##### 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, 2009
 Commission File No. 000-33373
 COMMUNITY CENTRAL BANK CORPORATION
  Michigan
    
    38-3291744(State or other jurisdiction of incorporation
    
    (IRS Employer Identification No.)or organization)
 100 North Main Street, PO Box 7, Mount Clemens, MI 48046-0007
 (586) 783-4500
 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, 2009Common Stock
    
    3,737,181 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 3. Defaults upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 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 31,2009
    
    
    2008(Unaudited)(In thousands)AssetsCash and due from banks
    
    $
    33,986
    
    
    $
    9,162Federal funds sold
    
    
    994
    
    
    
    7,000Cash and Cash Equivalents
    
    
    34,980
    
    
    
    16,162Trading securities at fair value option
    
    
    
    
    
    
    17,463Securities available for sale, at fair value
    
    
    63,503
    
    
    
    76,552Securities held to maturity, at amortized cost
    
    
    3,744
    
    
    
    1,515FHLB stock
    
    
    5,877
    
    
    
    5,877Residential mortgage loans held for sale
    
    
    9,509
    
    
    
    3,302LoansCommercial real estate
    
    
    280,066
    
    
    
    284,811Commercial and industrial
    
    
    50,446
    
    
    
    38,714Residential real estate
    
    
    51,036
    
    
    
    54,409Home equity lines of credit
    
    
    22,483
    
    
    
    21,230Consumer loans
    
    
    7,291
    
    
    
    7,107Credit card loans
    
    
    733
    
    
    
    846Total Loans
    
    
    412,055
    
    
    
    407,117Allowance for credit losses
    
    
    (9,809
    )
    
    
    (7,315
    )Net Loans
    
    
    402,246
    
    
    
    399,802Net property and equipment
    
    
    9,093
    
    
    
    9,361Accrued interest receivable
    
    
    2,025
    
    
    
    2,479Other real estate
    
    
    4,896
    
    
    
    2,913Goodwill
    
    
    638
    
    
    
    638Intangible assets, net of amortization
    
    
    69
    
    
    
    80Cash surrender value of Bank Owned Life Insurance
    
    
    11,123
    
    
    
    10,975Other assets
    
    
    7,646
    
    
    
    9,831Total Assets
    
    $
    555,349
    
    
    $
    556,950
 (continued)
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##### Table of Contents



Consolidated Balance Sheet
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)(In thousands)LiabilitiesDepositsNoninterest bearing demand deposits
    
    $
    50,189
    
    
    $
    34,169NOW and money market accounts
    
    
    35,774
    
    
    
    38,154Savings deposits
    
    
    8,781
    
    
    
    8,585Time deposits
    
    
    274,809
    
    
    
    276,468Total Deposits
    
    
    369,553
    
    
    
    357,376Repurchase agreements
    
    
    40,420
    
    
    
    39,394Federal Home Loan Bank advances ($5.0 million at
fair value option at 12-31-2008)
    
    
    97,700
    
    
    
    108,200Accrued interest payable
    
    
    685
    
    
    
    1,050Other liabilities
    
    
    3,344
    
    
    
    3,779Subordinated debentures at fair value option
    
    
    11,155
    
    
    
    12,757Total Liabilities
    
    
    522,857
    
    
    
    522,556Stockholders EquityPreferred stock (7,000 shares authorized and 3,550 and 3,050
issued and outstanding at June 30, 2009 and December 31, 2008
respectively)
    
    
    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 June 30, 2009 and December 31, 2008,
respectively)
    
    
    32,165
    
    
    
    32,125Retained deficit
    
    
    (3,017
    )
    
    
    (516
    )Accumulated other comprehensive loss
    
    
    (206
    )
    
    
    (265
    )Total Stockholders Equity
    
    
    32,492
    
    
    
    34,394Total Liabilities and Stockholders Equity
    
    $
    555,349
    
    
    $
    556,950
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##### Table of Contents



Consolidated Statements of Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except per share data)Interest IncomeLoans (including fees)
    
    $
    6,653
    
    
    $
    6,373
    
    
    $
    12,913
    
    
    $
    12,864Taxable securities
    
    
    721
    
    
    
    942
    
    
    
    1,659
    
    
    
    1,768Tax exempt securities
    
    
    84
    
    
    
    147
    
    
    
    198
    
    
    
    376Federal funds sold
    
    
    7
    
    
    
    54
    
    
    
    13
    
    
    
    309Total Interest Income
    
    
    7,465
    
    
    
    7,516
    
    
    
    14,783
    
    
    
    15,317Interest ExpenseNOW and money market accounts
    
    
    66
    
    
    
    168
    
    
    
    151
    
    
    
    462Savings deposits
    
    
    13
    
    
    
    63
    
    
    
    30
    
    
    
    113Time deposits
    
    
    2,524
    
    
    
    2,734
    
    
    
    5,175
    
    
    
    5,770Repurchase agreements and fed funds purchased
    
    
    315
    
    
    
    289
    
    
    
    632
    
    
    
    520Federal Home Loan Bank advances
    
    
    1,133
    
    
    
    1,248
    
    
    
    2,271
    
    
    
    2,474ESOP loan interest expense
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Subordinated debentures
    
    
    311
    
    
    
    216
    
    
    
    613
    
    
    
    507Total interest expense
    
    
    4,362
    
    
    
