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

Commission File No. 000-33373

COMMUNITY CENTRAL BANK CORPORATION

(Exact name of small business issuer as specified in its charter)

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
(Address of principal executive offices and zip code)

(586) 783-4500
(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company þ

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class		Outstanding at August 13, 2009
Common Stock		3,737,181 Shares

 

 

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

PART I

Item 1. Financial Statements

Consolidated Balance Sheet

		June 30,				December 31,
		2009				2008
		(Unaudited)
		(In thousands)
Assets
Cash and due from banks		$	33,986			$	9,162
Federal funds sold			994				7,000
Cash and Cash Equivalents			34,980				16,162
Trading securities at fair value option			—				17,463
Securities available for sale, at fair value			63,503				76,552
Securities held to maturity, at amortized cost			3,744				1,515
FHLB stock			5,877				5,877
Residential mortgage loans held for sale			9,509				3,302
Loans
Commercial real estate			280,066				284,811
Commercial and industrial			50,446				38,714
Residential real estate			51,036				54,409
Home equity lines of credit			22,483				21,230
Consumer loans			7,291				7,107
Credit card loans			733				846
Total Loans			412,055				407,117
Allowance for credit losses			(9,809	)			(7,315	)
Net Loans			402,246				399,802
Net property and equipment			9,093				9,361
Accrued interest receivable			2,025				2,479
Other real estate			4,896				2,913
Goodwill			638				638
Intangible assets, net of amortization			69				80
Cash surrender value of Bank Owned Life Insurance			11,123				10,975
Other assets			7,646				9,831
Total Assets		$	555,349			$	556,950

(continued)

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Consolidated Balance Sheet

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

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)
Consolidated Statements of Income
(Unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
						(In thousands, except per share data)
Interest Income
Loans (including fees)		$	6,653			$	6,373			$	12,913			$	12,864
Taxable securities			721				942				1,659				1,768
Tax exempt securities			84				147				198				376
Federal funds sold			7				54				13				309
Total Interest Income			7,465				7,516				14,783				15,317
Interest Expense
NOW and money market accounts			66				168				151				462
Savings deposits			13				63				30				113
Time deposits			2,524				2,734				5,175				5,770
Repurchase agreements and fed funds purchased			315				289				632				520
Federal Home Loan Bank advances			1,133				1,248				2,271				2,474
ESOP loan interest expense			—				1				—				1
Subordinated debentures			311				216				613				507
Total interest expense			4,362				4,719				8,872				9,847
Net Interest Income			3,103				2,797				5,911				5,470
Provision for Credit Losses			2,700				884				5,250				2,984
Net Interest Income after Provision for Credit Losses			403				1,913				661				2,486
Noninterest Income
Fiduciary income			82				98				165				206
Deposit service charges			95				142				190				274
Net realized security gain			228				49				356				110
Change in fair value of assets/liabilities carried at fair value under SFAS 159			838				872				1,070				3,011
Mortgage banking income			1,290				430				1,761				880
Other income			259				568				464				878
Total noninterest income			2,792				2,159				4,006				5,359
Noninterest Expense
Salaries, benefits and payroll taxes			2,249				1,835				4,181				3,667
Net occupancy expense			417				452				880				913
Other operating expense			1,790				1,471				3,269				2,735
Total noninterest expense			4,456				3,758				8,330				7,315
Income (Loss) Before Taxes			(1,261	)			314				(3,663	)			530
Provision for Income Tax (Benefit) Expense			(459	)			39				(1,317	)			15
Net income (loss)		$	(802	)		$	275			$	(2,346	)		$	515
Dividends declared on preferred shares			106				—				156				—
Net income (loss) available on common shares		$	(908	)		$	275			$	(2,502	)		$	515
Per share data:
Basic earnings (loss)		$	(0.24	)		$	0.07			$	(0.67	)		$	0.14
Diluted earnings (loss)		$	(0.24	)		$	0.07			$	(0.67	)		$	0.14
Cash dividends		$	—			$	0.02			$	—			$	0.08

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)
Consolidated Statements of Comprehensive Income
(Unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
		(In thousands)								(In thousands)
Net Income (Loss) as Reported		$	(802	)		$	275			$	(2,346	)		$	515
Other Comprehensive Income, Net of Tax
Change in unrealized net gain on securities available for sale			(132	)			(868	)			59				(320	)
Comprehensive Income (Loss)		$	(934	)		$	(593	)		$	(2,287	)		$	195

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)
Consolidated Statements of Cash Flow
(Unaudited)

