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 (State or other jurisdiction of incorporation or organization)		38-3291744 (IRS Employer Identification No.)

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.

o Yes       þ No

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		Smaller reporting company þ
				(Do not check if a smaller reporting company)

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 May 17, 2010
Common Stock		3,737,181 Shares

 

 

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

PART I

Item 1. Financial Statements

Consolidated Balance Sheet

		March 31,				December 31,
		2010				2009
		(Unaudited)
		(In thousands)
Assets
Cash and due from banks		$	41,765			$	33,115
Federal funds sold			26,212				1,048
Cash and Cash Equivalents			67,977				34,163
Securities available for sale, at fair value			49,162				65,903
Securities held to maturity, at amortized cost			3,681				3,467
FHLB stock			5,877				5,877
Residential mortgage loans held for sale			3,801				3,497
Loans
Commercial real estate			276,857				273,578
Commercial and industrial			44,535				48,782
Residential real estate			49,792				51,101
Home equity lines of credit			21,647				21,889
Consumer loans			6,742				6,961
Credit card loans			771				856
Total Loans			400,344				403,167
Allowance for credit losses			(14,508	)			(12,957	)
Net Loans			385,836				390,210
Net property and equipment			8,962				9,106
Accrued interest receivable			1,990				1,878
Other real estate			8,597				9,300
Goodwill			638				638
Intangible assets, net of amortization			51				57
Cash surrender value of Bank Owned Life Insurance			11,364				11,285
Other assets			7,783				8,465
Total Assets		$	555,719			$	543,846

(continued)

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Consolidated Balance Sheet

		March 31,				December 31,
		2010				2009
		(Unaudited)
		(In thousands)
Liabilities
Deposits
Noninterest bearing demand deposits		$	52,984			$	45,716
NOW and money market accounts			41,647				41,872
Savings deposits			9,138				8,800
Time deposits			322,446				304,743
Total Deposits			426,215				401,131
Repurchase agreements			36,407				41,106
Federal Home Loan Bank advances			65,700				65,700
Accrued interest payable			514				618
Other liabilities			3,263				2,937
Subordinated debentures at fair value option			7,865				8,366
Total Liabilities			539,964				519,858
Stockholders’ Equity
Preferred stock (1,000,000 $1,000 par value shares authorized and 7,775 shares and 7,265 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively.)			7,645				7,146
Common stock (No par value; 9,000,000 shares authorized, and 3,737,181 outstanding at March 31, 2010 and December 31, 2009)			32,242				32,214
Accumulated deficit			(24,360	)			(15,536	)
Accumulated other comprehensive income			228				164
Total Stockholders’ Equity			15,755				23,988
Total Liabilities and Stockholders’ Equity		$	555,719			$	543,846

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Consolidated Statements of Income
(Unaudited)

		Three Months Ended
		March 31,
		2010				2009
		(In thousands, except per share data)
Interest Income
Loans (including fees)		$	5,869			$	6,260
Taxable securities			498				938
Tax exempt securities			15				114
Federal funds sold			22				6
Total Interest Income			6,404				7,318
Interest Expense
NOW and money market accounts			66				84
Savings deposits			14				17
Time deposits			2,264				2,652
Repurchase agreements and fed funds purchased			296				317
Federal Home Loan Bank advances			772				1,138
Subordinated debentures			311				302
Total interest expense			3,723				4,510
Net Interest Income			2,681				2,808
Provision for Credit Losses			8,200				2,550
Net Interest Income after Provision for Credit Losses			(5,519	)			258
Noninterest Income
Fiduciary income			66				83
Deposit service charges			91				95
Net realized security gain			78				128
Change in fair value of assets/liabilities carried at fair value under SFAS 159			501				232
Mortgage banking income			704				471
Other income			378				205
Total noninterest income			1,818				1,214
Noninterest Expense
Salaries, benefits and payroll taxes			2,234				1,932
Net occupancy expense			458				463
Other operating expense			2,295				1,479
Total noninterest expense			4,987				3,874
(Loss) Before Taxes			(8,688	)			(2,402	)
Provision for Income Tax (Benefit) Expense			—				(858	)
Net (loss)		$	(8,688	)		$	(1,544	)
Dividends declared on preferred shares			136				50
Net (loss) available on common shares		$	(8,824	)		$	(1,594	)
Per share data:
Basic earnings (loss)		$	(2.36	)		$	(0.43	)
Diluted earnings (loss)		$	(2.36	)		$	(0.43	)
Cash dividends per common share		$	—			$	—