    4,719
    
    
    
    8,872
    
    
    
    9,847Net Interest Income
    
    
    3,103
    
    
    
    2,797
    
    
    
    5,911
    
    
    
    5,470Provision for Credit Losses
    
    
    2,700
    
    
    
    884
    
    
    
    5,250
    
    
    
    2,984Net Interest Income after Provision for Credit Losses
    
    
    403
    
    
    
    1,913
    
    
    
    661
    
    
    
    2,486Noninterest IncomeFiduciary income
    
    
    82
    
    
    
    98
    
    
    
    165
    
    
    
    206Deposit service charges
    
    
    95
    
    
    
    142
    
    
    
    190
    
    
    
    274Net realized security gain
    
    
    228
    
    
    
    49
    
    
    
    356
    
    
    
    110Change in fair value of assets/liabilities carried at
fair value under SFAS 159
    
    
    838
    
    
    
    872
    
    
    
    1,070
    
    
    
    3,011Mortgage banking income
    
    
    1,290
    
    
    
    430
    
    
    
    1,761
    
    
    
    880Other income
    
    
    259
    
    
    
    568
    
    
    
    464
    
    
    
    878Total noninterest income
    
    
    2,792
    
    
    
    2,159
    
    
    
    4,006
    
    
    
    5,359Noninterest ExpenseSalaries, benefits and payroll taxes
    
    
    2,249
    
    
    
    1,835
    
    
    
    4,181
    
    
    
    3,667Net occupancy expense
    
    
    417
    
    
    
    452
    
    
    
    880
    
    
    
    913Other operating expense
    
    
    1,790
    
    
    
    1,471
    
    
    
    3,269
    
    
    
    2,735Total noninterest expense
    
    
    4,456
    
    
    
    3,758
    
    
    
    8,330
    
    
    
    7,315Income (Loss) Before Taxes
    
    
    (1,261
    )
    
    
    314
    
    
    
    (3,663
    )
    
    
    530Provision for Income Tax (Benefit) Expense
    
    
    (459
    )
    
    
    39
    
    
    
    (1,317
    )
    
    
    15Net income (loss)
    
    $
    (802
    )
    
    $
    275
    
    
    $
    (2,346
    )
    
    $
    515Dividends declared on preferred shares
    
    
    106
    
    
    
    
    
    
    
    156
    
    
    
    Net income (loss) available on common shares
    
    $
    (908
    )
    
    $
    275
    
    
    $
    (2,502
    )
    
    $
    515Per share data:Basic earnings (loss)
    
    $
    (0.24
    )
    
    $
    0.07
    
    
    $
    (0.67
    )
    
    $
    0.14Diluted earnings (loss)
    
    $
    (0.24
    )
    
    $
    0.07
    
    
    $
    (0.67
    )
    
    $
    0.14Cash dividends
    
    $
    
    
    
    $
    0.02
    
    
    $
    
    
    
    $
    0.08
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Consolidated Statements of Comprehensive Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Net Income (Loss) as Reported
    
    $
    (802
    )
    
    $
    275
    
    
    $
    (2,346
    )
    
    $
    515Other Comprehensive Income, Net of TaxChange in unrealized net gain on securities
available for sale
    
    
    (132
    )
    
    
    (868
    )
    
    
    59
    
    
    
    (320
    )Comprehensive Income (Loss)
    
    $
    (934
    )
    
    $
    (593
    )
    
    $
    (2,287
    )
    
    $
    195
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Consolidated Statements of Cash Flow
 Six Months Ended June 30,2009
    
    
    2008(In thousands)Operating ActivitiesNet income (loss)
    
    $
    (2,346
    )
    
    $
    515Adjustments to reconcile net income to net cash flow from operating activities:Net amortization of security premium
    
    
    166
    
    
    
    51Net gain on available for sale securities
    
    
    (356
    )
    
    
    (110
    )Net gain on instruments at fair value
    
    
    (1,070
    )
    
    
    (3,011
    )Provision for credit losses
    
    
    5,250
    
    
    
    2,984Depreciation expense
    
    
    323
    
    
    
    336Deferred income tax (benefit) expense
    
    
    (1,317
    )
    
    
    15ESOP compensation expense
    
    
    
    
    
    
    25SFAS 123R option expense
    
    
    40
    
    
    
    28Decrease in accrued interest receivable
    
    
    454
    
    
    
    278(Increase) decrease in other assets
    
    
    2,596
    
    
    
    (1,488
    )Decrease in accrued interest payable
    
    
    (365
    )
    
    
    (39
    )Increase (decrease) in other liabilities
    
    
    (435
    )
    
    
    389(Increase) decrease in loans sold held for sale
    
    
    (6,208
    )
    
    
    2,918Increase in other real estate
    
    
    (1,983
    )
    
    
    (1,171
    )Net Cash (Used in) Provided By Operating Activities
    
    
    (5,251
    )
    
    
    1,720Investing ActivitiesSales, maturities, calls and prepayments of securities available for sale
    
    
    69,638
    
    
    
    47,607Purchases of securities available for sale
    
    
    (56,386
    )
    
    
    (52,612
    )Maturities, calls, sales and prepayments of trading securities
    
    
    24,700
    
    
    
    Transfer and purchase of trading securities
    
    
    (7,237
    )
    
