    67.7
    %
    
    $
    284,811
    
    
    
    70.0
    %
    
    $
    (5,442
    )
    
    
    (1.9
    %)Commercial and industrial
    
    
    53,134
    
    
    
    12.9
    %
    
    
    38,714
    
    
    
    9.5
    %
    
    
    14,420
    
    
    
    37.2
    %Residential real estate
    
    
    49,710
    
    
    
    12.0
    %
    
    
    54,409
    
    
    
    13.4
    %
    
    
    (4,699
    )
    
    
    (8.6
    %)Home equity lines
    
    
    22,723
    
    
    
    5.5
    %
    
    
    21,230
    
    
    
    5.2
    %
    
    
    1,493
    
    
    
    7.0
    %Consumer loans
    
    
    7,169
    
    
    
    1.7
    %
    
    
    7,107
    
    
    
    1.7
    %
    
    
    62
    
    
    
    0.9
    %Credit cards
    
    
    829
    
    
    
    0.2
    %
    
    
    846
    
    
    
    0.2
    %
    
    
    (17
    )
    
    
    (2.0
    %)Total loans
    
    $
    412,934
    
    
    
    100.0
    %
    
    $
    407,117
    
    
    
    100.0
    %
    
    $
    5,817
    
    
    
    1.4
    %
   19




---



##### 



20




---



##### 



Accounting by Debtors and Creditors for Troubled Debt Restructurings
 September 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Nonaccrual loans:Commercial real estate
    
    $
    23,161
    
    
    $
    12,579Commercial and industrial
    
    
    876
    
    
    
    96Residential real estate
    
    
    5,121
    
    
    
    3,578Home equity lines
    
    
    485
    
    
    
    760Consumer loans
    
    
    729
    
    
    
    571Credit cards
    
    
    
    
    
    
    Total
    
    
    30,372
    
    
    
    17,584Accruing loans delinquent more than 90 days:Commercial real estate
    
    $
    
    
    
    $
    Commercial and industrial
    
    
    139
    
    
    
    Residential real estate
    
    
    
    
    
    
    Home equity lines
    
    
    
    
    
    
    Consumer loans
    
    
    
    
    
    
    Credit cards
    
    
    6
    
    
    
    44Total
    
    
    145
    
    
    
    44Total nonperforming loans
    
    $
    30,517
    
    
    $
    17,628Troubled debt restructured loans:Commercial real estate
    
    $
    13,316
    
    
    $
    6,078Commercial and industrial
    
    
    143
    
    
    
    1,589Consumer loans
    
    
    100
    
    
    
    Residential real estate
    
    
    1,525
    
    
    
    495Total
    
    
    15,084
    
    
    
    8,162Other real estate owned:Commercial real estate
    
    
    4,427
    
    
    
    2,493Residential real estate
    
    
    2,101
    
    
    
    420Total
    
    
    6,528
    
    
    
    2,913Other repossessed assets  boats
    
    
    421
    
    
    
    976Total nonperforming loans to total loans
    
    
    7.39
    %
    
    
    4.33
    %Allowance for loan losses to nonperforming loans
    
    
    39.96
    %
    
    
    41.19
    %
 Accounting by Debtors and Creditors for Troubled Debt Restructurings
 21




---



##### 



Nine Months Ended
    
    
    Year EndedSeptember 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Balance at beginning of the period
    
    $
    7,315
    
    
    $
    6,403Charge-offs:Commercial real estate
    
    
    3,389
    
    
    
    6,895Commercial and industrial
    
    
    283
    
    
    
    270Residential real estate
    
    
    948
    
    
    
    426Home equity lines
    
    
    208
    
    
    
    577Consumer loans
    
    
    73
    
    
    
    669Credit cards
    
    
    48
    
    
    
    33Total charge-offs
    
    
    4,949
    
    
    
    8,870Recoveries:Commercial real estate
    
    
    5
    
    
    
    52Commercial and industrial
    
    
    79
    
    
    
    218Residential real estate
    
    
    23
    
    
    
    Home equity lines
    
    
    2
    
    
    
    1Consumer loans
    
    
    70
    
    
    
    7Credit cards
    
    
    
    
    
    
    2Total recoveries
    
    
    179
    
    
    
    280Net charge-offs (recoveries)
    
    
    4,770
    
    
    
    8,590Provision charged to earnings
    
    
    9,650
    
    
    