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Consolidated Statements of Comprehensive Income
(Unaudited)

		Three Months Ended
		March 31,
		2010				2009
		(In thousands)
Net Loss as Reported			($8,688	)			($1,544	)
Other Comprehensive Income, Net of Tax
Change in unrealized net gain on securities available for sale			64				191
Comprehensive Loss			($8,624	)			($1,353	)

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Consolidated Statements of Cash Flow
(Unaudited)

		Three Months Ended March 31,
		2010				2009
		(In thousands)
Operating Activities
Net Loss			($8,688	)			($1,544	)
Adjustments to reconcile net loss to net cash flow from operating activities:
Net amortization of security premium			(235	)			33
Net gain on available for sale securities			(78	)			(128	)
Net gain on instruments at fair value			(501	)			(232	)
Provision for credit losses			8,200				2,550
Depreciation expense (benefit)			(175	)			163
Deferred income tax benefit			—				(769	)
Fair value of employee stock option expense			28				20
Decrease (increase) in accrued interest receivable			(112	)			190
(Increase) decrease in other assets			(2,874	)			3,454
(Decrease) in accrued interest payable			(104	)			(423	)
Increase (decrease) in other liabilities			326				(1,040	)
(Increase) in loans sold held for sale			(304	)			(7,571	)
(Increase) decrease in other real estate			703				(606	)
Net Cash Used in Operating Activities			(3,814	)			(5,903	)
Investing Activities
Sales, maturities, calls and prepayments of securities available for sale			20,889				30,931
Purchases of securities available for sale			(3,985	)			(23,397	)
Maturities, calls, sales and prepayments of trading securities			—				17,463
Transfer and purchase of trading securities			—				(1,737	)
Maturities, calls, and prepayments of held to maturity securities			33				27
Purchases of held to maturity securities			—				(336	)
Increase in loans			(26	)			(16,615	)
Purchases of property and equipment			(31	)			(50	)
Net Cash Provided by Investing Activities			16,880				6,286
Financing Activities
Net increase in demand and savings deposits			7,381				11,449
Net (decrease) increase in time deposits			17,703				(1,125	)
Net decrease in short term borrowings			(4,699	)			(2,094	)
FHLB advance repayments			—				(5,500	)
Preferred Stock Issuance			499				500
Preferred Stock dividend paid			(136	)			(49	)
Net Cash Provided by Financing Activities			20,748				3,181
Increase in Cash and Cash Equivalents			33,814				3,564
Cash and Cash Equivalents at the Beginning of the Period			34,163				16,162
Cash and Cash Equivalents at the End of the Period		$	67,977			$	19,726
Supplemental Disclosure of Cash Flow Information
Interest paid		$	3,827			$	4,933
Federal Taxes Paid			—				—
Loans transferred to other real estate owned		$	524			$	606

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

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 March 31, 2010 and December 31, 2009, and Consolidated Statements of Income and Comprehensive Income for the three month periods ended March 31, 2010 and 2009, and Consolidated Statements of Cash Flow for the three months ended March 31, 2010 and 2009. 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, 2009.

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:

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.

Income Taxes: Income tax expense is the sum of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

We recognize a tax position as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We recognize interest and/or penalties related to income tax matters in income tax expense.

The realization of deferred tax assets (net of a recorded valuation allowance) is largely dependent upon future taxable income, future reversals of existing taxable temporary differences and the ability to carry back losses to available tax years. In assessing the need for a valuation allowance, we consider all positive and negative evidence, including taxable income in carry back years, scheduled reversals of deferred tax liabilities, expected future taxable income and tax planning strategies.

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.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

4. 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 ASC 820, Fair Value Measurements, 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.

