##### Table of Contents



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 June 30, 2010
 Commission File No. 000-33373
 COMMUNITY CENTRAL BANK CORPORATION
  Michigan
    
    38-3291744(State or other jurisdiction of incorporation 
or organization)
    
    (IRS Employer Identification No.)
 100 North Main Street, PO Box 7, Mount Clemens, MI 48046-0007
  (Issuers telephone number)
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ
  Class
    
    Outstanding at August 13, 2010Common Stock
    
    3,739,881 Shares




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TABLE OF CONTENTS  PART IItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4T. Controls and ProceduresPART IIItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3b. Defaults upon Senior SecuritiesItem 4. ReservedItem 5. Other InformationItem 6. ExhibitsSIGNATURESEXHIBIT INDEXEX-11EX-31.1EX-31.2EX-32    Table of Contents  
 
 PART I
 
 Item 1. Financial Statements
 Consolidated Balance Sheet
 June 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)(In thousands)AssetsCash and due from banks
    
    $
    61,852
    
    
    $
    33,115Federal funds sold
    
    
    133
    
    
    
    1,048Cash and Cash Equivalents
    
    
    61,985
    
    
    
    34,163Securities available for sale, at fair value
    
    
    43,647
    
    
    
    65,903Securities held to maturity, at amortized cost
    
    
    3,293
    
    
    
    3,467FHLB stock
    
    
    5,877
    
    
    
    5,877Residential mortgage loans held for sale
    
    
    8,474
    
    
    
    3,497LoansCommercial real estate
    
    
    269,882
    
    
    
    273,578Commercial and industrial
    
    
    47,652
    
    
    
    48,782Residential real estate
    
    
    48,288
    
    
    
    51,101Home equity lines of credit
    
    
    21,370
    
    
    
    21,889Consumer loans
    
    
    6,540
    
    
    
    6,961Credit card loans
    
    
    888
    
    
    
    856Total Loans
    
    
    394,620
    
    
    
    403,167Allowance for credit losses
    
    
    (16,310
    )
    
    
    (12,957
    )Net Loans
    
    
    378,310
    
    
    
    390,210Net property and equipment
    
    
    8,834
    
    
    
    9,106Accrued interest receivable
    
    
    1,841
    
    
    
    1,878Other real estate
    
    
    8,337
    
    
    
    9,300Goodwill
    
    
    638
    
    
    
    638Intangible assets, net of amortization
    
    
    46
    
    
    
    57Cash surrender value of Bank Owned Life Insurance
    
    
    11,451
    
    
    
    11,285Other assets
    
    
    7,572
    
    
    
    8,465Total Assets
    
    $
    540,305
    
    
    $
    543,846
 (continued)
 2




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##### Table of Contents



Consolidated Balance Sheet
 June 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)(In thousands)LiabilitiesDepositsNoninterest bearing demand deposits
    
    $
    62,569
    
    
    $
    45,716NOW and money market accounts
    
    
    40,844
    
    
    
    41,872Savings deposits
    
    
    9,545
    
    
    
    8,800Time deposits
    
    
    315,856
    
    
    
    304,743Total Deposits
    
    
    428,814
    
    
    
    401,131Repurchase agreements
    
    
    34,958
    
    
    
    41,106Federal Home Loan Bank advances
    
    
    53,341
    
    
    
    65,700Accrued interest payable
    
    
    780
    
    
    
    618Other liabilities
    
    
    3,309
    
    
    
    2,937Subordinated debentures at fair value option
    
    
    1,834
    
    
    
    8,366Total Liabilities
    
    
    523,036
    
    
    
    519,858Stockholders EquityPreferred stock (1,000,000 $1,000 par value shares authorized;
7,775 shares and 7,265 shares issued and outstanding at
June 30, 2010 and December 31, 2009, respectively)
    
    
    7,645
    
    
    
    7,146Common stock (No par value; 9,000,000 shares authorized;
3,739,881 and 3,737,181 issued and outstanding
at June 30, 2010 and December 31, 2009, respectively)
    
    
    32,274
    
    
    
    32,214Retained deficit
    
    
    (23,154
    )
    
    
    (15,536
    )Accumulated other comprehensive gain
    
    
    504
    
    
    
    164Total Stockholders Equity
    
    
    17,269
    
    
    
    23,988Total Liabilities and Stockholders Equity
    
    $
    540,305
    
    
    $
    543,846
 3




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##### Table of Contents



Consolidated Statements of Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands, except per share data)Interest IncomeLoans (including fees)
    
    $
    5,988
    
    
    $
    6,653
    
    
    $
    11,857
    
    
    $
    12,913Taxable securities
    
    
    414
    
    
    
    721
    
    
    
    912
    
    
    
    1,659Tax exempt securities
    
    
    38
    
    
    
    84
    
    
    
    53
    
    
    
    198Federal funds sold
    
    
    34
    
    
    
    7
    
    
    
    56
    
    
    
    13Total Interest Income
    
    
    6,474
    
    
    
    7,465
    
    
    
    12,878
    
    
    
    14,783Interest ExpenseNOW and money market accounts
    
    
    64
    
    
    
    66
    
    
    
    130
    
    
    
    151Savings deposits
    
    
    12
    
    
    
    13
    
    
    
    25
    
    
    
    30Time deposits
    
    
    2,227
    
    
    
    2,524
    
    
    
    4,491
    
    
    
    5,175Repurchase agreements and fed funds purchased
    
    
    288
    
    
    
    315
    
    
    
    584
    
    
    
    632Federal Home Loan Bank advances
    
    
    664
    
    
    
    1,133
    
    
    
    1,436
    
    
    
    2,271Subordinated debentures
    
    
    311
    
    
    
    311
    
    
    
    623
    
    
    
    613Total interest expense
    
    
    3,566
    
    
    
    4,362
    
    
    
    7,289
    
    
    
    8,872Net Interest Income
    
    
    2,908
    
    
    
    3,103
    
    
    
    5,589
    
    
    
    5,911Provision for Credit Losses
    
    
    4,000
    
    
    
    2,700
    
    
    
    12,200
    
    
    
    5,250Net Interest Income (Loss) after Provision for Credit Losses
    
    
    (1,092
    )
    
    
    403
    
    
    
    (6,611
    )
    