    9,502Balance at the end of the period
    
    $
    12,195
    
    
    $
    7,315As a percentage of total portfolio loans
    
    
    2.95
    %
    
    
    1.80
    %Ratio of net charge-offs during the
period to average loans during
the period
    
    
    1.52
    %
    
    
    2.17
    %
  22




---



##### 



Liabilities
   Percentage
    
    
    
    
    
    
    PercentageSeptember 30,
    
    
    of total
    
    
    December 31,
    
    
    of total
    
    
    Net
    
    
    Net2009
    
    
    deposits
    
    
    2008
    
    
    deposits
    
    
    Change
    
    
    Change %(In thousands, except percentages)Noninterest bearing demand
    
    $
    59,262
    
    
    
    16.0
    %
    
    $
    34,169
    
    
    
    9.6
    %
    
    $
    25,093
    
    
    
    73.4
    %NOW accounts
    
    
    17,365
    
    
    
    4.7
    %
    
    
    13,670
    
    
    
    3.8
    %
    
    
    3,695
    
    
    
    27.0
    %Money market accounts
    
    
    19,825
    
    
    
    5.3
    %
    
    
    24,484
    
    
    
    6.9
    %
    
    
    (4,659
    )
    
    
    (19.0
    %)Savings deposits
    
    
    8,962
    
    
    
    2.4
    %
    
    
    8,585
    
    
    
    2.4
    %
    
    
    377
    
    
    
    4.4
    %Time deposits under $100,000
    
    
    51,958
    
    
    
    14.0
    %
    
    
    43,684
    
    
    
    12.2
    %
    
    
    8,274
    
    
    
    18.9
    %Time deposits $100,000 and over
    
    
    213,257
    
    
    
    57.5
    %
    
    
    232,783
    
    
    
    65.1
    %
    
    
    (19,526
    )
    
    
    (8.4
    %)Total deposits
    
    $
    370,629
    
    
    
    100.0
    %
    
    $
    357,375
    
    
    
    100.0
    %
    
    $
    13,254
    
    
    
    3.7
    %
 23




---



##### 



September 30,
    
    December 31,2009
    
    2008(Dollars in thousands)Amount outstanding at end of periodShort-term repurchase agreements
    
    $
    25,771
    
    
    $
    20,394Short-term FHLB advances
    
    $
    29,000
    
    
    $
    25,500Weighted average interest rate on ending balanceShort-term repurchase agreements
    
    
    1.50
    %
    
    
    1.62
    %Short-term FHLB advances
    
    
    3.77
    %
    
    
    3.50
    %Maximum amount outstanding at any month end
during the yearShort-term repurchase agreements
    
    $
    25,771
    
    
    $
    20,394Short-term FHLB advances
    
    $
    37,000
    
    
    $
    25,500Average amount outstanding during the yearShort-term repurchase agreements
    
    $
    20,411
    
    
    $
    13,589Short-term FHLB advances
    
    $
    34,000
    
    
    $
    17,484Weighted average interest rateShort-term repurchase agreements
    
    
    1.20
    %
    
    
    1.97
    %Short-term FHLB advances
    
    
    3.86
    %
    
    
    4.05
    %
    Fair Value
    
    
    Average rateat end of period
    
    
    at end of period(In thousands, except percentages)Short-term FHLB advances
    
    $
    29,000
    
    
    
    3.77
    %Long-term FHLB advances
    
    $
    58,700
    
    
    
    4.73
    %$
    87,700
    
    
    
    4.41
    %
 24




---



##### 



Liquidity and Capital Resources
   September 30,
    
    December 31,

    
    Minimum Ratio
    
    Ratio2009
    
    2008

    
    for Capital
    
    to beCapital
    
    Ratio
    
    Capital
    
    Ratio
    
    Adequacy Purposes
    
    Well Capitalized(In thousands, except percentages)Tier I capital to risk-weighted
assetsConsolidated
    
    $
    35,096
    
    
    
    8.66
    %
    
    $
    45,054
    
    
    
    10.41
    %
    
    
    4
    %
    
    NABank only
    
    
    36,794
    
    
    
    9.03
    %
    
    
    39,928
    
    
    
    9.28
    %
    
    
    4
    %
    
    
    6
    %Total capital to risk-weighted
assetsConsolidated
    
    $
    49,478
    
    
    