		Six Months Ended June 30,
		2009				2008
		(In thousands)
Operating Activities
Net income (loss)		$	(2,346	)		$	515
Adjustments to reconcile net income to net cash flow from operating activities:
Net amortization of security premium			166				51
Net 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				2,984
Depreciation expense			323				336
Deferred income tax (benefit) expense			(1,317	)			15
ESOP compensation expense			—				25
SFAS 123R option expense			40				28
Decrease 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	)			2,918
Increase in other real estate			(1,983	)			(1,171	)
Net Cash (Used in) Provided By Operating Activities			(5,251	)			1,720
Investing Activities
Sales, maturities, calls and prepayments of securities available for sale			69,638				47,607
Purchases 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				2,602
Purchases 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 Activities
Net increase in demand and savings deposits			13,836				9,980
Net decrease in time deposits			(1,659	)			(8,499	)
Net increase in short term borrowings			1,026				270
FHLB advance repayments			(10,500	)			13,000
Payment of ESOP debt			—				(25	)
Stock options exercise / award			—				14
Preferred Stock Issuance			500				—
Preferred Stock dividend paid			(156	)			—
Cash dividends paid			—				(284	)
Repurchase of stock			—				(7	)
Net Cash Provided by Financing Activities			3,047				14,449
Increase in Cash and Cash Equivalents			18,818				4,988
Cash and Cash Equivalents at the Beginning of the Period			16,162				9,183
Cash and Cash Equivalents at the End of the Period		$	34,980			$	14,171
Supplemental Disclosure of Cash Flow Information
Interest paid		$	9,237			$	9,886
Loans transferred to other real estate owned		$	2,650			$	1,242

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)
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

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

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.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The Corporation did not issue options during the second quarter of 2009 or 2008. The total amount of options outstanding at June 30, 2009 was 303,475 shares at a weighted average exercise price of $7.91 per share. During the second quarter of 2009, no options were exercised. During the second quarter of 2009, the Corporation recognized compensation expense for stock options awarded over the vesting period based on the fair value of the options granted. The fair value of each option grant is estimated on the date of grant using the Black Scholes option pricing model. The expense recorded for the second quarter of 2009 and 2008 are disclosed for comparison below.

		Three Months Ended								Six Months Ended
		June 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

5. Fair Value

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). The statement permitted an entity to immediately elect the fair value option for existing eligible items. While not required to adopt the new standard until 2008, the Corporation elected to adopt it in the first quarter of 2007. The Corporation was also required to simultaneously adopt all the requirements under SFAS 157, Fair Value Measurements. As a result of the Corporation’s adoptions, certain financial instruments were valued at fair value using the fair value option. The Corporation adopted 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 Identified Transactions That Are Not Orderly. See Note 1. New Accounting Pronouncements.

The Corporation utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Additionally, from time to time, the Corporation may be required to record at fair value other assets on a nonrecurring basis, such as loans held for sale, loans held for investment and certain other assets. These nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets.

Fair Value Hierarchy

Under SFAS 157, the Corporation groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1    Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2    Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3    Valuation contains unobservable input(s) and is used to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity. Level 3 instruments typically include, in addition to unobservable or Level 3 components, observable components.

Management has elected the fair value option for the following reasons for each of the eligible items or group of similar eligible items.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Investment Securities:

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 hedging interest rate swap position with the counterparty which resulted in realizing a combined net loss of $225,000 in the first six months of 2009. This was based on management’s determination that the combination of the securities and interest rate swap would no longer provide a benefit to the Corporation in the current historically low interest rate environment. The Corporation had held the securities and interest rate swap for an extended amount of time under SFAS 159.

Subordinated Debentures:

Management elected the fair value option for its subordinated debenture. Management considers the subordinated debentures a critical component for future growth and wished to utilize interest rate swaps at that point in time to hedge the risk of this longer term liability. Management elected SFAS 159 accounting treatment for interest rate swaps because it was less complex than alternative methods and therefore suitable for a community bank with limited resources. Management has elected the fair value option on the subordinated debenture which was issued on February 13, 2007 for $18.6 million. Additionally, an interest rate swap for a like kind notional value was secured, in part, to reduce any volatility associated with the recognition of the fair value option under SFAS 159. Under the interest rate swap the Corporation has agreed to receive a fixed rate of 6.71% and pay Libor plus 170 basis points. The debenture carries an interest rate fixed for 10 years at 6.71%, and was originally based on a ten year treasury interest rate swap of 5.06%, plus 165 basis points and was prior to the settlement of the interest rate swap hedging market fluctuations. In the first quarter of 2009, the Corporation elected to unwind the interest rate swap position with the counterparty which resulted in realizing $3.3 million, which represented substantially all of the unrealized gains which had been recorded as noninterest income, under SFAS 159 through December 31, 2008. This was based on management’s determination that the interest rate swap would no longer provide a benefit to the Corporation.

Management has the intent to utilize the fair value option on selected financial assets and liabilities on a go forward basis.