    
    661Noninterest IncomeFiduciary income
    
    
    65
    
    
    
    82
    
    
    
    131
    
    
    
    165Deposit service charges
    
    
    100
    
    
    
    95
    
    
    
    191
    
    
    
    190Net realized security gain
    
    
    131
    
    
    
    228
    
    
    
    209
    
    
    
    356Change in fair value of assets/liabilities carried at
fair value
    
    
    6,031
    
    
    
    838
    
    
    
    6,532
    
    
    
    1,070Mortgage banking income
    
    
    741
    
    
    
    1,290
    
    
    
    1,445
    
    
    
    1,761Other income
    
    
    370
    
    
    
    259
    
    
    
    748
    
    
    
    464Total noninterest income
    
    
    7,438
    
    
    
    2,792
    
    
    
    9,256
    
    
    
    4,006Noninterest ExpenseSalaries, benefits and payroll taxes
    
    
    2,270
    
    
    
    2,249
    
    
    
    4,504
    
    
    
    4,181Net occupancy expense
    
    
    434
    
    
    
    417
    
    
    
    892
    
    
    
    880Other operating expense
    
    
    2,362
    
    
    
    1,790
    
    
    
    4,657
    
    
    
    3,269Total noninterest expense
    
    
    5,066
    
    
    
    4,456
    
    
    
    10,053
    
    
    
    8,330Income (Loss) Before Taxes
    
    
    1,280
    
    
    
    (1,261
    )
    
    
    (7,408
    )
    
    
    (3,663
    )Provision for Income Tax (Benefit) Expense
    
    
    
    
    
    
    (459
    )
    
    
    
    
    
    
    (1,317
    )Net income (loss)
    
    $
    1,280
    
    
    $
    (802
    )
    
    $
    (7,408
    )
    
    $
    (2,346
    )Dividends declared / accumulated on preferred shares
    
    
    64
    
    
    
    106
    
    
    
    200
    
    
    
    156Net income (loss) available on common shares
    
    $
    1,216
    
    
    $
    (908
    )
    
    $
    (7,608
    )
    
    $
    (2,502
    )Per share data:Basic earnings (loss)
    
    $
    0.33
    
    
    $
    (0.24
    )
    
    $
    (2.04
    )
    
    $
    (0.67
    )Diluted earnings (loss)
    
    $
    0.33
    
    
    $
    (0.24
    )
    
    $
    (2.04
    )
    
    $
    (0.67
    )Cash dividends
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 4




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Consolidated Statements of Comprehensive Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands)
    
    
    (In thousands)Net Income (Loss) as Reported
    
    $
    1,280
    
    
    
    ($802
    )
    
    
    ($7,408
    )
    
    
    ($2,346
    )Other Comprehensive IncomeChange in unrealized net gain
(loss) on securities
available for sale
    
    
    276
    
    
    
    (132
    )
    
    
    340
    
    
    
    59Comprehensive Income (Loss)
    
    $
    1,556
    
    
    
    ($934
    )
    
    
    ($7,068
    )
    
    
    ($2,287
    )
 5




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Consolidated Statements of Cash Flow
 Six Months Ended June 30,2010
    
    
    2009(In thousands)Operating ActivitiesNet loss
    
    
    ($7,408
    )
    
    
    ($2,346
    )Adjustments to reconcile net loss to net cash flow from operating activities:Net amortization of security premium
    
    
    403
    
    
    
    166Net gain on available for sale securities
    
    
    (209
    )
    
    
    (356
    )Net gain on instruments at fair value
    
    
    (6,532
    )
    
    
    (1,070
    )Provision for credit losses
    
    
    12,200
    
    
    
    5,250Depreciation expense
    
    
    352
    
    
    
    323Deferred income tax benefit
    
    
    
    
    
    
    (1,317
    )Stock based compensation
    
    
    47
    
    
    
    40Decrease in accrued interest receivable
    
    
    37
    
    
    
    454Decrease in other assets
    
    
    1,982
    
    
    
    2,596Increase (decrease) in accrued interest payable
    
    
    162
    
    
    
    (365
    )Increase (decrease) in other liabilities
    
    
    372
    
    
    
    (435
    )Increase in loans sold held for sale
    
    
    (4,977
    )
    
    
    (6,208
    )(Increase) decrease in other real estate
    
    
    963
    
    
    
    (1,983
    )Net Cash Used in Operating Activities
    
    
    (2,608
    )
    
    
    (5,251
    )Investing ActivitiesSales, maturities, calls and prepayments of securities available for sale
    
    
    36,983
    
    
    
    69,638Purchases of securities available for sale
    
    
    (15,879
    )
    
    
    (56,386
    )Maturities, calls, sales and prepayments of trading securities
    
    
    
    
    
    
    24,700Transfer and purchase of trading securities
    
    
    
    
    
    
    (7,237
    )Maturities, calls, and prepayments of held to maturity securities
    
    
    164
    
    
    
    143Purchases of held to maturity securities
    
    
    
    
    
    
    (2,088
    )Increase in loans
    
    
    (301
    )
    
    
    (7,693
    )Purchases of property and equipment
    
    
    (80
    )
    
    
    (55
    )Net Cash Provided by Investing Activities
    
    
    20,887
    
    
    
    21,022Financing ActivitiesNet increase in demand and savings deposits
    
    
    16,570
    
    
    
    13,836Net increase (decrease) in time deposits
    
    
    11,114
    
    
    
    (1,659
    )Net (decrease) increase in short term borrowings
    
    
    (6,148
    )
    
    
    1,026FHLB advance repayments
    
    
    (12,359
    )
    
    
    (10,500
    )Stock awards
    
    
    3
    
    
    
    Preferred Stock Issuance
    
    
    499
    
    
    
    500Preferred Stock dividend paid
    
    
    (136
    )
    
    
    (156
    )Net Cash Provided by Financing Activities
    
    
    9,543
    
    
    
    3,047Increase in Cash and Cash Equivalents
    
    
    27,822
    
    
    
    18,818Cash and Cash Equivalents at the Beginning of the Period
    
    
    34,163
    
    
    