Investment Securities:

In the first quarter of 2009, the Corporation elected to sell substantially all of the investment securities recorded as trading securities, and to unwind the hedging interest rate swap position with the counterparty which resulted in realizing a combined net loss of $400,000 in 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 ASC 825, Financial Instruments, the Fair Value Option.

Subordinated Debentures:

Management elected the fair value option for its subordinated debenture. Management considers the subordinated debenture 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 the fair value option 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 ASC 825, Financial Instruments, the Fair Value Option. 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 the fair value option 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 ASC 820, Fair Value Measurements, 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 ASC 825, Financial Instruments, Fair Value Option. The inputs were observable

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

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 facility. 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 ASC 820, Fair Value Measurements and Disclosures, 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 ASC 820, Fair Value Measurements and Disclosures, 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 ASC 820, Fair Value Measurements and Disclosures, 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 March 31, 2010 to the overall fair value measurement, to continue to report the subordinated debentures under level 3 significant unobservable inputs. In addition 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 ASC 825, Financial Instruments, Fair Value Option, totaled $501,000 for the first three months of 2010, versus $232,000 for the first three months of 2009. The increase was primarily related to larger gains recorded in the 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 table below contains the fair value measurement at March 31, 2010 using the identified valuations and the changes in fair value for the three month period ended March 31, 2010.

Changes in fair value for

three months ended

March 31, 2010

Fair Value Measurement at

measured at fair value

March 31, 2010

pursuant to election of

Significant Other

Significant

the fair value option

Fair Value

Observable

Unobservable

Other Gains or Losses in

Measurements

Inputs

Inputs

noninterest income

Description

3/31/2010

(Level 2)

(Level 3)

pretax income

(In thousands of dollars)

Securities available for sale

$

49,162

$

49,162

$

—

$

—

Subordinated Debentures

7,865

—

7,865

501

$

501

														Changes in fair value for
														three months ended
														March 31, 2009
						Fair Value Measurement at								measured at fair value
						March 31, 2009								pursuant to election of
						Significant Other				Significant				the fair value options
		Fair Value				Observable				Unobservable				Other Gains or Losses in
		Measurements				Inputs				Inputs				noninterest income
Description		3/31/2009				(Level 2)				(Level 3)				pretax income
						(In thousands of dollars)
Trading Securities		$	1,737			$	1,737			$	—			$	(103	)
Securities available for sale			69,184				69,184				—				—
Interest rate swap hedging securities			—				—				—				(75	)
Subordinated Debentures			12,022				—				12,022				735
Interest rate swap hedging subordinated debentures			—				—				—				(325	)
														$	232

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 tables below include a roll forward of the balance sheet amounts for the three month period ended, March 31, 2010 and the twelve month period ended, December 31, 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. Also, the Corporation attempts to risk manage the observable components of level 3 financial instruments using derivative positions that are classified within level 2 of the valuation hierarchy; as these level 2 risk management instruments are not included below, the gains or losses in the table do not reflect the effect of the Corporation’s risk management activities related to such level 3 instruments.

Fair value measurements using significant unobservable inputs
(In thousands)

Changes in fair

value related to

Total realized /

Purchases

Transfers

financial

For the quarter ended

Fair Value

unrealized

issuances

in and / or

Fair Value

instruments held at

March 31, 2010

January 1, 2010

gains / (losses)

settlements, net

out of Level 3

March 31, 2010

March 31, 2010

Subordinated

Debentures

$

8,366

$

501

$

—

$

—

$

7,865

$

501

Changes in fair

value related to

Total realized /

Purchases

Transfers

financial

For the year ended

Fair Value

unrealized

issuances

in and / or

Fair Value

instruments held at

March 31, 2009

January 1, 2009

gains / (losses)

settlements, net

out of Level 3

March 31, 2009

March 31, 2009

Subordinated

Debentures

$

12,757

$

735

$

—

$

—

$

12,022

$

735

Assets Measured at Fair Value on a Nonrecurring Basis

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 loss 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 ASC 310, Accounting by Creditors for Impairment of a Loan. The fair value of impaired loans is estimated using primarily 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.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Other Real Estate Owned

Other real estate owned assets are adjusted to fair value 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 March 31, 2010 and December 31, 2009.