    
    Maturities, calls, and prepayments of held to maturity securities
    
    
    143
    
    
    
    2,602Purchases of held to maturity securities
    
    
    (2,088
    )
    
    
    (1,265
    )Increase in loans
    
    
    (7,693
    )
    
    
    (6,671
    )Purchases of property and equipment
    
    
    (55
    )
    
    
    (842
    )Net Cash Provided by (Used in) Investing Activities
    
    
    21,022
    
    
    
    (11,181
    )Financing ActivitiesNet increase in demand and savings deposits
    
    
    13,836
    
    
    
    9,980Net decrease in time deposits
    
    
    (1,659
    )
    
    
    (8,499
    )Net increase in short term borrowings
    
    
    1,026
    
    
    
    270FHLB advance repayments
    
    
    (10,500
    )
    
    
    13,000Payment of ESOP debt
    
    
    
    
    
    
    (25
    )Stock options exercise / award
    
    
    
    
    
    
    14Preferred Stock Issuance
    
    
    500
    
    
    
    Preferred Stock dividend paid
    
    
    (156
    )
    
    
    Cash dividends paid
    
    
    
    
    
    
    (284
    )Repurchase of stock
    
    
    
    
    
    
    (7
    )Net Cash Provided by Financing Activities
    
    
    3,047
    
    
    
    14,449Increase in Cash and Cash Equivalents
    
    
    18,818
    
    
    
    4,988Cash and Cash Equivalents at the Beginning of the Period
    
    
    16,162
    
    
    
    9,183Cash and Cash Equivalents at the End of the Period
    
    $
    34,980
    
    
    $
    14,171Supplemental Disclosure of Cash Flow InformationInterest paid
    
    $
    9,237
    
    
    $
    9,886Loans transferred to other real estate owned
    
    $
    2,650
    
    
    $
    1,242
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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 June 30, 2009 and December
31, 2008, and Consolidated Statements of Income and Comprehensive Income for the six month
periods ended June 30, 2009 and 2008, and Consolidated Statements of Cash Flow for the six
months ended June 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 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 FSP 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 (this is, not a forced liquidation or
distressed sale) between market participants. The FSP 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
FSP also requires increased disclosures. This FSP 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 FSP did not
have a material effect on the Companys results of operations or financial position.
 In April 2009, the FASB issued Staff Position (FSP) No. 107-1 and APB 28-1, Interim Disclosures
about Fair Value of Financial Instruments. This FSP 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 FSP 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 FSP 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 SFAS No. 165, Subsequent Events. SFAS 165 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 SFAS 165, 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.
 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
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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.
 2.
    
    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. 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.
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Three Months Ended
    
    Six Months EndedJune 30,
    

    June 30,2009
    
    2008
    
    2009
    
    2008(In thousands)
    
    (In thousands)Stock-based employee compensation expense,
net of related tax effects, included in reported
net income
    
    $
    21
    
    
    $
    14
    
    
    $
    40
    
    
    $
    28
 Fair Value
 Determining
Fair Value When the Volume and Level of Activity for the Asset and Liability Have Significantly
Decreased and Identified Transactions That Are Not Orderly
  Fair Value Hierarchy
      9




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Fair Value Measurement at
    
    
    
    
    
    
    Changes in fair value for six monthsJune 30, 2009
    
    
    
    
    
    
    ended June 30, 2009 measured at fairSignificant Other
    
    
    Significant
    
    
    value pursuant to election of the fairFair Value
    
    
    Observable
    
    
    Unobservable
    
    
    value optionMeasurements
    
    
    Inputs
    
    
    Inputs
    
    
    Other Gains or Losses in  pretaxDescription
    
    6/30/2009
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    income(In thousands)AssetsTrading securities (a)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (150
    )Securities available for sale
    
    
    63,503
    
    
    
    63,503
    
    
    
    
    
    
    
    Interest rate swap hedging securities (a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )LiabilitiesSubordinated debentures
    
    
    11,155
    
    
    
    
    
    
    
    11,155
    
    
    
    1,620Interest rate swap hedging subordinated
debentures (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (325
    )$
    1,070
 
 (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. Fair Value Measurement at
    
    
    
    
    
    
    Changes in fair value for twelveDecember 31, 2008
    
    
    
    
    
    
    months ended December 31, 2008Significant Other
    
    
    Significant
    
    
    measured at fair value pursuant toFair Value
    
    
    Observable
    
    
    Unobservable
    
    
    election of the fair value optionMeasurements
    
    
    Inputs
    
    
    Inputs
    
    
    Other Gains or Losses in  pretaxDescription
    
    12/31/08
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    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




---



##### Table of Contents



Changes in level 3 recurring fair value measurements
  
 Changes in unrealized gainsand (losses) related toTotal realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    financial instruments for theFor the three months
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    three months ended held atended June 30, 2009
    
    April 1, 2009
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    June 30, 2009
    
    June 30, 2009(In thousands)Subordinated
Debentures
    
    $
    12,022
    
    
    $
    867
    
    
    $
    
    
    
    $
    
    
    
    $
    11,155
    
    
    $
    867
 Changes in unrealized gainsand (losses) related toTotal realized /
    
    Purchases,
    
    Transfers
    
    
    