    16,162Cash and Cash Equivalents at the End of the Period
    
    $
    61,985
    
    
    $
    34,980Supplemental Disclosure of Cash Flow InformationInterest paid
    
    $
    7,127
    
    
    $
    9,237Loans transferred to other real estate owned
    
    $
    1,498
    
    
    $
    2,650
 6




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Notes to Consolidated Financial Statements
(unaudited)
    Critical Accounting Policies:
       7




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##### Table of Contents



Fair Value Hierarchy
 Fair Value Measurements,
      Financial Instruments, the Fair Value Option.
  Financial Instruments, the Fair Value Option.
 8




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##### Table of Contents



Fair Value Measurements, Financial Instruments,
Fair Value Option Fair Value Measurements and Disclosures, Fair Value Measurements and Disclosures Fair Value Measurements and
Disclosures Financial
Instruments, Fair Value Option,
  9




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Changes in fair value forsix months ended June 30,2010 measured at fairFair Value Measurement at
    
    
    
    
    
    
    value pursuant to electionJune 30, 2010
    
    
    
    
    
    
    of the fair value optionSignificant Other
    
    
    SignificantFair Value
    
    
    Observable
    
    
    UnobservableMeasurements
    
    
    Inputs
    
    
    Inputs
    
    
    Other Gains or Losses inDescription
    
    06/30/10
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    pretax income(In thousands)Securities available for saleU.S. government agencies
    
    $
    1,118
    
    
    $
    1,118
    
    
    $
    
    
    
    $
    U.S. agency mortgage backed securities
    
    
    27,151
    
    
    
    27,151
    
    
    
    
    
    
    
    U.S. agency collateralized mortgage obligations
    
    
    11,524
    
    
    
    11,524
    
    
    
    
    
    
    
    Municipal securities
    
    
    3,101
    
    
    
    3,101
    
    
    
    
    
    
    
    Mutual fund and trust preferred securities
    
    
    753
    
    
    
    753
    
    
    
    
    
    
    
    Subordinated debentures
    
    
    1,834
    
    
    
    
    
    
    
    1,834
    
    
    
    6,5326,532
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##### Table of Contents



Changes in fair value forsix months ended June 30,2009 measured at fairFair Value Measurement at
    
    
    
    
    
    
    value pursuant to electionJune 30, 2009
    
    
    
    
    
    
    of the fair value optionSignificant Other
    
    
    SignificantFair Value
    
    
    Observable
    
    
    UnobservableMeasurements
    
    
    Inputs
    
    
    Inputs
    
    
    Other Gains or Losses inDescription
    
    06/30/10
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    pretax income(In thousands)AssetsTrading securities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (150
    )Securities available for saleU.S. agency mortgage backed securities
    
    
    29,913
    
    
    
    29,913
    
    
    
    
    
    
    
    U.S. agency collateralized mortgage obligations
    
    
    26,126
    
    
    
    26,126
    
    
    
    
    
    
    
    Municipal securities
    
    
    6,780
    
    
    
    6,780
    
    
    
    
    
    
    
    Mutual fund and trust preferred securities
    
    
    684
    
    
    
    684
    
    
    
    
    
    
    
    Interest rate swap hedging securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )LiabilitiesSubordinated debentures
    
    
    11,115
    
    
    
    
    
    
    
    11,115
    
    
    
    1,620Interest rate swap hedging subordinated
debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (325
    )$
    1,070
  Changes in level 3 recurring fair value measurements
  11




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Changes in unrealized gains andTotal realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    (losses) related to financialFor the three months
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    instruments for the three monthsended June 30, 2010
    
    April 1, 2010
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    June 30, 2010
    
    ended held at June 30, 2010(In thousands)Subordinated
Debentures
    
    $
    7,865
    
    
    $
    6,031
    
    
    $
    
    
    
    $
    
    
    
    $
    1,834
    
    
    $
    6,031
 Changes in unrealized gains andTotal realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    (losses) related to financialFor the six months
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    instruments for the six monthsended June 30, 2010
    
    January 1, 2010
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    June 30, 2010
    
    ended held at June 30, 2010(In thousands)Subordinated 
Debentures
    
    $
    8,366
    
    
    $
    6,532
    
    
    $
    
    
    
    $
    
    
    
    $
    1,834
    
    
    $
    6,532
 Changes in unrealized gains andTotal realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    (losses) related to financialFor the three months
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    instruments for the three monthsended June 30, 2009
    
    April 1, 2009
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    June 30, 2009
    
    ended held at June 30, 2009(In thousands)Subordinated 
Debentures
    
    $
    12,022
    
    
    $
    867
    
    
    $
    
    
    
    $
    
    
    
    $
    11,155
    
    
    $
    867
 Changes in unrealized gains andTotal realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    (losses) related to financialFor the six months
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    instruments for the six monthsended June 30, 2009
    
    January 1, 2009
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    June 30, 2009
    
    ended held at June 30, 2009(In thousands)Subordinated 
Debentures
    
    $
    12,757
    
    
    $
    1,602
    
    
    $
    
    
    
    $
    
    
    
    $
    11,155
    
    
    $
    1,602
 Assets Measured at Fair Value on a Nonrecurring Basis
 Residential Mortgages Held for Sale
  Impaired Loans
 Accounting for
Creditors for Impairment of a Loan
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Other Real Estate Owned
   Quoted Prices inActive Markets
    
    Significant Other
    
    Significantfor Identical Assets
    
    Observable Inputs
    
    Unobservable InputsAssets:
    
    Fair Value
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Total Losses for theThree months endedJune 30, 2010June 30, 2010Impaired loans
    
    $
    44,544
    
    
    $
    
    
    
    $
    
    
    
    $
    44,544
    
    
    $
    3,310Other real estate owned
    
    $
    8,337
    
    
    $
    
    
    
    $
    
    
    
    $
    8,337
    
    
    $
    701Total Losses for theSix months endedJune 30, 2010June 30, 2010Impaired loans
    
    $
    44,544
    
    
    $
    
    
    
    $
    
    
    
    $
    44,544
    
    
    $
    8,278Other real estate owned
    
    $
    8,337
    
    
    $
    
    
    
    $
    
    
    
    $
    8,337
    
    
    $
    1,102
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Quoted Prices inActive Markets
    
    Significant Other
    
    Significantfor Identical Assets
    
    Observable Inputs
    
    Unobservable InputsAssets:
    
    Fair Value
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Total Losses for theThree months endedJune 30, 2009June 30, 2009Impaired loans
    