						Active Markets				Significant Other				Significant
						for Identical				Observable				Unobservable
						Assets				Inputs				Inputs
Assets		Date				(Level 1)				(Level 2)				(Level 3)
						(In thousands)												Total Losses for
																		the quarter ended
																		March 31, 2010
March 31, 2010
Impaired loans		$	36,699			$	—			$	—			$	36,699			$	4,968
Other real estate owned			9,300				—				—				9,300				401
																		Total Losses for
																		the quarter ended
																		March 31, 2009
March 31, 2009
Impaired loans		$	24,266			$	—			$	—			$	24,266			$	1,756
Other real estate owned			3,379				—				—				3,379				253

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

In accordance with ASC 825, Financial Instruments, the carrying amounts and estimated fair values of financial instruments at March 31, 2010 and December 31, 2009 are as follows:

		March 31, 2010								December 31, 2009
		Carrying				Estimated				Carrying				Estimated
		Amount				Fair Value				Amount				Fair Value
						(In thousands)
Financial Assets
Cash and cash equivalents		$	67,977			$	67,977			$	34,163			$	34,163
Securities available for sale, at fair value			49,162				49,162				76,552				76,552
Securities held to maturity, at amortized cost			3,681				3,708				3,467				3,469
FHLB stock			5,877				5,877				5,877				5,877
Residential mortgages held for sale			3,801				3,801				3,497				3,497
Loans, net of allowance			385,837				396,889				392,210				402,500
Accrued interest receivable			1,990				1,990				1,878				1,878
Financial Liabilities
Demand and savings deposits			103,769				103,469				96,388				96,388
Time deposits			322,446				328,837				304,743				311,102
Repurchase agreements			36,407				36,407				41,106				41,106
Federal Home Loan Bank advances			65,700				66,985				65,700				66,883
Accrued interest payable			514				514				618				618
Subordinated debentures (a)			7,865				7,865				8,366				8,366

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 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 ASC 825, Financial Instruments, The Fair Value Option. (See Note 4 to the Consolidated Financial Statements)

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.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operation

The following discussion compares the financial condition of the Corporation and its wholly owned subsidiaries at March 31, 2010 and December 31, 2009 and the results of operations for the three months ended March 31, 2010 and 2009. 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 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 Capital 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

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

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 commercial real estate, residential developer loans within the commercial real estate loan portfolio, with commercial and industrial loans, and with residential real estate loans. Further downturns in the local economy may affect the demand for, and performance of, commercial loans and related small to medium sized 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, St. Clair and Wayne counties of Michigan may affect the pricing levels of various loan and 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. We recorded an $8.2 million provision for loan losses in the first quarter of 2010. In addition, net charge-offs for the first quarter represented 6.70% of total average loans on an annualized basis. Total nonaccruing loans and loans past due 90 days or more and still accruing interest totaled $22.9 million, or 5.72% of total loans at March 31, 2010 compared to $22.9 million, or 5.68% at December 31, 2009. The allowance for loan losses at March 31, 2010 was $14.5 million, or 3.62% of total loans compared to $13.0 million, or 3.21% at December 31, 2009. In addition to the nonaccrual loans stated above, as of March 31, 2010, restructured loans increased to $31.2 million from $20.4 million at December 31, 2009. Although our nonperforming loan level and other real estate owned levels continue to pressure our earnings, we continue to proactively deal with these issues. Unless and until we can substantially reduce our levels of nonperforming loans and other real estate owned, however, we do not expect to return to profitability.

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 Management divisions. An ongoing effort to increase our core deposits has resulted in a reduction in our cost of funds. During the first quarter of 2010, our deposits increased $25.1 million. Brokered deposits decreased $16.2 million during the first quarter. Although Federal Home Loan Bank (“FHLB”) advances remained unchanged during the first quarter of 2010, we expect to continue to reduce outstanding advances as they mature, replacing them with lower cost core deposit funding.