    12.21
    %
    
    $
    57,199
    
    
    
    13.22
    %
    
    
    8
    %
    
    NABank only
    
    
    41,976
    
    
    
    10.30
    %
    
    
    45,338
    
    
    
    10.54
    %
    
    
    8
    %
    
    
    10
    %Tier I capital to average assetsConsolidated
    
    $
    35,096
    
    
    
    6.44
    %
    
    $
    45,054
    
    
    
    8.21
    %
    
    
    4
    %
    
    NABank only
    
    
    36,794
    
    
    
    6.77
    %
    
    
    39,928
    
    
    
    7.30
    %
    
    
    4
    %
    
    
    5
    %
  25




---



##### 



AccumulatedOtherPreferred
    
    
    Common
    
    
    Retained
    
    
    Comprehensive
    
    
    TotalStock
    
    
    Stock
    
    
    Earnings
    
    
    Income/(Loss)
    
    
    EquityBeginning balance, January 1, 2009
    
    $
    3,050
    
    
    $
    32,125
    
    
    $
    (516
    )
    
    $
    (265
    )
    
    $
    34,394Issuance of preferred stock
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500Cash dividend on preferrred shares
    
    
    
    
    
    
    
    
    
    
    (262
    )
    
    
    
    
    
    
    (262
    )SFAS 123R expensing of options
    
    
    
    
    
    
    67
    
    
    
    
    
    
    
    
    
    
    
    67Net loss
    
    
    
    
    
    
    
    
    
    
    (4,711
    )
    
    
    
    
    
    
    (4,711
    )Change in unrealized gain/loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    487
    
    
    
    487Ending balance, September 30, 2009
    
    $
    3,550
    
    
    $
    32,192
    
    
    $
    (5,489
    )
    
    $
    222
    
    
    $
    30,475
    Net Interest Income
  26




---



##### 



27




---



##### 



Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2009 vs. 2008
    
    
    September 30, 2009 vs. 2008Increase (Decrease)
    
    
    
    
    
    
    Increase (Decrease)Due to Changes In
    
    
    
    
    
    
    Due to Changes InVolume
    
    
    
    
    
    
    
    
    
    
    VolumeTotal
    
    
    and Both
    
    
    Rate
    
    
    Total
    
    
    and Both
    
    
    Rate(In thousands)Earning Assets  Interest
Income:Loans
    
    $
    132
    
    
    $
    256
    
    
    $
    (124
    )
    
    $
    181
    
    
    $
    1,310
    
    
    $
    (1,129
    )Securities, including trading
    
    
    (376
    )
    
    
    (226
    )
    
    
    (150
    )
    
    
    (663
    )
    
    
    (439
    )
    
    
    (224
    )Federal funds sold
    
    
    (55
    )
    
    
    3
    
    
    
    (58
    )
    
    
    (351
    )
    
    
    (10
    )
    
    
    (341
    )Total
    
    
    (299
    )
    
    
    33
    
    
    
    (332
    )
    
    
    (833
    )
    
    
    861
    
    
    
    (1,694
    )Deposits and
Borrowed Funds 
Interest Expense:NOW and money market accounts
    
    
    (120
    )
    
    
    (13
    )
    
    
    (107
    )
    
    
    (432
    )
    
    
    (64
    )
    
    
    (368
    )Savings deposits
    
    
    (60
    )
    
    
    (12
    )
    
    
    (48
    )
    
    
    (143
    )
    
    
    (25
    )
    
    
    (118
    )Time deposits
    
    
    (342
    )
    
    
    208
    
    
    
    (550
    )
    
    
    (937
    )
    
    
    736
    
    
    
    (1,673
    )FHLB advances and
repurchase agreements
    
    
    (180
    )
    
    
    (118
    )
    
    
    (62
    )
    
    
    (270
    )
    
    
    (79
    )
    
    
    (191
    )Subordinated debentures
    
    
    116
    
    
    
    (212
    )
    
    
    328
    
    
    
    221
    
    
    
    (531
    )
    
    
    752Total
    
    
    (586
    )
    
    
    (147
    )
    
    
    (439
    )
    
    
    (1,561
    )
    
    
    37
    
    
    
    (1,598
    )Net Interest Income
    
    $
    287
    
    
    $
    180
    
    
    $
    107
    
    
    $
    728
    
    
    $
    824
    
    
    $
    (96
    )
    28




---



##### 



29




---



##### 



Average Balance Sheet
  Three Months Ended September 30,2009
    
    
    2008Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid(In thousands)AssetsLoans
    