    $
    30,283
    
    
    $
    
    
    
    $
    
    
    
    $
    30,283
    
    
    $
    1,526Other real estate owned
    
    $
    4,896
    
    
    $
    
    
    
    $
    
    
    
    $
    4,896
    
    
    $
    183Total Losses for theSix months endedJune 30, 2009June 30, 2009Impaired loans
    
    $
    30,283
    
    
    $
    
    
    
    $
    
    
    
    $
    30,283
    
    
    $
    3,282Other real estate owned
    
    $
    4,896
    
    
    $
    
    
    
    $
    
    
    
    $
    4,896
    
    
    $
    436
 Financial Instruments
 June 30, 2010
    
    December 31, 2009Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair Value(In thousands)Financial AssetsCash and cash equivalents
    
    $
    60,030
    
    
    $
    60,030
    
    
    $
    34,163
    
    
    $
    34,163Securities available for sale, at fair value
    
    
    43,647
    
    
    
    43,647
    
    
    
    65,903
    
    
    
    65,903Securities held to maturity, at amortized cost
    
    
    3,293
    
    
    
    3,356
    
    
    
    3,467
    
    
    
    3,469FHLB stock
    
    
    5,877
    
    
    
    5,877
    
    
    
    5,877
    
    
    
    5,877Residential mortgages held for sale
    
    
    8,474
    
    
    
    8,474
    
    
    
    3,497
    
    
    
    3,497Loans, net of allowance
    
    
    378,310
    
    
    
    392,927
    
    
    
    390,210
    
    
    
    402,500Accrued interest receivable
    
    
    1,841
    
    
    
    1,841
    
    
    
    1,878
    
    
    
    1,878Financial LiabilitiesDemand and savings deposits
    
    
    112,958
    
    
    
    112,958
    
    
    
    96,388
    
    
    
    96,388Time deposits
    
    
    315,856
    
    
    
    322,244
    
    
    
    304,743
    
    
    
    311,102Repurchase agreements
    
    
    34,958
    
    
    
    34,958
    
    
    
    41,106
    
    
    
    41,106Federal Home Loan Bank advances
    
    
    53,341
    
    
    
    54,850
    
    
    
    65,700
    
    
    
    66,883Accrued interest payable
    
    
    780
    
    
    
    780
    
    
    
    618
    
    
    
    618Subordinated debentures (a)
    
    
    1,834
    
    
    
    1,834
    
    
    
    8,366
    
    
    
    8,366
 
 (a)
    
    Carried at fair value option under ASC 825, Financial Instruments, the Fair Value Option
for Financial Assets and Liabilities, for the entire category.  Cash and cash equivalents:
 14




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##### Table of Contents



Securities, Federal Home Loan Bank stock:
 Loans:
 Residential mortgages held for sale:
 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
   15




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EXECUTIVE SUMMARY
     16




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##### Table of Contents



17




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##### Table of Contents



Assets
       June 30,
    
    
    Percentage
    
    
    December 31,
    
    
    Percentage
    
    
    Net
    
    
    Net2010
    
    
    of total loans
    
    
    2009
    
    
    of total loans
    
    
    Change
    
    
    Change %(In thousands, except percentages)Loans held for sale:Residential real estate
    
    $
    8,474
    
    
    
    
    
    
    $
    3,497
    
    
    
    
    
    
    $
    4,977
    
    
    
    142.3
    %Loans held in the portfolio:Commercial real estate
    
    $
    269,882
    
    
    
    68.4
    %
    
    $
    273,578
    
    
    
    67.9
    %
    
    $
    (3,696
    )
    
    
    (1.4
    %)Commercial and industrial
    
    
    47,652
    
    
    
    12.1
    %
    
    
    48,782
    
    
    
    12.1
    %
    
    
    (1,130
    )
    
    
    (2.3
    %)Residential real estate
    
    
    48,288
    
    
    
    12.2
    %
    
    
    51,101
    
    
    
    12.7
    %
    
    
    (2,813
    )
    
    
    (5.5
    %)Home equity lines
    
    
    21,370
    
    
    
    5.4
    %
    
    
    21,889
    
    
    
    5.4
    %
    
    
    (519
    )
    
    
    (2.4
    %)Consumer loans
    
    
    6,540
    
    
    
    1.7
    %
    
    
    6,961
    
    
    
    1.7
    %
    
    
    (421
    )
    
    
    (6.0
    %)Credit cards
    
    
    888
    
    
    
    0.2
    %
    
    
    856
    
    
    
    0.2
    %
    
    
    32
    
    
    
    3.7
    %Total loans
    
    $
    394,620
    
    
    
    100.0
    %
    
    $
    403,167
    
    
    
    100.0
    %
    
    $
    (8,547
    )
    
    
    -2.1
    %
 18




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##### Table of Contents



June 30, 2010Amortized
    
    
    Unrealized
    
    
    
    
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)Securities Available for SaleUnited States Government agencies
    
    $
    1,113
    
    
    $
    5
    
    
    $
    
    
    
    $
    1,118U.S. agency mortgage backed securities
    
    
    26,538
    
    
    
    613
    
    
    
    
    
    
    
    27,151U.S. agency collateralized mortgage obligations
    
    
    11,319
    
    
    
    205
    
    
    
    
    
    
    
    11,524Municipal securities
    
    
    3,164
    
    
    
    23
    
    
    
    (86
    )
    
    
    3,101Mutual fund and Trust preferred securities
    
    
    750
    
    
    
    8
    
    
    
    (5
    )
    
    
    753Total Securities Available for Sale
    
    
    42,884
    
    
    
    854
    
    
    
    (91
    )
    
    
    43,647Held to Maturity SecuritiesMunicipal securities
    
    
    460
    
    
    
    5
    
    
    
    (5
    )
    
    
    460Trust preferred securities
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    250U.S. agency mortgage backed securities
    
    
    2,583
    
    
    
    63
    
    
    
    
    
    
    
    2,646Total Held to Maturity Securities
    
    
    3,293
    
    
    
    68
    
    
    
    (5
    )
    
    
    3,356Total Securities
    
    
    46,177
    
    
    
    922
    
    
    
    (96
    )
    
    
    47,003
 19




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December 31, 2009Amortized
    
    
    Unrealized
    
    
    