    
    
    financial instruments for theFor the six months
    
    Fair Value
    
    unrealized
    
    issuances
    
    in and / or
    
    Fair Value
    
    six months ended held atended June 30, 2009
    
    January 1, 2009
    
    gains / losses
    
    settlements, net
    
    out of Level 3
    
    June 30, 2009
    
    June 30, 2009(In thousands)Subordinated
Debentures
    
    $
    12,757
    
    
    $
    1,602
    
    
    $
    
    
    
    $
    
    
    
    $
    11,155
    
    
    $
    1,602
 13




---



##### Table of Contents



Assets Measured at Fair Value on a Nonrecurring Basis
 Residential Mortgages Held for Sale
  Impaired Loans
  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 theSix months endedJune 30, 2009June 30, 2009Residential mortgages held for sale
    
    $
    9,509
    
    
    $
    
    
    
    $
    
    
    
    $
    9,509
    
    
    $
    Impaired loans accounted for under FAS 114
    
    $
    30,283
    
    
    $
    
    
    
    $
    
    
    
    $
    30,283
    
    
    $
    3,282Other real estate owned
    
    $
    4,896
    
    
    $
    
    
    
    $
    
    
    
    $
    4,896
    
    
    $
    436Total 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




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##### Table of Contents



June 30, 2009
    
    December 31, 2008Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair Value(In thousands)Financial AssetsCash and cash equivalents
    
    $
    34,980
    
    
    $
    34,980
    
    
    $
    16,162
    
    
    $
    16,162Trading securities (a)
    
    
    
    
    
    
    
    
    
    
    17,463
    
    
    
    17,463Securities
    
    
    67,247
    
    
    
    67,134
    
    
    
    78,067
    
    
    
    78,046FHLB stock
    
    
    5,877
    
    
    
    5,877
    
    
    
    5,877
    
    
    
    5,877Residential mortgages held for sale
    
    
    9,509
    
    
    
    9,509
    
    
    
    3,302
    
    
    
    3,302Loans, net of allowance
    
    
    402,246
    
    
    
    414,226
    
    
    
    399,802
    
    
    
    416,903Accrued interest receivable
    
    
    2,025
    
    
    
    2,025
    
    
    
    2,479
    
    
    
    2,479Interest Rate Swap
    
    
    
    
    
    
    
    
    
    
    3,538
    
    
    
    3,538Financial LiabilitiesDemand and savings deposits
    
    
    94,744
    
    
    
    94,744
    
    
    
    80,908
    
    
    
    80,908Time deposits
    
    
    274,809
    
    
    
    280,986
    
    
    
    276,468
    
    
    
    286,145Repurchase agreements
    
    
    40,420
    
    
    
    40,426
    
    
    
    39,394
    
    
    
    39,394Federal Home Loan Bank advances
    
    
    97,700
    
    
    
    98,535
    
    
    
    108,200
    
    
    
    111,738Accrued interest payable
    
    
    685
    
    
    
    685
    
    
    
    1,050
    
    
    
    1,050Subordinated debentures (a)
    
    
    11,155
    
    
    
    11,155
    
    
    
    12,757
    
    
    
    12,757Interest Rate Swap
    
    
    
    
    
    
    
    
    
    
    958
    
    
    
    958
 
 (a)
    
    Carried at fair value under SFAS 159, 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




---



##### Table of Contents



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




---



##### Table of Contents



EXECUTIVE SUMMARY
     17




---



##### Table of Contents



Assets
   18




---



##### Table of Contents



June 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
    
    $
    9,509
    
    
    
    
    
    
    $
    3,302
    
    
    
    
    
    
    $
    6,207
    
    
    
    188.0
    %Loans held in the portfolio:Commercial real estate
    
    $
    280,066
    
    
    
    68.0
    %
    
    $
    284,811
    
    
    
    70.0
    %
    
    $
    (4,745
    )
    
    
    (1.7
    %)Commercial and industrial
    
    
    50,446
    
    
    
    12.2
    %
    
    
    38,714
    
    
    
    9.5
    %
    
    
    11,732
    
    
    
    30.3
    %Residential real estate
    
    
    51,036
    
    
    
    12.4
    %
    
    
    54,409
    
    
    
    13.4
    %
    
    
    (3,373
    )
    
    
    (6.2
    %)Home equity lines
    
    
    22,483
    
    
    
    5.5
    %
    
    
    21,230
    
    
    
    5.2
    %
    
    
    1,253
    
    
    
    5.9
    %Consumer loans
    
    
    7,291
    
    
    
    1.8
    %
    
    
    7,107
    
    
    
    1.7
    %
    
    
    184
    
    
    
    2.6
    %Credit cards
    
    
    733
    
    
    
    0.1
    %
    
    
    846
    
    
    
    0.2
    %
    
    
    (113
    )
    
    
    (13.4
    %)Total loans
    
    $
    412,055
    
    
    
    100.0
    %
    
    $
    407,117
    
    
    
    100.0
    %
    
    $
    4,938
    
    
    
    1.2
    %
     19




---



##### Table of Contents



June 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Nonaccrual loans:Commercial real estate
    
    $
    25,478
    
    
    $
    12,579Commercial and industrial
    
    
    863
    
    
    
    96Residential real estate
    
    
    4,705
    
    
    
    3,578Home equity lines
    
    
    891
    
    
    
    760Consumer loans
    
    
    414
    
    
    
    571Credit cards
    
    
    
    
    
    
    Total
    
    
    32,351
    
    
    