    $
    416,713
    
    
    
    6,510
    
    
    
    6.27
    %
    
    $
    397,111
    
    
    $
    6,378
    
    
    
    6.39
    %Securities
    
    
    73,247
    
    
    
    719
    
    
    
    3.93
    %
    
    
    96,414
    
    
    
    1,095
    
    
    
    4.55
    %Federal funds sold
    
    
    20,840
    
    
    
    9
    
    
    
    0.17
    %
    
    
    14,140
    
    
    
    64
    
    
    
    1.80
    %Total Earning Assets /
Total Interest Income /
Average Yield
    
    
    510,800
    
    
    
    7,238
    
    
    
    5.68
    %
    
    
    507,665
    
    
    
    7,537
    
    
    
    5.91
    %Cash and due from banks
    
    
    10,807
    
    
    
    
    
    
    
    
    
    
    
    8,684All other assets
    
    
    25,483
    
    
    
    
    
    
    
    
    
    
    
    24,564Total Assets
    
    $
    547,090
    
    
    
    
    
    
    
    
    
    
    $
    540,913Liabilities & Stockholders EquityNOW and money market accounts
    
    $
    38,961
    
    
    
    55
    
    
    
    0.57
    %
    
    $
    48,162
    
    
    
    175
    
    
    
    1.45
    %Savings deposits
    
    
    8,941
    
    
    
    13
    
    
    
    0.58
    %
    
    
    17,358
    
    
    
    73
    
    
    
    1.67
    %Time deposits
    
    
    266,745
    
    
    
    2,297
    
    
    
    3.45
    %
    
    
    240,957
    
    
    
    2,639
    
    
    
    4.36
    %FHLB advances and repurchase agreements
    
    
    132,010
    
    
    
    1,342
    
    
    
    4.08
    %
    
    
    142,481
    
    
    
    1,522
    
    
    
    4.25
    %ESOP Loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    6.00
    %Subordinated debentures
    
    
    11,140
    
    
    
    311
    
    
    
    6.71
    %
    
    
    14,528
    
    
    
    195
    
    
    
    4.18
    %Total Interest Bearing Liabilities/
Total Interest Expense / Average 
Interest Rate Spread
    
    
    457,797
    
    
    
    4,018
    
    
    
    3.52
    %
    
    
    463,493
    
    
    
    4,604
    
    
    
    3.92
    %Noninterest bearing deposits
    
    
    52,903
    
    
    
    
    
    
    
    
    
    
    
    40,150All other liabilities
    
    
    3,681
    
    
    
    
    
    
    
    
    
    
    
    4,112Stockholders equity
    
    
    32,709
    
    
    
    
    
    
    
    
    
    
    
    33,158Total Liabilities & Equity
    
    $
    547,090
    
    
    
    
    
    
    
    
    
    
    $
    540,913Net Interest Income
    
    
    
    
    
    $
    3,220
    
    
    
    
    
    
    
    
    
    
    $
    2,933Net Interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.16
    %
    
    
    
    
    
    
    
    
    
    
    1.99
    %Net Interest Margin (Net Interest Income /
Total Earning Assets)
    
    
    
    
    
    
    
    
    
    
    2.53
    %
    
    
    
    
    
    
    
    
    
    
    2.30
    %Net Interest Margin (fully taxable equivalent)
    
    
    
    
    
    
    
    
    
    
    2.56
    %
    
    
    
    
    
    
    
    
    
    
    2.36
    %
 30




---



##### 



Nine Months Ended September 30,2009
    
    
    2008Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid(In thousands)AssetsLoans
    
    $
    424,447
    
    
    
    19,423
    
    
    
    6.12
    %
    
    $
    395,269
    
    
    $
    19,242
    
    
    
    6.50
    %Securities
    
    
    80,920
    
    
    
    2,576
    
    
    
    4.24
    %
    
    
    94,776
    
    
    
    3,239
    
    
    
    4.56
    %Federal funds sold
    
    
    13,246
    
    
    
    22
    
    
    
    0.22
    %
    
    
    18,724
    
    
    
    373
    
    
    
    2.66
    %Total Earning Assets /
Total Interest Income /
Average Yield
    
    
    518,613
    
    
    