The valuations of the instruments measured under SFAS 157, “Fair Value Measurement,” for 2007 were measured under a market approach using matrix pricing investment for investment securities and the income approach using observable data for the liabilities reported under SFAS 159, “Fair Value Option.” The inputs were observable for the asset and liability yields on commonly quoted intervals based on similar assets and liabilities for level 2 instruments. Community Central Bank Corporation does not have a credit rating through any major credit research credit rating facilities. The Trust Preferred Market from which a basis for pricing on the subordinated debenture is arrived at is reflective of changes in the commercial banking environment. The determination of fair value of the subordinated debenture is considered by management to be reflective of the current assessments as to the market for fixed rate trust preferred and subordinated debentures of similar duration and characteristics. During several quarterly periods, the Trust Preferred Market reflected only a small base of participants in the market place. The disarray in the credit markets contributed to the lack of market transactions in this financial instrument. Under Financial Accounting Standards Board Staff Position FAS 157-4 (FSP FAS 157-4), “Determining Fair Value When the Volume of Level of Activity for the Asset or Liability Have Significantly Decreased and Indentifying Transactions That Are Not Orderly,” management evaluated factors to determine whether there has been a significant decrease in volume of activity for the liability compared to normal market activity. Based on the factors observable to management contained in the FSP FAS 157-4, management concluded that quoted prices may not be determinative of fair value. Management also evaluated the circumstances to determine whether the issuance of subordinated debentures and trust preferred securities was orderly based on the weight of evidence available. Based on the factors contained in FSP FAS 157-4, management concluded the market for bank subordinated debentures and trust preferred securities was not orderly. Management has used all observable data available, including the market data for subordinated debentures and trust preferred securities traded as assets, to obtain additional observable information. The inputs and valuation techniques used by management to determine fair value included pricing models for like type financial instruments priced to a yield to maturity of that instrument. Management uses market surveys for like type instruments in aiding the valuation process. Management also considers market data for the issuance of subordinated debentures in evaluating the appropriate fair value of the instrument. Multiple inputs are used in the valuation process including assumptions on credit spreads, projected yield curves and other modeling techniques used in pricing financial instruments to determine the fair value after incorporating all known factors and adjustments which may be significant. A determination was made, based upon the significance of unobservable parameters as of June 30, 2009 to the overall fair value measurement, to continue to report the subordinated debentures under level 3 significant unobservable inputs. In addition

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

to the unobservable components, or level 3 components, observable components that can be validated to external sources are part of the validation methodology. The net change in fair value associated with all instruments recorded under SFAS 159 totaled $1.1 million for the first six months of 2009, versus $3.0 million for the first six months of 2008. The decrease was primarily related to smaller gains recorded in fair market value of the subordinated debenture connected with the issuance of trust preferred securities. The dramatic widening of market credit spreads for this instrument favorably impacted the relative fair value of this financial liability. Changes in credit spreads are not easily predictable and may cause adverse changes in the fair value of this instrument and a possible loss of income in the future.

Securities Available for Sale, at Fair Value:

The fair values of securities available for sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The following table presents the financial instruments carried at fair value as of June 30, 2009, and December 31, 2008, by major product category and by the SFAS 157 valuation hierarchy. The tables below also contains the changes in fair value for the six months ended June 30, 2009, and the twelve months ended December 31, 2008, for items measured at fair value pursuant to election of the fair value option.

						Fair Value Measurement at								Changes in fair value for six months
						June 30, 2009								ended June 30, 2009 measured at fair
						Significant Other				Significant				value pursuant to election of the fair
		Fair Value				Observable				Unobservable				value option
		Measurements				Inputs				Inputs				Other Gains or Losses in pretax
Description		6/30/2009				(Level 2)				(Level 3)				income
		(In thousands)
Assets
Trading securities (a)		$	—			$	—			$	—			$	(150	)
Securities available for sale			63,503				63,503				—				—
Interest rate swap hedging securities (a)			—				—				—				(75	)
Liabilities
Subordinated debentures			11,155				—				11,155				1,620
Interest rate swap hedging subordinated debentures (b)			—				—				—				(325	)
														$	1,070

						Fair Value Measurement at								Changes in fair value for twelve
						December 31, 2008								months ended December 31, 2008
						Significant Other				Significant				measured at fair value pursuant to
		Fair Value				Observable				Unobservable				election of the fair value option
		Measurements				Inputs				Inputs				Other Gains or Losses in pretax
Description		12/31/08				(Level 2)				(Level 3)				income
		(In thousands)
Assets
Trading securities		$	17,463			$	17,463			$	—			$	262
Securities available for sale			76,552				76,552				—				—
Interest rate swap hedging securities			(958	)			(958	)			—				(417	)
Liabilities
Federal Home Loan Bank Advances			—				—				—				(14	)
Subordinated debentures			12,757				—				12,757				4,840
Interest rate swap hedging subordinated debentures			3,538				3,538				—				2,870
														$	7,541

Interest income and interest expense of the respective financial instruments have been recorded in the consolidated statement of income based on the category of financial instrument.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Changes in level 3 recurring fair value measurements

The table below includes a rollforward of the balance sheet amounts for the six months ended June 30, 2009 (including the change in fair value), for financial instruments classified by the Corporation within level 3 of the valuation hierarchy. When a determination is made to classify a financial instrument within level 3, the determination is based upon the significance of the unobservable parameters to the overall fair value measurement. However, level 3 financial instruments typically include, in addition to the unobservable or level 3 components, observable components (that is, components that can be validated to external sources); accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.