    17,584Accruing loans delinquent more than 90 days:Commercial real estate
    
    $
    
    
    
    $
    Commercial and industrial
    
    
    
    
    
    
    Residential real estate
    
    
    
    
    
    
    Home equity lines
    
    
    
    
    
    
    Consumer loans
    
    
    
    
    
    
    Credit cards
    
    
    4
    
    
    
    44Total
    
    
    4
    
    
    
    44Total nonperforming loans
    
    $
    32,355
    
    
    $
    17,628Troubled debt restructured loans:Commercial real estate
    
    $
    8,695
    
    
    $
    6,078Commercial and industrial
    
    
    145
    
    
    
    1,589Residential reat estate
    
    
    1,323
    
    
    
    495Total
    
    
    10,163
    
    
    
    8,162Other real estate owned:Commercial real estate
    
    
    4,266
    
    
    
    2,493Residential real estate
    
    
    630
    
    
    
    420Total
    
    
    4,896
    
    
    
    2,913Other repossessed assets  boats
    
    
    541
    
    
    
    976Total nonperforming loans to total loans
    
    
    7.85
    %
    
    
    4.33
    %Allowance for loan losses to nonperforming loans
    
    
    30.32
    %
    
    
    5.33
    %
  20




---



##### Table of Contents



Six Months Ended
    
    
    Year EndedJune 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Balance at beginning of the period
    
    $
    7,315
    
    
    $
    6,403Charge-offs:Commercial real estate
    
    
    1,552
    
    
    
    6,895Commercial and industrial
    
    
    939
    
    
    
    270Residential real estate
    
    
    265
    
    
    
    426Home equity lines
    
    
    
    
    
    
    577Consumer loans
    
    
    68
    
    
    
    669Credit cards
    
    
    11
    
    
    
    33Total charge-offs
    
    
    2,835
    
    
    
    8,870Recoveries:Commercial real estate
    
    
    5
    
    
    
    52Commercial and industrial
    
    
    16
    
    
    
    218Residential real estate
    
    
    23
    
    
    
    Home equity lines
    
    
    2
    
    
    
    1Consumer loans
    
    
    33
    
    
    
    7Credit cards
    
    
    
    
    
    
    2Total recoveries
    
    
    79
    
    
    
    280Net charge-offs (recoveries)
    
    
    2,756
    
    
    
    8,590Provision charged to earnings
    
    
    5,250
    
    
    
    9,502Balance at the end of the period
    
    $
    9,809
    
    
    $
    7,315As a percentage of total portfolio loans
    
    
    2.38
    %
    
    
    1.80
    %Ratio of net charge-offs during the
period to average loans during
the period
    
    
    1.39
    %
    
    
    2.17
    %
   21




---



##### Table of Contents



Liabilities
   Percentage
    
    
    
    
    
    
    PercentageJune 30,
    
    
    of total
    
    
    December 31,
    
    
    of total
    
    
    Net
    
    
    Net2009
    
    
    deposits
    
    
    2008
    
    
    deposits
    
    
    Change
    
    
    Change %(In thousands, except percentages)Noninterest bearing demand
    
    $
    50,189
    
    
    
    13.6
    %
    
    $
    34,169
    
    
    
    9.6
    %
    
    $
    16,020
    
    
    
    46.9
    %NOW accounts
    
    
    14,344
    
    
    
    3.9
    %
    
    
    13,670
    
    
    
    3.8
    %
    
    
    674
    
    
    
    4.9
    %Money market accounts
    
    
    21,430
    
    
    
    5.8
    %
    
    
    24,484
    
    
    
    6.9
    %
    
    
    (3,054
    )
    
    
    (12.5
    %)Savings deposits
    
    
    8,781
    
    
    
    2.4
    %
    
    
    8,585
    
    
    
    2.4
    %
    
    
    196
    
    
    
    2.3
    %Time deposits under $100,000
    
    
    51,527
    
    
    
    13.9
    %
    
    
    43,685
    
    
    
    12.2
    %
    
    
    7,842
    
    
    
    18.0
    %Time deposits $100,000 and over
    
    
    223,282
    
    
    
    60.4
    %
    
    
    232,783
    
    
    
    65.1
    %
    
    
    (9,501
    )
    
    
    (4.1
    %)Total deposits
    
    $
    369,553
    
    
    
    100.0
    %
    
    $
    357,376
    
    
    
    100.0
    %
    
    $
    12,177
    
    
    
    3.4
    %
 22




---



##### Table of Contents



June 30,
    
    December 31,2009
    
    2008(Dollars in thousands)Amount outstanding at end of periodShort-term repurchase agreements
    
    $
    21,420
    
    
    $
    20,394Short-term FHLB advances
    
    $
    36,000
    
    
    $
    25,500Weighted average interest rate on ending balanceShort-term repurchase agreements
    
    
    1.76
    %
    
    
    1.62
    %Short-term FHLB advances
    
    
    3.91
    %
    
    
    3.50
    %Maximum amount outstanding at any month end
during the yearShort-term repurchase agreements
    
    $
    21,420
    
    
    $
    20,394Short-term FHLB advances
    
    $
    37,000
    
    
    $
    25,500Average amount outstanding during the yearShort-term repurchase agreements
    