    22,021
    
    
    
    5.68
    %
    
    
    508,769
    
    
    
    22,854
    
    
    
    6.00
    %Cash and due from banks
    
    
    11,290
    
    
    
    
    
    
    
    
    
    
    
    8,435All other assets
    
    
    26,008
    
    
    
    
    
    
    
    
    
    
    
    24,313Total Assets
    
    $
    555,911
    
    
    
    
    
    
    
    
    
    
    $
    541,517Liabilities & Stockholders EquityNOW and money market accounts
    
    $
    37,873
    
    
    
    205
    
    
    
    0.72
    %
    
    $
    49,876
    
    
    
    637
    
    
    
    1.71
    %Savings deposits
    
    
    9,056
    
    
    
    44
    
    
    
    0.65
    %
    
    
    14,232
    
    
    
    187
    
    
    
    1.76
    %Time deposits
    
    
    272,388
    
    
    
    7,472
    
    
    
    3.67
    %
    
    
    245,084
    
    
    
    8,409
    
    
    
    4.58
    %FHLB advances and repurchase agreements
    
    
    138,794
    
    
    
    4,245
    
    
    
    4.09
    %
    
    
    141,129
    
    
    
    4,515
    
    
    
    4.27
    %ESOP Loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    1
    
    
    
    7.03
    %Subordinated debentures
    
    
    11,796
    
    
    
    924
    
    
    
    10.47
    %
    
    
    16,017
    
    
    
    702
    
    
    
    5.05
    %Total Interest Bearing Liabilities/
Total Interest Expense / Average 
Interest Rate Spread
    
    
    469,907
    
    
    
    12,890
    
    
    
    3.67
    %
    
    
    466,357
    
    
    
    14,451
    
    
    
    4.12
    %Noninterest bearing deposits
    
    
    48,647
    
    
    
    
    
    
    
    
    
    
    
    37,468All other liabilities
    
    
    3,512
    
    
    
    
    
    
    
    
    
    
    
    4,094Stockholders equity
    
    
    33,845
    
    
    
    
    
    
    
    
    
    
    
    33,598Total Liabilities & Equity
    
    $
    555,911
    
    
    
    
    
    
    
    
    
    
    $
    541,517Net Interest Income
    
    
    
    
    
    $
    9,131
    
    
    
    
    
    
    
    
    
    
    $
    8,403Net Interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.01
    %
    
    
    
    
    
    
    
    
    
    
    1.88
    %Net Interest Margin (Net Interest Income /
Total Earning Assets)
    
    
    
    
    
    
    
    
    
    
    2.35
    %
    
    
    
    
    
    
    
    
    
    
    2.20
    %Net Interest Margin (fully taxable equivalent)
    
    
    
    
    
    
    
    
    
    
    2.39
    %
    
    
    
    
    
    
    
    
    
    
    2.27
    %
 Provision for Loan Losses
  31




---



##### 



Noninterest Income
   Noninterest Expense
   32




---



##### 



Provision for Income Taxes
  Accounting for Income Taxes Income Taxes
   Asset/Liability Management
    33




---



##### 



34




---



##### 



After Three
    
    
    After OneWithin
    
    
    Months But
    
    
    Year But
    
    
    AfterThree
    
    
    Within
    
    
    Within
    
    
    FiveMonths
    
    
    One Year
    
    
    Five Years
    
    
    Years
    
    
    Total(In thousands)Interest earning assets:Excess cash and fed funds sold
    
    $
    25,773
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    25,773Securities, at amortized cost
    
    
    7,913
    
    
    
    15,362
    
    
    
    29,514
    
    
    
    15,293
    
    
    
    68,082FHLB stock
    
    
    
    
    
    
    5,877
    
    
    
    
    
    
    
    
    
    
    
    5,877Loans (including held for sale)
    
    
    106,169
    
    
    
    76,579
    
    
    
    195,635
    
    
    
    37,176
    
    
    
    415,559Total
    
    
    139,855
    
    
    
    97,818
    
    
    
    225,149
    
    
    
    52,469
    
    
    $
    515,291Interest bearing liabilitiesNOW and money market accounts
    
    
    16,902
    
    
    
    6,497
    
    
    
    12,799
    
    
    
    991
    
    
    
    37,189Savings deposits
    
    
    538
    
    
    
    2,330
    
    
    