Fair value measurements using significant unobservable inputs
(In millions)

Changes in unrealized gains

and (losses) related to

Total realized /

Purchases,

Transfers

financial instruments for the

For the three months

Fair Value

unrealized

issuances

in and / or

Fair Value

three months ended held at

ended 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 gains

and (losses) related to

Total realized /

Purchases,

Transfers

financial instruments for the

For the six months

Fair Value

unrealized

issuances

in and / or

Fair Value

six months ended held at

ended 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

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Assets Measured at Fair Value on a Nonrecurring Basis

Residential Mortgages Held for Sale

Residential mortgages held for sale are reported at the lower of cost or fair value. The fair value of the residential mortgages held for sale is based on binding quotes from investors.

Impaired Loans

The Corporation does not record loans at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with SFAS 114, “Accounting by Creditors for Impairment of a Loan.” The fair value of impaired loans is estimated primarily using collateral value. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded investments in such loans. The fair value of the collateral is based on an observable market price, current appraised value and management’s estimates of collateral and other market conditions. Due to the lack of market transactions, volatility in pricing and other factors, some of which may be unobservable, the Corporation recorded the impaired loans as nonrecurring level 3.

Other Real Estate Owned

Other real estate owned assets are adjusted to fair value, less costs of sale, upon transfer of the loans to foreclosed assets. Subsequently, other real estate owned assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. The fair value of the collateral is based on an observable market price, a current appraised value, or management’s estimates. Due to the lack of transactions, volatility in pricing and other factors, some of which may be unobservable, the Corporation recorded other real estate owned as nonrecurring level 3.

The following table presents assets measured at fair value on a nonrecurring basis at June 30, 2009 and December 31, 2008.

						Quoted Prices in
						Active Markets for				Significant Other				Significant
						Identical Assets				Observable Inputs				Unobservable Inputs
Assets		Fair Value				(Level 1)				(Level 2)				(Level 3)
						(In thousands)												Total Losses for the
																		Six months ended
																		June 30, 2009
June 30, 2009
Residential mortgages held for sale		$	9,509			$	—			$	—			$	9,509			$	—
Impaired loans accounted for under FAS 114		$	30,283			$	—			$	—			$	30,283			$	3,282
Other real estate owned		$	4,896			$	—			$	—			$	4,896			$	436
																		Total Losses for the
																		Year ended
																		December 31, 2008
December 31, 2008
Impaired loans accounted for under FAS 114		$	17,936			$	—			$	—			$	17,936			$	4,509
Other real estate owned		$	2,913			$	—			$	—			$	2,913			$	1,075

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

In accordance with FSP FAS 107-1, the carrying amounts and estimated fair values of financial instruments, at June 30, 2009 and December 31, 2008 are as follows:

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

Fair values are based on quoted market prices for similar instruments or estimated using discounted cash flow analysis. The discount rates used are estimated using comparable market rates for similar types of instruments adjusted to be commensurate with the credit risk, overhead costs and optionality of such instruments. Considerable judgment is inherently required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented below do not necessarily represent amounts that the Corporation could realize in a current market exchange. The following methods and assumptions were used to estimate the fair value of financial instruments:

Cash and cash equivalents: For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities, Federal Home Loan Bank stock: The fair value of the security portfolio is based on matrix pricing where similar securities are used to interpolate fair value of the subject instruments and as such is considered a level 2 valuation. The carrying value of FHLB stock approximates fair value based on their redemption provisions.

Loans: For variable rate loans with no significant change in credit risk since loan origination, the carrying amount is a reasonable estimate of fair value. For all other loans, including fixed rate loans, the fair value is estimated using a discounted cash flow analysis, using interest rates currently offered on similar loans to borrowers with similar credit ratings and for the same remaining maturities. The resulting value is reduced by an estimate of losses inherent in the portfolio.

Residential mortgages held for sale: The estimated fair value of residential mortgages held for sale is the carrying amount. The duration of the portfolio is typically within two weeks or less and a commitment of sale has already occurred when the loans are funded.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Deposits: The estimated fair value of demand deposits, certain money market deposits, and savings deposits is the amount payable on demand at the reporting date. The fair value of fixed maturity time deposits is estimated using the rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank advances: The estimated fair value of Federal Home Loan Bank advances is estimated using rates currently offered for funding sources of similar remaining maturities.

Repurchase agreements: The estimated fair value of short-term borrowings is the carrying amount, since they mature the next day.

Accrued interest: Accrued interest receivable and payable are short-term in nature; therefore, their carrying amount approximates fair value.

Subordinated debentures: Subordinated debentures are carried at fair value under SFAS 159.

Commitments: The fair value of commitments is estimated using the fees currently charged to enter into similar arrangements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. The majority of commitments to extend credit and letters of credit would result in loans with a market rate of interest if funded. The fair value of these commitments is not material.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion compares the financial condition of the Corporation and its wholly owned subsidiaries at June 30, 2009 and December 31, 2008 and the results of operations for the three months and six months ended June 30, 2009 and 2008. This discussion should be read in conjunction with the financial statements and statistical data presented elsewhere in this report.

SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and about the Corporation and the Bank. Words such as anticipates, believes, estimates, expects, forecasts, intends, is likely, plans, projects, variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Actual results and outcomes may materially differ from what may be expressed or forecasted in the forward-looking statements. The Corporation undertakes no obligation to update, amend, or clarify forward looking statements, whether as a result of new information, future events (whether anticipated or unanticipated), or otherwise.

Future factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; results of examinations of us by the Federal Deposit Insurance Corporation, Michigan Office of Financial and Insurance Services or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses or to write-down assets; our ability to control operating costs and expenses; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; our ability to manage loan delinquency rates; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; legislative or regulatory changes that adversely affect our business; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and other risks detailed in the Corporation’s reports filed with the Securities and Exchange Commission.

EXECUTIVE SUMMARY

Community Central Bank Corporation is the holding company for Community Central Bank (the “Bank”) in Mount Clemens, Michigan. The Bank opened for business in October 1996 and serves businesses and consumers across Macomb, Oakland, St. Clair and Wayne counties with a full range of lending, deposit, trust, wealth management and Internet banking services. The Bank operates four full service facilities in Mount Clemens, Rochester Hills, Grosse Pointe Farms and Grosse Pointe Woods, Michigan. Community Central Mortgage Company, LLC, a subsidiary of the Bank, operates locations servicing the Detroit metropolitan area and central and northwest Indiana. River Place Trust and Community Central Wealth Management are divisions of Community Central Bank. Community Central Insurance Agency, LLC is a wholly owned subsidiary of Community Central Bank. The Corporation’s common shares trade on The NASDAQ Global Market under the symbol “CCBD.”

Our results of operations depend largely on net interest income. Net interest income is the difference in interest income the Corporation earns on interest-earning assets, which comprise primarily commercial and residential real estate loans and, to a lesser extent, commercial business and consumer loans, and the interest the Corporation pays on our interest-bearing liabilities, which are primarily deposits and borrowings. Management strives to match the repricing characteristics of the interest earning assets and interest bearing liabilities to protect net interest income from changes in market interest rates and changes in the shape of the yield curve.

The results of our operations may also be affected by local and general economic conditions. The largest geographic segment of our customer base is in Macomb County, Michigan. The economic base of the County continues to diversify from the automotive service sector, although the impact of the restructuring of the American automobile companies has a direct impact on southeastern Michigan. A slowdown in the local and statewide economy has produced increased financial strain on segments of the Bank’s customer base. The Bank has experienced increased delinquency levels and losses in its loan portfolio, primarily with residential developer loans, residential real estate loans and home equity and consumer loans. Further downturns in the local economy may affect the demand for, and performance of, commercial loans and related small to medium business related products. This could have a significant impact on how the Corporation deploys earning assets. The competitive environment among other financial institutions and financial service providers and the Bank in the Macomb, Oakland, Wayne and St. Clair counties of Michigan may affect the pricing levels of various deposit products. The impact of competitive rates on deposit products may increase the relative cost of funds for the Corporation and thus negatively impact net interest income.

The weakness in the economy continues to affect parts of our loan portfolio requiring a higher provision for loan losses. Although our nonperforming loan level continues to pressure our earnings, we continue to proactively deal with loan issues. We continue to focus on strategies to preserve and increase capital, and emphasize segments of operations that are capital efficient, such as our mortgage banking operations, our branch deposit operations as well as our Trust and Wealth divisions. An ongoing effort to increase our core deposits has translated to a reduction in our cost of funds. During the first six months of 2009, our deposits increased $12.2 million, with organic deposits increasing $32.4 million, as wholesale deposits decreased $20.2 million. We also decreased Federal Home Loan Bank advances $10.5 million during the first six months, replacing them with lower cost core deposit funding. We recorded a $2.7 million provision for loan losses in the second quarter of 2009 and $5.3 million for the first six months of 2009. The provision is based upon management’s review of the risks inherent in the loan portfolio and the level of our allowance for loan losses. In addition, net charge-offs for the first six months of 2009 totaled $2.8 million, or 1.31% of total average loans on an annualized basis. Total nonaccruing loans and loans past due 90 days or more and still accruing interest totaled $32.4 million, or 7.85% of total loans at June 30, 2009 compared to $17.6 million, or 4.32% at December 31, 2008. The allowance for loan losses at June 30, 2009 was $9.8 million, or 2.38%, versus $7.3 million, or 1.80% at December 31, 2008. In addition to the nonaccrual loans stated above, as of June 30, 2009, restructured loans, within the meaning of SFAS No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” increased to $10.2 million from $8.2 million at December 31, 2008. Management is planning on reducing the brokered time deposits and Federal Home Loan Bank advances for the

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

foreseeable future. Management plans to reduce total assets to help increase the capital ratios and thereby increase capital availability for potential future provision expense. The sale of loan participations at par totaling approximately $10.0 million during the second quarter of 2009 was part of management’s plan to de-leverage the balance sheet. The total net interest income of the

Corporation will be somewhat negatively affected by the planned decrease in earning assets. The decrease in earning assets should not have a negative effect on net interest margin as the reduction in wholesale funds is a relatively high cost of funds producing relatively compressed interest rate spreads at levels smaller than the current interest margin.