    
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(In thousands)Securities Available for SaleUnited States Government agencies
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    U.S. agency mortgage backed securities
    
    
    41,847
    
    
    
    237
    
    
    
    (168.00
    )
    
    
    41,916U.S. agency collateralized mortgage
obligations
    
    
    18,541
    
    
    
    321
    
    
    
    (23.00
    )
    
    
    18,839Municipal securities
    
    
    4,515
    
    
    
    24
    
    
    
    (105
    )
    
    
    4,434Mutual fund and Trust preferred securities
    
    
    750
    
    
    
    
    
    
    
    (36
    )
    
    
    714Total Securities Available for Sale
    
    
    65,653
    
    
    
    582
    
    
    
    (332
    )
    
    
    65,903Held to Maturity SecuritiesMunicipal securities
    
    
    560
    
    
    
    4
    
    
    
    (15
    )
    
    
    549Trust preferred securities
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    250U.S. agency mortgage backed securities
    
    
    2,657
    
    
    
    21
    
    
    
    (8
    )
    
    
    2,670Total Held to Maturity Securities
    
    
    3,467
    
    
    
    25
    
    
    
    (23
    )
    
    
    3,469Total Securities
    
    
    69,120
    
    
    
    607
    
    
    
    (355
    )
    
    
    69,372
  June 30, 2010Less than 12 Months
    
    
    Over 12 MonthsGross
    
    
    
    
    
    
    GrossUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    Value(In thousands)Securities Available for SaleUnited States Government agencies
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    U.S. agency mortgage backed securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    U.S. agency collateralized mortgage obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Municipal securities
    
    
    
    
    
    
    
    
    
    
    (55
    )
    
    
    1,003Mutual fund and trust preferred securities
    
    
    (31
    )
    
    
    831
    
    
    
    (5
    )
    
    
    245Total Securities Available for Sale
    
    $
    (31
    )
    
    $
    831
    
    
    $
    (60
    )
    
    $
    1,248
  20




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December 31, 2009Less than 12 Months
    
    
    Over 12 MonthsGross
    
    
    
    
    
    
    GrossUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    Value(In thousands)Securities Available for SaleUnited States Government agencies
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    U.S. agency mortgage backed securities
    
    
    (166
    )
    
    
    19,707
    
    
    
    (2
    )
    
    
    76U.S. agency collateralized mortgage obligations
    
    
    (15
    )
    
    
    3,265
    
    
    
    (8
    )
    
    
    662Municipal securities
    
    
    (20
    )
    
    
    1,026
    
    
    
    (85
    )
    
    
    2,115Mutual fund and trust preferred securities
    
    
    (5
    )
    
    
    495
    
    
    
    (31
    )
    
    
    219Total Securities Available for Sale
    
    $
    (206
    )
    
    $
    24,493
    
    
    $
    (126
    )
    
    $
    3,072
 21




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##### Table of Contents



June 30,
    
    
    December 31,2010
    
    
    2009(In thousands)Nonaccrual loans:Commercial real estate
    
    $
    25,635
    
    
    $
    16,020Commercial and industrial
    
    
    
    
    
    
    584Residential real estate
    
    
    5,135
    
    
    
    5,673Home equity lines
    
    
    335
    
    
    
    219Consumer loans
    
    
    230
    
    
    
    378Credit cards
    
    
    
    
    
    
    Total
    
    
    31,335
    
    
    
    22,874Accruing loans delinquent more than 90 days:Commercial real estate
    
    $
    
    
    
    $
    Commercial and industrial
    
    
    
    
    
    
    Residential real estate
    
    
    
    
    
    
    Home equity lines
    
    
    
    
    
    
    Consumer loans
    
    
    
    
    
    
    Credit cards
    
    
    35
    
    
    
    7Total
    
    
    35
    
    
    
    7Total nonperforming loans
    
    $
    31,370
    
    
    $
    22,881Troubled debt restructured loans:Commercial real estate
    
    $
    27,570
    
    
    $
    20,341Commercial and industrial
    
    
    83
    
    
    
    83Residential real estate
    
    
    1,273
    
    
    
    Total
    
    
    28,926
    
    
    
    20,424Other real estate owned:Commercial real estate
    
    
    7,886
    
    
    
    8,881Residential real estate
    
    
    450
    
    
    
    419Total
    
    
    8,336
    
    
    
    9,300Other repossessed assets  boats
    
    
    490
    
    
    
    494Total nonperforming loans to total loans
    
    
    7.95
    %
    
    
    5.68
    %Allowance for loan losses to nonperforming loans
    
    
    52.00
    %
    
    
    56.62
    %
   22




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##### Table of Contents



Six Months Ended
    
    
    Year EndedJune 30,
    
    
    December 31,2010
    
    
    2009(In thousands)Balance at beginning of the period
    
    $
    12,957
    
    
    $
    7,315Charge-offs:Commercial real estate
    
    
    6,963
    
    
    
    7,257Commercial and industrial
    
    
    586
    
    
    
    1,205Residential real estate
    
    
    1,036
    
    
    
    486Home equity lines
    
    
    228
    
    
    
    538Consumer loans
    
    
    415
    
    
    
    237Credit cards
    
    
    39
    
    
    
    54Total charge-offs
    
    
    9,267
    
    
    
    9,777Recoveries:Commercial real estate
    
    
    21
    
    
    
    72Commercial and industrial
    
    
    206
    
    
    
    400Residential real estate
    
    
    6
    
    
    
    23Home equity lines
    
    
    8
    
    
    
    3Consumer loans
    
    
    178
    
    
    
    71Credit cards
    
    
    1
    
    
    
    Total recoveries
    
    
    420
    
    
    
    569Net charge-offs
    
    
    8,847
    
    
    
    9,208Provision charged to earnings
    
    
    12,200
    
    
    
    14,850Balance at the end of the period
    
    $
    16,310
    
    
    $
    12,957As a percentage of total portfolio loans
    
    
    4.13
    %
    
    
    3.21
    %Ratio of net charge-offs during the
period to average loans during
the period
    
    
    4.43
    %
    
    
    2.22
    %
  23




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##### Table of Contents



Liabilities
   Percentage
    
    
    
    
    