    6,094
    
    
    
    
    
    
    
    8,962Jumbo time deposits
    
    
    57,881
    
    
    
    104,594
    
    
    
    50,782
    
    
    
    
    
    
    
    213,257Time deposits < $100,000
    
    
    5,838
    
    
    
    23,433
    
    
    
    22,687
    
    
    
    
    
    
    
    51,958Repurchase agreements
    
    
    25,771
    
    
    
    
    
    
    
    19,000
    
    
    
    
    
    
    
    44,771FHLB
    
    
    5,000
    
    
    
    24,000
    
    
    
    32,500
    
    
    
    26,200
    
    
    
    87,700Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,557
    
    
    
    18,557Total
    
    
    111,930
    
    
    
    160,854
    
    
    
    143,862
    
    
    
    45,748
    
    
    $
    462,394Rate sensitivity gap
    
    $
    27,925
    
    
    $
    (63,036
    )
    
    $
    81,287
    
    
    $
    6,721Cumulative rate sensitivity gap
    
    
    
    
    
    $
    (35,111
    )
    
    $
    46,176
    
    
    $
    52,897Rate sensitivity gap ratio
    
    
    1.25
    x
    
    
    0.61
    x
    
    
    1.57
    x
    
    
    1.15
    xCumulative rate sensitivity gap ratio
    
    
    
    
    
    
    .87
    x
    
    
    1.11
    x
    
    
    1.11
    x
  35




---



##### 



Percentage ChangeInterest Rate Scenario
    
    In Net Interest IncomeInterest rates up 300 basis points
    
    
    -12.0
    %Interest rates up 200 basis points
    
    
    -7.5
    %Interest rates up 100 basis points
    
    
    -3.6
    %Base Case
    
    
    Interest rates down 100 basis points
    
    
    6.0
    %Interest rates down 200 basis points
    
    
    11.0
    %Interest rates down 300 basis points
    
    
    0.1
    %
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  Item 4T. Controls and Procedures
    36




---



##### 



PART II
 Item 1. Legal Proceedings
  Item 1A. Risk Factors
 An investment in our stock involves a number of risks. Before making an investment decision, you
should carefully consider all of the risks described in this document. If any of the risks
discussed in this document occur, our business, financial condition, liquidity and results of
operations could be materially and adversely affected. Additional risks and uncertainties not
presently known to us also may adversely affect our business, financial condition, liquidity and
results of operations.
 Recent negative developments in the financial industry and credit markets may continue to adversely
impact our financial condition and results of operations.
  Recent legislative and regulatory initiatives to address difficult market and economic conditions
may not stabilize the U.S. banking system.
   37




---



##### 



Current levels of market volatility are unprecedented and may adversely affect us.
  Continued deterioration of the economy and real estate market in Michigan could hurt our business.
  Our business is subject to various lending risks depending on the nature of the borrowers
business, its cash flow and our collateral.
 Our commercial real estate loans involve higher principal amounts than other loans, and repayment
of these loans may be dependent on factors outside our control or the control of our borrowers.
  Repayment of our commercial and industrial loans is often dependent on cash flow of the borrower,
which may be unpredictable, and collateral securing these loans may fluctuate in value.
  Our construction and land development loans are based upon estimates of costs to construct and
value associated with the completed project.
  38




---



##### 



We may elect, or be required, to make further increases in our provision for loan losses and to
charge off additional loans in the future, which could adversely affect our results of operations.
  If our allowance for loan losses is not sufficient to cover actual loan losses, or if we are
required to increase our provision for loan losses, our results of operations and financial
condition could be materially adversely affected.
   39




---



##### 



Changes in economic conditions or interest rates may negatively affect our earnings, capital and
liquidity.
  Our deposit insurance premiums are expected to increase substantially, which will adversely affect
our profits.
      Our funding sources may prove insufficient to fund our balance sheet activities, replace deposits
at maturity and support our future growth.
 40




---



##### 



We may elect or be compelled to seek additional capital in the future, but that capital may not be
available when it is needed.
   We rely heavily on our management and other key personnel, and the loss of any of them may
adversely effect our operations.
  41




---



##### 



Our future success in dependent on our ability to compete effectively in the highly competitive
banking industry.
  We are subject to extensive regulation which could adversely affect our business.
  We continually encounter technological changes, and we may have fewer resources than our
competitors to continue to invest in technological improvements.
  Our articles of incorporation and by-laws and Michigan laws contain certain provisions that could
make a takeover more difficult.
   42