    $
    19,136
    
    
    $
    13,589Short-term FHLB advances
    
    $
    36,500
    
    
    $
    17,484Weighted average interest rateShort-term repurchase agreements
    
    
    0.83
    %
    
    
    1.97
    %Short-term FHLB advances
    
    
    3.91
    %
    
    
    4.05
    %
    Fair Value
    
    
    Average rateat end of period
    
    
    at end of period(In thousands, except percentages)Short-term FHLB advances
    
    $
    36,000
    
    
    
    3.91
    %Long-term FHLB advances
    
    $
    61,700
    
    
    
    4.71
    %$
    97,700
    
    
    
    4.41
    %
 23




---



##### Table of Contents



Liquidity and Capital Resources
   June 30,
    
    December 31,2009
    
    2008
    
    Minimum Ratio
    
    Ratiofor Capital
    
    to beCapital
    
    Ratio
    
    Capital
    
    Ratio
    
    Adequacy Purposes
    
    Well Capitalized(In thousands, except percentages)Tier I capital to risk-weighted assetsConsolidated
    
    $
    40,280
    
    
    
    9.70
    %
    
    $
    45,054
    
    
    
    10.41
    %
    
    
    4
    %
    
    NABank only
    
    
    40,498
    
    
    
    9.73
    %
    
    
    39,928
    
    
    
    9.28
    %
    
    
    4
    %
    
    
    6
    %Total capital to risk-weighted assetsConsolidated
    
    $
    53,457
    
    
    
    12.88
    %
    
    $
    57,199
    
    
    
    13.22
    %
    
    
    8
    %
    
    NABank only
    
    
    45,789
    
    
    
    10.99
    %
    
    
    45,338
    
    
    
    10.54
    %
    
    
    8
    %
    
    
    10
    %Tier I capital to average assetsConsolidated
    
    $
    40,280
    
    
    
    7.21
    %
    
    $
    45,054
    
    
    
    8.21
    %
    
    
    4
    %
    
    NABank only
    
    
    40,498
    
    
    
    7.26
    %
    
    
    39,928
    
    
    
    7.30
    %
    
    
    4
    %
    
    
    5
    %
  24




---



##### Table of Contents



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
    
    
    
    
    
    
    
    
    
    
    (155
    )
    
    
    
    
    
    
    (155
    )SFAS 123R expensing of options
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    40Net loss
    
    
    
    
    
    
    
    
    
    
    (2,346
    )
    
    
    
    
    
    
    (2,346
    )Change in unrealized gain/loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    59Ending balance, June 30, 2009
    
    $
    3,550
    
    
    $
    32,165
    
    
    $
    (3,017
    )
    
    $
    (206
    )
    
    $
    32,492
   Net Interest Income
  25




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30, 2009 vs. 2008
    
    
    June 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
    
    $
    (47
    )
    
    $
    1
    
    
    $
    (48
    )
    
    $
    (296
    )
    
    $
    (17
    )
    
    $
    (279
    )Securities, including trading
    
    
    (284
    )
    
    
    (232
    )
    
    
    (52
    )
    
    
    (287
    )
    
    
    (131
    )
    
    
    (156
    )Federal funds sold
    
    
    280
    
    
    
    593
    
    
    
    (313
    )
    
    
    49
    
    
    
    990
    
    
    
    (941
    )Total
    
    
    (51
    )
    
    
    362
    
    
    
    (413
    )
    
    
    (534
    )
    
    
    842
    
    
    
    (1,376
    )Deposits and Borrowed Funds  Interest Expense:NOW and money market accounts
    
    
    (102
    )
    
    
    (19
    )
    
    
    (83
    )
    
    
    (313
    )
    
    
    (56
    )
    
    
    (257
    )Savings deposits
    
    
    (50
    )
    
    
    (8
    )
    
    
    (42
    )
    
    
    (83
    )
    
    
    (12
    )
    
    
    (71
    )Time deposits
    
    
    (210
    )
    
    
    319
    
    
    
    (529
    )
    
    
    (594
    )
    
    
    507
    
    
    
    (1,101
    )FHLB advances and
repurchase agreements
    
    
    (90
    )
    
    
    (25
    )
    
    
    (65
    )
    
    
    (91
    )
    
    
    31
    
    
    
    (122
    )Subordinated debentures
    
    
    95
    
    
    
    (171
    )
    
    
    266
    
    
    
    106
    
    
    
    (327
    )
    
    
    433Total
    
    
    (357
    )
    
    
    96
    
    
    
    (453
    )
    
    
    (975
    )
    
    
    143
    
    
    
    (1,118
    )Net Interest Income
    
    $
    306
    
    
    $
    266
    
    
    $
    40
    
    
    $
    441
    
    
    $
    699
    
    
    $
    (258
    )
    26




---



##### Table of Contents



27




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##### Table of Contents



Average Balance Sheet
  Three Months Ended June 30,2009
    
    
    2008Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid(In thousands)AssetsLoans
    
    $
    434,415
    
    
    
    6,653
    
    
    
    6.14
    %
    
    $
    396,698
    
    
    $
    6,373
    
    
    
    6.46
    %Securities
    
    
    76,304
    
    
    
    805
    
    
    
    4.22
    %
    
    
    98,381
    
    
    
    1,089
    
    
    
    4.43
    %Federal funds sold
    
    
    11,721
    
    
    
    7
    
    
    
    0.24
    %
    
    
    10,220
    
    
    
