Community Shores Reports Net Loss
MUSKEGON — Community Shores Bank Corp. reported a net loss of $723,000, or 49 cents per diluted share, for fiscal 2007, compared with net income of $1.3 million, or 89 cents per diluted share for fiscal 2006.
For the fourth quarter, the company reported a net loss of $866,000, or 59 cents per diluted share, versus net income of $247,000, or 17 cents per share, in the prior year’s fourth quarter. According to Community Shores, year-end and quarter-end 2007 earnings reflect a higher level of loan loss reserve resulting form an increased level of nonperforming assets, a lower net interest margin and higher expenses related to branch expansion activities, compared to the same prior year periods.
Nonperforming assets were $6.6 million, or 2.41 percent of total assets as of Dec. 31, which compares with $1.6 million, or 0.65 percent of assets, for the year-ago period and $4 million, or 1.48 percent of assets for the just-passed quarter.
“Our 2007 financial performance was disappointing,” acknowledged President and CEO Heather D. Brolick. “Economic conditions in West Michigan increasingly reflect the deteriorating economy of the state, with higher levels of unemployment, declining property values and a weakening business climate. These conditions have negatively impacted certain of our borrowers.”
During the fourth quarter the company responded proactively, Brolick said, by pre-announcing a $1 million provision for loan losses to cover current and potential problems in its loan portfolio. Brolick shad the bank is aggressively controlling overhead expenses while focusing on fee-generating activities. She said Community Shores expanded brand network provides the infrastructure to grow the company’s deposit base and help alleviate margin pressure created by the declining interest rate environment.
Total revenue was $9.7 million for 2007, a decrease of 3.1 from the $10 million posted for 2006. Assets at Dec. 31 totaled $272.6 million, an increase of $25.7 million over Dec. 31, 2006. Loans grew $24.9 million, or 12 percent, to $232.5 million, or 11 percent above the prior year end.