---



##### 



Our ability to pay dividends is limited by law and contract.
  There is a limited trading market for our common stock.
   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  Item 3. Defaults upon Senior Securities.
  Item 4. Submission of Matters to a Vote of Security Holders.
  Item 5. Other Information.
  Item 6. Exhibits.
  43




---



##### 



COMMUNITY CENTRAL BANK CORPORATIONBy:
    S/ DAVID A. WIDLAKDavid A. Widlak;President and CEO
(Principal Executive Officer)By:
    S/ RAY T. COLONIUSRay T. Colonius;Treasurer
(Principal Financial and Accounting Officer) 44




---



##### 



EXHIBITNUMBER
    
    EXHIBIT DESCRIPTION3.1
    
    Articles of Incorporation are incorporated by reference to Exhibit
3.1 of the Corporations Registration Statement on Form SB-2 (SEC
File No. 333-04113).3.2
    
    Bylaws, as amended, of the Corporation are incorporated by
reference to Exhibit 3 of the Corporations Current Quarterly
Report on Form 8-K filed on September 19, 2007 (SEC File No.
000-33373).4.1
    
    Specimen of Stock Certificate of Community Central Bank
Corporation is incorporated by reference to Exhibit 4.2 of the
Corporations Registration Statement on Form SB-2 (SEC File No.
333-04113).4.2
    
    Certificate of Designation of Community Central Bank Corporation
filed on December 30, 2008 with the State of Michigan designating
the preferences, limitations, voting powers and relative rights of
the Series A Preferred Stock, is incorporated by reference to
Exhibit 4.1 of the Corporations Current Report on Form 8-K filed
on January 6, 2009. (SEC File No. 000-33373)4.3
    
    Certificate of Designation of Community Central Bank Corporation
filed on October 2, 2009 with the State of Michigan designating
the preferences, limitations, voting powers and relative rights of
the Series B Preferred Stock, is incorporated by reference to
Exhibit 4.1 of the Corporations Current Report on Form 8-K filed
on October 5, 2009. (SEC File No. 000-33373)4.4
    
    Form of Warrant Agreement issued in connection with the sales of
the Corporation Series B Preferred Stock.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 (SEC File No. 333-04113).10.2
    
    2000 Employee Stock Option Plan is incorporated by reference to
Exhibit 10.6 of the Corporations Annual Report filed with the SEC
on Form 10-KSB for the year ended December 31, 2000 (SEC File No.
000-33373).10.3
    
    2002 Incentive Plan is incorporated by reference to Exhibit 10.7
of the Corporations Annual Report filed with the SEC on Form
10-KSB for the year ended December 31, 2001 (SEC File No.
000-33373).10.4
    
    Community Central Bank Supplemental Executive Retirement Plan, as
amended, and Individual Participant Agreements are incorporated by
reference to Exhibit 10.6 of the Corporations Annual Report on
Form 10-K filed with the SEC for the year ended December 31, 2006
(SEC File No. 000-33373).10.5
    
    Community Central Bank Death Benefit Plan, as amended, is
incorporated by reference to Exhibit 10.7 of the Corporations
Annual Report on Form 10-K for the year ended December 31, 2006
(SEC File No. 000-33373).10.6
    
    Form of Incentive Stock Option Agreement incorporated by reference
to Exhibit 99.1 of the Corporations Current Report on Form 8-K
filed with the SEC on March 25, 2005 (SEC File No. 000-33373).
 45




---



##### 



EXHIBITNUMBER
    
    EXHIBIT DESCRIPTION10.7
    
    Form of Non-qualified Stock Option Agreement is incorporated by
reference to the Corporations Current Report on Form 8-K filed on
January 17, 2006 (SEC File No. 000-33373).10.8
    
    Summary of Current Director Fee Arrangements is incorporated by
reference to Exhibit 10.10 of the Corporations Annual Report
filed with the SEC on Form 10-KSB for the year ended December 31,
2004 (SEC File No. 000-33373).11
    
    Computation of Per Share Earnings31.1
    
    Rule 13a  14(a) Certification (Chief Executive Officer)31.2
    
    Rule 13a  14(a) Certification (Chief Financial Officer)32
    
    Rule 1350 Certifications
 46