The Corporation continues to see competitive deposit rates offered from local financial institutions within the geographic proximity of the Bank which could have the effect of increasing the costs of funds to a level higher than management projects. The Corporation continues to utilize wholesale forms of funding earning assets through the FHLB and brokered certificates of deposit to balance both interest rate risk and the overall cost of funds. Brokered and internet certificates of deposit are based on a nationwide interest rate structure, typically at what is considered to be a premium interest rate. The local competition for certificates of deposit products has intensified and the Bank has found this type of wholesale funding to often effectively compete with the rates offered for similar term retail certificates of deposit products of local community and regional banks.

In December 2008 and the first quarter of 2009, the Corporation completed an issuance of $3.6 million in new capital through a private preferred offering, with $3.1 million issued in December 2008 and $500,000 issued in the first quarter, 2009.

Assets

At June 30, 2009, the Corporation’s assets totaled $555.3 million, a decrease of $1.6 million or 0.3% from December 31, 2008. Total cash and cash equivalents at June 30, 2009 were $35.0 million or an increase of $18.8 million from December 31, 2008. Management is planning on using the excess liquidity to pay down upcoming maturies of brokered time deposits and Federal Home Loan Bank advances. This will have the effect of reducing the total assets of the Bank and Corporation. Management plans to reduce total assets to help increase the capital ratios and thereby increase capital availability for potential future provision expense. The increase in cash and cash equivalents was attributable to a reduction in total loan from the sale of loan participations at par totaling approximately $10.0 million during the second quarter of 2009. The total net interest income of the Corporation will be somewhat negatively affected by the planned decrease in earning assets. The decrease in earning assets should not have a negative effect on net interest margin as the reduction in wholesale funds is a relatively high cost of funds producing relatively compressed interest rate spreads at levels smaller than the current interest margin.

Loan growth of $4.9 million for the first six months of 2009 was primarily comprised of commercial and industrial loans which increased $11.7 million. Partially offsetting this growth was a decrease in the commercial real estate portfolio of $4.7 million and the residential mortgage portfolio of $3.4 million. During the second quarter of 2009, the Corporation sold loan participations, at par, of approximately $10.0 of commercial real estate loans. At June 30, 2009, commercial and commercial real estate loans comprised 68.0% of the total loan portfolio, which is consistent with our current and historical small business focus. The growth in the commercial loan portfolio for the first quarter of 2009 was due, in part, to the dislocation of credit worthy businesses from regional banks in our market area as these banks continued to tighten their available credit. Lending activities during the second quarter of 2009 was limited to servicing existing customers only as the Corporation is pursuing strategies to reducing earning assets that require higher levels of capital. At June 30, 2009, $37.4 million or 73.9% of the total residential portfolio was comprised of adjustable rate mortgages. Residential mortgage loans which the Corporation holds in portfolio comprise primarily banking relationships. The HELOC portfolio totaled $22.5 million at June 30, 2009, an increase of $1.3 million or 5.9% from December 31, 2008. The majority of the increase in the HELOC portfolio related to a small group of new HELOC loans made to high net worth customers. New underwriting guidelines for those HELOC loans carried in the portfolio of the Bank limit loan to values, including prior liens, to 85% of appraised value of the real estate and were adopted during the first quarter of 2008. This represents a decrease from the prior loan to value levels of 95%. Our consumer loan portfolio, comprised primarily of boat loans, totaled $7.3 million at June 30, 2009, a small increase of $164,000 from December 31, 2008. The small increase in this portfolio was isolated to a loan to a creditworthy high net worth individual, as generally the Corporation is seeking to decrease its exposure in retail based loans as it has experienced an increase in delinquencies and repossessions. The credit card portfolio totaled $733,000 at June 30, 2009, a decrease of $113,000 from December 31, 2008. The Corporation continues to book credit card loans as a customer accommodation but is not actively marketing this product.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Additionally, the Corporation had approximately $167.2 million in outstanding loans at June 30, 2009, to borrowers in the real estate rental and properties management industries. Approximately 67.3% of all commercial real estate loans are owner occupied.

The major components of the loan portfolio are as follows:

		June 30,				Percentage				December 31,				Percentage				Net				Net
		2009				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	%

Securities available for sale totaled $63.5 million at June 30, 2009, a decrease of $13.0 million for the first six months of 2009. The largest changes in the portfolio occurred in the U.S. Agency notes which decreased $12.0 million to zero at June 30, 2009, as a result of calls and sales. Mortgage-backed securities increased $3.0 million to $29.7 million at June 30, 2009, as a result of purchases of Government National Mortgage Association (“GNMA”) securities which carry the full faith and credit of the United States Government. Collateralized mortgage obligations (“CMO”) totaled $26.2 million at June 30, 2009, remaining relatively unchanged from a total of $25.7 million at December 31, 2008. Municipal securities in portfolio totaled $7.1 million at June 30, 2009, a decrease of $4.9 million from December 31, 2008. The portfolio of municipal bonds was reduced for federal income tax considerations through sales, maturities and calls.