    54
    
    
    
    2.13
    %Total Earning Assets /Total Interest Income /Average Yield
    
    
    522,440
    
    
    
    7,465
    
    
    
    5.73
    %
    
    
    505,299
    
    
    
    7,516
    
    
    
    5.98
    %Cash and due from banks
    
    
    11,231
    
    
    
    
    
    
    
    
    
    
    
    8,281All other assets
    
    
    26,744
    
    
    
    
    
    
    
    
    
    
    
    24,462Total Assets
    
    $
    560,415
    
    
    
    
    
    
    
    
    
    
    $
    538,042Liabilities & Stockholders EquityNOW and money market accounts
    
    $
    36,671
    
    
    
    66
    
    
    
    0.72
    %
    
    $
    47,364
    
    
    
    168
    
    
    
    1.43
    %Savings deposits
    
    
    8,688
    
    
    
    13
    
    
    
    0.60
    %
    
    
    14,282
    
    
    
    63
    
    
    
    1.77
    %Time deposits
    
    
    275,207
    
    
    
    2,524
    
    
    
    3.68
    %
    
    
    241,273
    
    
    
    2,734
    
    
    
    4.56
    %FHLB advances and repurchase agreements
    
    
    140,355
    
    
    
    1,448
    
    
    
    4.14
    %
    
    
    143,045
    
    
    
    1,538
    
    
    
    4.32
    %ESOP Loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    0
    
    
    
    6.00
    %Subordinated debentures
    
    
    11,945
    
    
    
    311
    
    
    
    10.44
    %
    
    
    18,557
    
    
    
    216
    
    
    
    4.68
    %Total Interest Bearing Liabilities/Total Interest Expense / AverageInterest Rate Spread
    
    
    472,866
    
    
    
    4,362
    
    
    
    3.70
    %
    
    
    464,540
    
    
    
    4,719
    
    
    
    4.09
    %Noninterest bearing deposits
    
    
    50,282
    
    
    
    
    
    
    
    
    
    
    
    38,112All other liabilities
    
    
    3,401
    
    
    
    
    
    
    
    
    
    
    
    1,451Stockholders equity
    
    
    33,866
    
    
    
    
    
    
    
    
    
    
    
    33,939Total Liabilities & Equity
    
    $
    560,415
    
    
    
    
    
    
    
    
    
    
    $
    538,042Net Interest Income
    
    
    
    
    
    $
    3,103
    
    
    
    
    
    
    
    
    
    
    $
    2,797Net interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.03
    %
    
    
    
    
    
    
    
    
    
    
    1.89
    %Net Interest Margin (Net Interest Income / Total Earning Assets)
    
    
    
    
    
    
    
    
    
    
    2.38
    %
    
    
    
    
    
    
    
    
    
    
    2.22
    %Net Interest Margin (fully taxable equivalent)
    
    
    
    
    
    
    
    
    
    
    2.41
    %
    
    
    
    
    
    
    
    
    
    
    2.28
    %
 28




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##### Table of Contents



Six Months Ended June 30,2009
    
    
    2008Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid(In thousands)AssetsLoans
    
    $
    428,378
    
    
    
    12,913
    
    
    
    6.08
    %
    
    $
    394,338
    
    
    $
    12,864
    
    
    
    6.56
    %Securities
    
    
    84,819
    
    
    
    1,857
    
    
    
    4.38
    %
    
    
    93,948
    
    
    
    2,144
    
    
    
    4.56
    %Federal funds sold
    
    
    9,385
    
    
    
    13
    
    
    
    0.28
    %
    
    
    21,040
    
    
    
    309
    
    
    
    2.95
    %Total Earning Assets /Total Interest Income /Average Yield
    
    
    522,582
    
    
    
    14,783
    
    
    
    5.70
    %
    
    
    509,326
    
    
    
    15,317
    
    
    
    6.04
    %Cash and due from banks
    
    
    11,536
    
    
    
    
    
    
    
    
    
    
    
    8,309All other assets
    
    
    26,277
    
    
    
    
    
    
    
    
    
    
    
    24,187Total Assets
    
    $
    560,395
    
    
    
    
    
    
    
    
    
    
    $
    541,822Liabilities & Stockholders EquityNOW and money market accounts
    
    $
    37,321
    
    
    
    151
    
    
    
    0.81
    %
    
    $
    50,743
    
    
    
    462
    
    
    
    1.83
    %Savings deposits
    
    
    9,114
    
    
    
    30
    
    
    
    0.66
    %
    
    
    12,652
    
    
    
    113
    
    
    
    1.80
    %Time deposits
    
    
    275,257
    
    
    
    5,175
    
    
    
    3.79
    %
    
    
    247,170
    
    
    
    5,770
    
    
    
    4.69
    %FHLB advances and repurchase agreements
    
    
    142,242
    
    
    
    2,903
    
    
    
    4.12
    %
    
    
    140,444
    
    
    
    2,994
    
    
    
    4.29
    %ESOP Loan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    1
    
    
    
    8.04
    %Subordinated debentures
    
    
    12,129
    
    
    
    613
    
    
    
    6.71
    %
    
    
    18,557
    
    
    
    507
    
    
    
    5.49
    %Total Interest Bearing Liabilities/Total Interest Expense / AverageInterest Rate Spread
    
    
    476,063
    
    
    