    
    PercentageJune 30,
    
    
    of total
    
    
    December 31,
    
    
    of total
    
    
    Net
    
    
    Net2010
    
    
    deposits
    
    
    2009
    
    
    deposits
    
    
    Change
    
    
    Change %(In thousands, except percentages)Noninterest bearing demand
    
    $
    62,570
    
    
    
    14.6
    %
    
    $
    45,716
    
    
    
    11.4
    %
    
    $
    16,854
    
    
    
    36.9
    %NOW accounts
    
    
    15,939
    
    
    
    3.7
    %
    
    
    17,059
    
    
    
    4.3
    %
    
    
    (1,120
    )
    
    
    -6.6
    %Money market accounts
    
    
    24,905
    
    
    
    5.8
    %
    
    
    24,813
    
    
    
    6.2
    %
    
    
    92
    
    
    
    0.4
    %Savings deposits
    
    
    9,545
    
    
    
    2.2
    %
    
    
    8,800
    
    
    
    2.2
    %
    
    
    745
    
    
    
    8.5
    %Time deposits under $100,000
    
    
    100,405
    
    
    
    23.4
    %
    
    
    77,769
    
    
    
    19.4
    %
    
    
    22,636
    
    
    
    29.1
    %Time deposits $100,000 and over
    
    
    215,451
    
    
    
    50.2
    %
    
    
    226,974
    
    
    
    56.6
    %
    
    
    (11,523
    )
    
    
    (5.1
    %)Total deposits
    
    $
    428,815
    
    
    
    100.0
    %
    
    $
    401,131
    
    
    
    100.0
    %
    
    $
    27,684
    
    
    
    6.9
    %
 24




---



##### Table of Contents



June 30,
    
    
    December 31,2010
    
    
    2009(Dollars in thousands)Amount outstanding at end of periodShort-term repurchase agreements
    
    $
    15,958
    
    
    $
    22,106Short-term FHLB advances
    
    $
    9,874
    
    
    $
    22,000Weighted average interest rate on ending balanceShort-term repurchase agreements
    
    
    0.99
    %
    
    
    1.49
    %Short-term FHLB advances
    
    
    2.34
    %
    
    
    4.56
    %Maximum amount outstanding at any month end
during the yearShort-term repurchase agreements
    
    $
    17,407
    
    
    $
    25,771Short-term FHLB advances
    
    $
    32,000
    
    
    $
    29,000Average amount outstanding during the yearShort-term repurchase agreements
    
    $
    18,666
    
    
    $
    20,863Short-term FHLB advances
    
    $
    21,000
    
    
    $
    31,000Weighted average interest rateShort-term repurchase agreements
    
    
    1.11
    %
    
    
    1.55
    %Short-term FHLB advances
    
    
    3.34
    %
    
    
    4.03
    %
   Fair Value
    
    
    Average rateat end of period
    
    
    at end of period(In thousands, except percentages)Short-term FHLB advances
    
    $
    9,874
    
    
    
    2.34
    %Long-term FHLB advances
    
    $
    43,467
    
    
    
    4.54
    %$
    53,341
    
    
    
    4.13
    %
 25




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##### Table of Contents



Liquidity and Capital Resources
    MinimumRatio for
    
    
    RatioJune 30, 2010
    
    
    December 31, 2009
    
    
    Capital Adequacy
    
    
    to be WellCapital
    
    
    Ratio
    
    
    Capital
    
    
    Ratio
    
    
    Purposes
    
    
    Capitalized(In thousands, except percentages)Tier I capital to risk-weighted assetsConsolidated
    
    $
    11,951
    
    
    
    3.16
    %
    
    $
    24,584
    
    
    
    6.31
    %
    
    
    4
    %
    
    
    NABank only
    
    
    18,351
    
    
    
    4.85
    %
    
    
    31,133
    
    
    
    7.99
    %
    
    
    4
    %
    
    
    6
    %Total capital to risk-weighted assetsConsolidated
    
    $
    23,902
    
    
    
    6.32
    %
    
    $
    44,619
    
    
    
    11.44
    %
    
    
    8
    %
    
    
    NABank only
    
    
    23,223
    
    
    
    6.14
    %
    
    
    36,102
    
    
    
    9.27
    %
    
    
    8
    %
    
    
    10
    %Tier I capital to average assetsConsolidated
    
    $
    11,951
    
    
    
    2.16
    %
    
    $
    24,584
    
    
    
    4.47
    %
    
    
    4
    %
    
    
    NABank only
    
    
    18,351
    
    
    
    3.31
    %
    
    
    31,133
    
    
    
    5.67
    %
    
    
    4
    %
    
    
    5
    %
  26




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##### Table of Contents



AccumulatedOtherPreferred
    
    
    Common
    
    
    Retained
    
    
    Comprehensive
    
    
    TotalStock
    
    
    Stock
    
    
    Earnings
    
    
    Income/(Loss)
    
    
    EquityBeginning balance, January 1, 2010
    
    $
    7,146
    
    
    $
    32,214
    
    
    $
    (15,536
    )
    
    $
    164
    
    
    $
    23,988Issuance of preferred stock
    
    
    499
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    499Cash dividend on preferrred shares
    
    
    
    
    
    
    
    
    
    
    (200
    )
    
    
    
    
    
    
    (200
    )Stock awards
    
    
    
    
    
    
    13
    
    
    
    (10
    )
    
    
    
    
    
    
    3Share based compensation
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    47Net loss
    
    
    
    
    
    
    
    
    
    
    (7,408
    )
    
    
    
    
    
    
    (7,408
    )Change in unrealized gain/loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    340
    
    
    
    340Ending balance, June 30, 2010
    
    $
    7,645
    
    
    $
    32,274
    
    
    $
    (23,154
    )
    
    $
    504
    
    
    $
    17,269
  Preferred Stock Issuance
   27




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##### Table of Contents



Net Interest Income
   Three Months Ended
    
    
    Six Months EndedJune 30, 2010 vs. 2009
    
    
    June 30, 2010 vs. 2009Increase (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
    
    $
    (665
    )
    
    $
    (521
    )
    
    $
    (144
    )
    
    $
    (1,056
    )
    
    $
    (753
    )
    
    $
    (303
    )Securities, including trading
    
    
    (353
    )
    
    
    (158
    )
    
    
    (195
    )
    