At June 30, 2009, our available for sale securities portfolio had net unrealized losses of $311,000 or 49 basis points of the total portfolio. The Corporation continues to invest in U.S. Government Agency securities, primarily mortgage-backed instruments issued by GNMA, to limit credit risk. The total net realized gain from the sale of available for sale securities totaled $356,000 for the first six months of 2009 and was the result of portfolio restructuring activity.

The Corporation has less than one percent of the total investment portfolio in non-agency investments.

At June 30, 2009 the Corporation had no securities designated as trading. 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. This was based on management’s determination that the combination of the securities and interest rate swap no longer provided a benefit to the Corporation in the current historically low interest rate environment. The Corporation had held the securities and interest rate swap for an extended amount of time under SFAS 159.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The following table is a summary of our nonperforming loans, restructured loans within the meaning of SFAS No. 15, “Accounting by Debtors and Creditors for Troubled Debt Restructurings,” other real estate owned and repossessed property.

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

Of those loans reported as troubled debt restructured loans, $9.7 million or 95% were contractually current. Troubled Debt Restructured loans which were past due 30 to 89 days totaled $495,000 million. The majority of the increase in nonperforming loans for the first quarter of 2009 related to commercial real estate loans which included an industrial building and an apartment complex.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The following table shows an analysis of the allowance for loan losses:

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

The Corporation performs a detailed quarterly review of the allowance for loan losses. The Corporation evaluates those loans classified as substandard, under its internal risk rating system, on an individual basis for impairment under SFAS 114. The level and allocation of the allowance is determined primarily based on management’s evaluation of collateral value, less the cost of disposal, for loans reviewed in this category. The remainder of the total loan portfolio is segmented into homogeneous loan pools with similar risk characteristics for evaluation under SFAS 5. The primary risk element considered by management regarding each consumer and residential real estate loan is lack of timely payment. Management has a reporting system that monitors past due loans and has adopted policies to pursue its creditor’s rights in order to preserve the Bank’s position. The primary risk elements concerning commercial and industrial loans and commercial real estate loans are the financial condition of the borrower, the sufficiency of collateral and lack of timely payment. Management has a policy of requesting and reviewing annual financial statements from its commercial loan customers and periodically reviews the existence of collateral and its value.

In the 2008 Annual Report on Form 10-K for the year ended December 31, 2008, the Corporation disclosed a potential loan loss related to one borrower relationship totaling $2.8 million. This loan relationship was largely unsecured and had potential for loss up to the unsecured portion of $2.4 million. This relationship has since been restructured with additional cash escrows. The majority of this loan remains unsecured as before. The specific allowance assigned to this credit under SFAS 114 was $600,000 at June 30, 2009.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Liabilities

Total deposits of $369.6 million at June 30, 2009 increased $12.2 million, or 3.4%, for the first six months of 2009. Increases in deposits for the quarter were entirely related to organic growth, as brokered time deposits decreased $19.1 million during this period of time. Noninterest bearing demand accounts totaled $50.2 million at June 30, 2009, an increase of $16.0 million during the first six months, due to the expanded branch base and selected lending activities whereby the Bank required significantly higher levels of deposits in the new relationship. At June 30, 2009, NOW and savings accounts remained relatively unchanged from December 31, 2008. Money market savings accounts totaled $21.4 million at June 30, 2009, which was a decrease of $3.1 million. The decrease is attributable to the movement of funds into higher rate alternatives such as time deposits in the extremely low rate environment. Time deposits below $100,000 increased $7.8 million for the first six months of 2009 as a result of the new branch location in Grosse Pointe Woods and our continued emphasis on deposit growth through targeted calling programs and increased community involvement. Time deposits $100,000 and over decreased $9.5 million from a planned decrease in brokered time deposits of $19.1 million. This category of deposits, when measured without the brokered time deposits, increased $9.6 million, from the same factors as the time deposits under $100,000. The Corporation continues to see competitive deposit rates offered by local financial institutions within the geographic proximity of the Bank, which has had the effect of increasing the cost of funds. The Corporation continues to focus on the growth in transactional based deposit accounts which have a much lower interest rate than time deposit products and wholesale forms of funding. The Corporation continues to utilize wholesale forms of funding through the Federal Home Loan Bank and brokered CDs, but expects to reduce this form of funding moving forward as it focuses on organic deposit growth and reduces the total asset size of the Bank.