    8,872
    
    
    
    3.76
    %
    
    
    469,591
    
    
    
    9,847
    
    
    
    4.22
    %Noninterest bearing deposits
    
    
    46,482
    
    
    
    
    
    
    
    
    
    
    
    36,142All other liabilities
    
    
    3,428
    
    
    
    
    
    
    
    
    
    
    
    2,268Stockholders equity
    
    
    34,422
    
    
    
    
    
    
    
    
    
    
    
    33,821Total Liabilities & Equity
    
    $
    560,395
    
    
    
    
    
    
    
    
    
    
    $
    541,822Net Interest Income
    
    
    
    
    
    $
    5,911
    
    
    
    
    
    
    
    
    
    
    $
    5,470Net interest rate spread
    
    
    
    
    
    
    
    
    
    
    1.94
    %
    
    
    
    
    
    
    
    
    
    
    1.83
    %Net Interest Margin (Net Interest Income / Total Earning Assets)
    
    
    
    
    
    
    
    
    
    
    2.28
    %
    
    
    
    
    
    
    
    
    
    
    2.16
    %Net Interest Margin (fully taxable equivalent)
    
    
    
    
    
    
    
    
    
    
    2.31
    %
    
    
    
    
    
    
    
    
    
    
    2.23
    %
 Provision for Loan Losses
  29




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Noninterest Income
  Noninterest Expense
   Provision for Income Taxes
  30




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##### Table of Contents



Asset/Liability Management
     31




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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
    
    $
    994
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    994Securities, at amortized cost
    
    
    5,467
    
    
    
    13,497
    
    
    
    26,741
    
    
    
    21,853
    
    
    
    67,558FHLB stock
    
    
    
    
    
    
    5,877
    
    
    
    
    
    
    
    
    
    
    
    5,877Loans (including held for sale)
    
    
    117,826
    
    
    
    97,021
    
    
    
    171,604
    
    
    
    35,113
    
    
    
    421,564Total
    
    
    124,287
    
    
    
    116,395
    
    
    
    198,345
    
    
    
    56,966
    
    
    $
    495,993Interest bearing liabilitiesNOW and money market accounts
    
    
    18,005
    
    
    
    5,872
    
    
    
    10,825
    
    
    
    1,072
    
    
    
    35,774Savings deposits
    
    
    527
    
    
    
    2,283
    
    
    
    5,971
    
    
    
    
    
    
    
    8,781Jumbo time deposits
    
    
    45,003
    
    
    
    113,180
    
    
    
    65,099
    
    
    
    
    
    
    
    223,282Time deposits < $100,000
    
    
    7,302
    
    
    
    15,990
    
    
    
    28,235
    
    
    
    
    
    
    
    51,527Repurchase agreements
    
    
    21,420
    
    
    
    
    
    
    
    19,000
    
    
    
    
    
    
    
    40,420FHLB
    
    
    6,000
    
    
    
    30,000
    
    
    
    35,500
    
    
    
    26,200
    
    
    
    97,700Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,557
    
    
    
    18,557Total
    
    
    98,257
    
    
    
    167,325
    
    
    
    164,630
    
    
    
    45,829
    
    
    $
    476,041Rate sensitivity gap
    
    $
    26,030
    
    
    $
    (50,930
    )
    
    $
    33,715
    
    
    $
    11,137Cumulative rate sensitivity gap
    
    
    
    
    
    $
    (24,900
    )
    
    $
    8,815
    
    
    $
    19,952Rate sensitivity gap ratio
    
    
    1.26
    x
    
    
    0.70
    x
    
    
    1.20
    x
    
    
    1.24
    xCumulative rate sensitivity gap ratio
    
    
    
    
    
    
    .91
    x
    
    
    1.02
    x
    
    
    1.04
    x
  32




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##### Table of Contents



Percentage ChangeInterest Rate Scenario
    
    In Net Interest IncomeInterest rates up 300 basis points
    
    
    -4.2
    %Interest rates up 200 basis points
    
    
    -1.8
    %Interest rates up 100 basis points
    
    
    -0.6
    %Base Case
    
    
    Interest rates down 100 basis points
    
    
    3.6
    %Interest rates down 200 basis points
    
    
    7.8
    %Interest rates down 300 basis points
    
    
    -2.3
    %
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T. Controls and Procedures
    33




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##### Table of Contents



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.
   34




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##### Table of Contents



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.
  35




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##### Table of Contents



Our consumer loans generally have a higher risk of default than our other loans .
  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.
  36




---



##### Table of Contents



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.
 37




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##### Table of Contents



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.
  38




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##### Table of Contents



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.
  39




---



##### Table of Contents



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.
   Nominee
    
    Votes For
    
    Votes Withheld
    
    TotalCelestina Giles
    
    
    3,321,999
    
    
    
    115,199
    
    
    
    3,734,781David A. Widlak
    
    
    3,323,675
    
    
    
    113,523
    
    
    
    3,734,781
 40




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##### Table of Contents



Item 5. Other Information.
  
 Item 6. Exhibits.
  
   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)
 41




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##### 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)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).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)
 42




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##### Table of Contents



EXHIBITNUMBER
    
    EXHIBIT DESCRIPTION31.2
    
    
    Rule 13a  14(a) Certification (Chief Financial Officer)32
    
    
    Rule 1350 Certifications
 43