    
    (892
    )
    
    
    (124
    )
    
    
    (768
    )Federal funds sold
    
    
    27
    
    
    
    20
    
    
    
    7
    
    
    
    43
    
    
    
    36
    
    
    
    7Total
    
    
    (991
    )
    
    
    (659
    )
    
    
    (332
    )
    
    
    (1,905
    )
    
    
    (841
    )
    
    
    (1,064
    )Deposits and Borrowed Funds -
Interest Expense:NOW and money market accounts
    
    
    (2
    )
    
    
    7
    
    
    
    (9
    )
    
    
    (20
    )
    
    
    13
    
    
    
    (33
    )Savings deposits
    
    
    (1
    )
    
    
    1
    
    
    
    (2
    )
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Time deposits
    
    
    (297
    )
    
    
    319
    
    
    
    (616
    )
    
    
    (685
    )
    
    
    633
    
    
    
    (1,318
    )FHLB advances and
repurchase agreements
    
    
    (496
    )
    
    
    (437
    )
    
    
    (59
    )
    
    
    (883
    )
    
    
    (836
    )
    
    
    (47
    )Subordinated debentures
    
    
    
    
    
    
    (165
    )
    
    
    165
    
    
    
    10
    
    
    
    (313
    )
    
    
    323Total
    
    
    (796
    )
    
    
    (275
    )
    
    
    (521
    )
    
    
    (1,583
    )
    
    
    (503
    )
    
    
    (1,080
    )Net Interest Income
    
    $
    (195
    )
    
    $
    (384
    )
    
    $
    189
    
    
    $
    (322
    )
    
    $
    (338
    )
    
    $
    16
  28




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##### Table of Contents



29




---



##### Table of Contents



Average Balance Sheet
  Three Months Ended June 30,2010
    
    
    2009Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid(In thousands)AssetsLoans
    
    $
    399,802
    
    
    
    5,988
    
    
    
    6.01
    %
    
    $
    434,415
    
    
    $
    6,653
    
    
    
    6.14
    %Securities
    
    
    56,582
    
    
    
    452
    
    
    
    3.20
    %
    
    
    76,304
    
    
    
    805
    
    
    
    4.22
    %Federal funds sold
    
    
    28,229
    
    
    
    34
    
    
    
    0.48
    %
    
    
    11,721
    
    
    
    7
    
    
    
    0.24
    %Total Earning Assets /
Total Interest Income /
Average Yield
    
    
    484,613
    
    
    
    6,474
    
    
    
    5.36
    %
    
    
    522,440
    
    
    
    7,465
    
    
    
    5.73
    %Cash and due from banks
    
    
    45,921
    
    
    
    
    
    
    
    
    
    
    
    11,231All other assets
    
    
    24,590
    
    
    
    
    
    
    
    
    
    
    
    26,744Total Assets
    
    $
    555,124
    
    
    
    
    
    
    
    
    
    
    $
    560,415Liabilities & Stockholders EquityNOW and money market accounts
    
    $
    41,043
    
    
    
    64
    
    
    
    0.63
    %
    
    $
    36,671
    
    
    
    66
    
    
    
    0.72
    %Savings deposits
    
    
    9,608
    
    
    
    12
    
    
    
    0.50
    %
    
    
    8,688
    
    
    
    13
    
    
    
    0.60
    %Time deposits
    
    
    321,071
    
    
    
    2,227
    
    
    
    2.78
    %
    
    
    275,207
    
    
    
    2,524
    
    
    
    3.68
    %FHLB advances and repurchase agreements
    
    
    96,162
    
    
    
    952
    
    
    
    3.97
    %
    
    
    140,355
    
    
    
    1,448
    
    
    
    4.14
    %Subordinated debentures
    
    
    7,799
    
    
    
    311
    
    
    
    6.71
    %
    
    
    11,945
    
    
    
    311
    
    
    
    6.71
    %Total Interest Bearing Liabilities/
Total Interest Expense / Average
Interest Rate Spread
    
    
    475,683
    
    
    
    3,566
    
    
    
    3.01
    %
    
    
    472,866
    
    
    
    4,362
    
    
    
    3.70
    %Noninterest bearing deposits
    
    
    60,806
    
    
    
    
    
    
    
    
    
    
    
    50,282All other liabilities
    
    
    3,744
    
    
    
    
    
    
    
    
    
    
    
    3,401Stockholders equity
    
    
    14,891
    
    
    
    
    
    
    
    
    
    
    
    33,866Total Liabilities & Equity
    
    $
    555,124
    
    
    
    
    
    
    
    
    
    
    $
    560,415Net Interest Income
    
    
    
    
    
    $
    2,908
    
    
    
    
    
    
    
    
    
    
    $
    3,103Net interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.35
    %
    
    
    
    
    
    
    
    
    
    
    2.03
    %Net Interest Margin (Net Interest Income /
Total Earning Assets)
    
    
    
    
    
    
    
    
    
    
    2.41
    %
    
    
    
    
    
    
    
    
    
    
    2.38
    %Net Interest Margin (fully taxable equivalent)
    
    
    
    
    
    
    
    
    
    
    2.42
    %
    
    
    
    
    
    
    
    
    
    
    2.41
    %
 30




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##### Table of Contents



Six Months Ended June 30,2010
    
    
    2009Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid(In thousands)AssetsLoans
    
    $
    402,728
    
    
    
    11,857
    
    
    
    5.94
    %
    
    $
    428,378
    
    
    $
    12,913
    
    
    
    6.08
    %Securities
    
    
    60,833
    
    
    
    965
    
    
    
    3.17
    %
    
    
    84,819
    
    
    
    1,857
    
    
    
    4.38
    %Federal funds sold
    
    
    26,264
    
    
    
    56
    
    
    
    0.43
    %
    
    
    9,385
    
    
    
    13
    
    
    
    0.28
    %Total Earning Assets /
Total Interest Income /
Average Yield
    
    
    489,825
    
    
    
    12,878
    
    
    
    5.30
    %
    
    
    522,582
    
    
    
    14,783
    
    
    
    5.70
    %Cash and due from banks
    
    
    42,736
    
    
    
    
    
    
    
    
    
    
    
    11,536All other assets
    
    
    25,397
    
    
    
    
    
    
    
    
    
    
    