The major components of deposits are as follows:

						Percentage								Percentage
		June 30,				of total				December 31,				of total				Net				Net
		2009				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	%

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Short term borrowings at June 30, 2009, consisted of short-term FHLB advances of $36.0 million and securities sold with an agreement to repurchase them the following day of $21.4 million. Following are details of our short-term borrowings for the dates indicated:

		June 30,				December 31,
		2009				2008
		(Dollars in thousands)
Amount outstanding at end of period
Short-term repurchase agreements		$	21,420			$	20,394
Short-term FHLB advances		$	36,000			$	25,500
Weighted average interest rate on ending balance
Short-term repurchase agreements			1.76	%			1.62	%
Short-term FHLB advances			3.91	%			3.50	%
Maximum amount outstanding at any month end during the year
Short-term repurchase agreements		$	21,420			$	20,394
Short-term FHLB advances		$	37,000			$	25,500
Average amount outstanding during the year
Short-term repurchase agreements		$	19,136			$	13,589
Short-term FHLB advances		$	36,500			$	17,484
Weighted average interest rate
Short-term repurchase agreements			0.83	%			1.97	%
Short-term FHLB advances			3.91	%			4.05	%

During the first quarter of 2007, the Corporation borrowed $19 million in a wholesale structured repurchase agreement. The interest rate on this borrowing was tied to the three month Libor rate less 250 basis points and adjusted quarterly until March 3, 2008, when the borrowing changed to a fixed interest rate of 4.95% until March 2, 2017. The repurchase agreement became callable quarterly after March 2, 2008.

In June 2001, the Corporation started to borrow long-term advances from the FHLB to fund fixed rate instruments and to attempt to minimize the interest rate risk associated with certain fixed rate commercial mortgage loans and investment securities. The advances are collateralized by residential and commercial mortgage loans under a specific collateral agreement totaling approximately $211.1 million and $240.1 million at June 30, 2009 and December 31, 2008, respectively. Long-term advances comprised advances with maturities from July 2010 to June 2016 with an average duration of approximately 3.8 years.

FHLB advances outstanding at June 30, 2009 were as follows:

		Fair Value				Average rate
		at 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	%

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Liquidity and Capital Resources

The liquidity of a bank allows it to provide funds to meet loan requests, to accommodate possible outflows of deposits, and to take advantage of other investment opportunities. Funding of loan requests providing for liability outflows and managing interest rate margins requires continuous analysis to attempt to match the maturities and repricing of specific categories of loans and investments with specific types of deposits and borrowings. Bank liquidity depends upon the mix of the banking institution’s potential sources and uses of funds. The major sources of liquidity for the Bank have been deposit growth, federal funds sold, loans and securities which mature within one year, and sales of residential mortgage loans. Additional liquidity is provided by a $15.0 million in available credit with the FHLB, unpledged securities and cash and cash equivalents. Large deposit balances which might fluctuate in response to interest rate changes are closely monitored. These deposits consist mainly of jumbo time certificates of deposit. We anticipate that we will have sufficient funds available to meet our future commitments. As of June 30, 2009, unused commitments comprised $78.5 million. The Bank has $181.5 million in time deposits coming due within the next twelve months from June 30, 2009, which includes brokered, internet and municipal time deposits. At June 30, 2009, the Bank had $147.3 million in brokered certificates of deposit, of which $109.1 million is due within one year or less. Additionally, at June 30, 2009, municipal time deposits were $9.0 million. Municipal time deposits typically have maturities less than three months.

Following are regulatory capital ratios for the Corporation and the Bank as of the dates indicated, along with the minimum regulatory capital requirement for each item. Capital requirements for bank holding companies are set by the Federal Reserve Board. In many cases, bank holding companies are expected to operate at capital levels higher than the minimum requirement.

		June 30,								December 31,
		2009								2008								Minimum Ratio				Ratio
																		for Capital				to be
		Capital				Ratio				Capital				Ratio				Adequacy Purposes				“Well Capitalized”
		(In thousands, except percentages)
Tier I capital to risk-weighted assets
Consolidated		$	40,280				9.70	%		$	45,054				10.41	%			4	%		NA
Bank only			40,498				9.73	%			39,928				9.28	%			4	%			6	%
Total capital to risk-weighted assets
Consolidated		$	53,457				12.88	%		$	57,199				13.22	%			8	%		NA
Bank only			45,789				10.99	%			45,338				10.54	%			8	%			10	%
Tier I capital to average assets
Consolidated		$	40,280				7.21	%		$	45,054				8.21	%			4	%		NA
Bank only			40,498				7.26	%			39,928				7.30	%			4	%			5	%

Management believes that the current capital position, as well as income from operations, loan repayments and other sources of funds, will be adequate to meet our short and long term liquidity needs.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The following table shows the changes in stockholders’ equity for the six months ended June 30, 2009:

														Accumulated
														Other
		Preferred				Common				Retained				Comprehensive				Total
		Stock				Stock				Earnings				Income/(Loss)				Equity
Beginning balance, January 1, 2009		$	3,050			$	32,125			$	(516	)		$	(265	)		$	34,394
Issuance of preferred stock			500				—				—				—				500
Cash dividend on preferrred shares			—				—				(155	)			—				(155	)
SFAS 123R expensing of options			—				40				—				—				40
Net loss			—				—				(2,346	)			—				(2,346	)
Change in unrealized gain/loss			—				—				—				59				59
Ending balance, June 30, 2009		$	3,550			$	32,165			$	(3,017	)		$	(206	)		$	32,492