    26,277Total Assets
    
    $
    557,958
    
    
    
    
    
    
    
    
    
    
    $
    560,395Liabilities & Stockholders EquityNOW and money market accounts
    
    $
    41,624
    
    
    
    130
    
    
    
    0.63
    %
    
    $
    37,321
    
    
    
    151
    
    
    
    0.81
    %Savings deposits
    
    
    9,353
    
    
    
    25
    
    
    
    0.54
    %
    
    
    9,114
    
    
    
    30
    
    
    
    0.66
    %Time deposits
    
    
    320,633
    
    
    
    4,491
    
    
    
    2.82
    %
    
    
    275,257
    
    
    
    5,175
    
    
    
    3.79
    %FHLB advances and repurchase agreements
    
    
    100,486
    
    
    
    2,020
    
    
    
    4.05
    %
    
    
    142,242
    
    
    
    2,903
    
    
    
    4.12
    %Subordinated debentures
    
    
    8,078
    
    
    
    623
    
    
    
    6.71
    %
    
    
    12,129
    
    
    
    613
    
    
    
    6.71
    %Total Interest Bearing Liabilities/
Total Interest Expense / Average
Interest Rate Spread
    
    
    480,174
    
    
    
    7,289
    
    
    
    3.06
    %
    
    
    476,063
    
    
    
    8,872
    
    
    
    3.76
    %Noninterest bearing deposits
    
    
    55,050
    
    
    
    
    
    
    
    
    
    
    
    46,482All other liabilities
    
    
    3,518
    
    
    
    
    
    
    
    
    
    
    
    3,428Stockholders equity
    
    
    19,216
    
    
    
    
    
    
    
    
    
    
    
    34,422Total Liabilities & Equity
    
    $
    557,958
    
    
    
    
    
    
    
    
    
    
    $
    560,395Net Interest Income
    
    
    
    
    
    $
    5,589
    
    
    
    
    
    
    
    
    
    
    $
    5,911Net interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.24
    %
    
    
    
    
    
    
    
    
    
    
    1.94
    %Net Interest Margin (Net Interest Income /
Total Earning Assets)
    
    
    
    
    
    
    
    
    
    
    2.30
    %
    
    
    
    
    
    
    
    
    
    
    2.28
    %Net Interest Margin (fully taxable
equivalent)
    
    
    
    
    
    
    
    
    
    
    2.31
    %
    
    
    
    
    
    
    
    
    
    
    2.31
    %
 Provision for Loan Losses
  Noninterest Income
  31




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##### Table of Contents



Noninterest Expense
   Provision for Income Taxes
  32




---



##### Table of Contents



Asset/Liability Management
     33




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##### Table of Contents



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
    
    $
    51,530
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    51,530Securities, at amortized cost
    
    
    3,000
    
    
    
    10,470
    
    
    
    32,995
    
    
    
    2,430
    
    
    
    48,895FHLB stock
    
    
    
    
    
    
    5,877
    
    
    
    
    
    
    
    
    
    
    
    5,877Loans (including held for sale)
    
    
    109,127
    
    
    
    89,045
    
    
    
    166,954
    
    
    
    37,968
    
    
    
    403,094Total
    
    
    163,657
    
    
    
    105,392
    
    
    
    199,949
    
    
    
    40,398
    
    
    $
    509,396Interest bearing liabilitiesNOW and money market accounts
    
    
    20,880
    
    
    
    6,635
    
    
    
    12,084
    
    
    
    1,245
    
    
    
    40,844Savings deposits
    
    
    573
    
    
    
    2,482
    
    
    
    6,490
    
    
    
    
    
    
    
    9,545Jumbo time deposits
    
    
    38,425
    
    
    
    56,474
    
    
    
    120,522
    
    
    
    
    
    
    
    215,421Time deposits < $100,000
    
    
    12,198
    
    
    
    28,584
    
    
    
    59,653
    
    
    
    
    
    
    
    100,435Repurchase agreements
    
    
    15,958
    
    
    
    
    
    
    
    19,000
    
    
    
    
    
    
    
    34,958FHLB
    
    
    
    
    
    
    9,874
    
    
    
    17,767
    
    
    
    25,700
    
    
    
    53,341Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,557
    
    
    
    18,557Total
    
    
    88,034
    
    
    
    104,049
    
    
    
    235,516
    
    
    
    45,502
    
    
    $
    473,101Rate sensitivity gap
    
    $
    75,623
    
    
    $
    1,343
    
    
    $
    (35,567
    )
    
    $
    (5,104
    )Cumulative rate sensitivity gap
    
    
    
    
    
    $
    76,966
    
    
    $
    41,399
    
    
    $
    36,295Rate sensitivity gap ratio
    
    
    1.86
    x
    
    
    1.01
    x
    
    
    .85
    x
    
    
    .89
    xCumulative rate sensitivity gap ratio
    
    
    
    
    
    
    1.40
    x
    
    
    1.10
    x
    
    
    1.08
    x
  34




---



##### Table of Contents



Percentage ChangeInterest Rate Scenario
    
    In Net Interest IncomeInterest rates up 300 basis points
    
    1.35%Interest rates up 200 basis points
    
    2.02%Interest rates up 100 basis points
    
    1.55%Base Case
    
    Interest rates down 100 basis points
    
    (1.33%)Interest rates down 200 basis points
    
    (4.64%)Interest rates down 300 basis points
    
    (13.29%)
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T. Controls and Procedures
    35




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##### Table of Contents



PART II
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 See Item 1A. Risk Factors in our Form 10-K for a discussion of certain risks inherent in our
business. In addition, the following risk factors should also be considered.
 We are subject to additional requirements and restrictions on our operations as a result of the Banks undercapitalized status.
   We have deferred payment of interest on our subordinated debentures in connection with the issuance of our trust preferred securities and suspended dividend payments on our Series A and Series B
preferred stock.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3b. Defaults upon Senior Securities.
  
 Item 4. Reserved.
 
 Item 5. Other Information.
  36




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##### Table of Contents



Item 6. Exhibits.
 See Exhibit Index attached.
 
   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) 37




---



##### Table of Contents



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)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).10.7
    
    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).
 38




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##### Table of Contents



EXHIBITNUMBER
    
    EXHIBIT DESCRIPTION10.8
    
    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
 39