Quantitative measures established by regulation require the Corporation and the Bank to maintain minimum amounts and ratios of Tier I capital and total capital (as defined in the regulations) to risk-weighted assets. The Corporation and the Bank are also subject to a minimum Tier I leverage ratio expressed as a percentage of quarterly average assets (as defined). The Corporation is further subject to leverage ratios consisting of primary capital and total capital as a percentage of assets at period end. The Corporation and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items. Capital amounts and classifications are also subject to qualitative judgments about components, risk weightings, and other factors in which the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements. The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent the overall financial condition of the Corporation or the Bank. As an undercapitalized Bank regulatory approval is required to accept or renew brokered deposits. In addition, the Bank is subject to significant restrictions on capital distributions, asset growth, acquisitions, new activities, new branches, and management fees. The Bank is also required to file a written capital restoration plan with the FDIC by June 14, 2010.

Management plans to reduce total assets to help increase the capital ratios and thereby increase capital availability for potential future provision expense. 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 net interest margin.

In December 2009 the Corporation raised a total of $4.2 million in capital through the sale of Series B cumulative convertible perpetual preferred stock. The Series B preferred stock can be converted into common stock of the Corporation at any time by the holders, or by the Corporation under certain circumstances, at an initial conversion price of $8.00 per share of common stock, subject to adjustment and certain limitations, as described below. A warrant to purchase shares of the Corporation’s common stock is attached to each share of Series B preferred stock. Each warrant represents the right of the holder to purchase 20 shares of the Corporation’s common stock at a purchase price of $5.00 per common share and is exercisable for ten years. Dividends on the Series B preferred stock are payable quarterly in arrears at a rate of 5.00% per annum, if and when declared by the Corporation’s Board of Directors. Dividends on the Series B preferred shares are cumulative. On or after August 1, 2010, the Series B preferred stock will be subject to mandatory conversion into common stock under certain circumstances, including the Corporation’s stock price trading at or above $10.00 per share, subject to adjustment.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

In December 2008 and February 2009, the Corporation raised a total of $3.55 million in capital through the sale of Series A noncumulative convertible perpetual preferred stock. The Series A preferred stock can be converted into common stock of the Corporation at any time by the holders, or by the Corporation under certain circumstances, at an initial conversion price of $10.00 per share of common stock, subject to adjustment and certain limitations as described below. Dividends on the Series A preferred stock are payable quarterly in arrears at a rate of 12.00% per annum, if and when declared by the Corporation’s Board of Directors and are not cumulative. The Series A preferred stock is subject to mandatory conversion into common stock under certain circumstances, including the Corporation’s stock price trading at or above $11.00 per share, subject to adjustment.

Assets

At March 31, 2010, the Corporation’s total assets were $555.7 million, an increase of $11.9 million or 2.18%, from December 31, 2009. The largest segment of asset increase for the first quarter occurred in the cash and cash equivalents, which increased from $34.1 million to $68.0 million. The available for sale securities portfolio decreased $16.8 million during the first quarter primarily from mortgage backed security pay downs and sales. The Corporation has increased its short term cash position in order to increase liquidity given the current economic uncertainties and the regulatory prohibitions on our accepting or renewing brokered deposits given our undercapitalized capital status. At March 31, 2010, $56.4 million in brokered time deposits will mature in twelve months. At March 31, 2010, total net loans decreased $2.8 million.

Changes in the loan portfolio for the first quarter of 2010 were comprised of an increase in the commercial real estate loan portfolio of $3.3 million, offset by decreases of $6.1 million in all other categories of loans for the quarter ended March 31, 2010. The primary collateral on these loans is commercial real estate, although other forms of collateral are also used to secure the loans. We also typically obtain the personal guarantees of the borrowers. Commercial and industrial loans at March 31, 2010 totaled $44.5 million, a decrease of $4.2 million or 8.71%, over the quarter ended December 31, 2009. Commercial and industrial loans as a percentage of total loans comprised 11.1%, a decrease from 12.1% of total loans at December 31, 2009. The Corporation has historically had a lower percentage of commercial and industrial type loans compared to commercial real estate loans as it concentrates its lending in the commercial real estate sector.

The residential mortgage loan portfolio totaled $49.8 million at March 31, 2010, a decrease of $1.3 million or 2.56%, from December 31, 2009. The Corporation continues to sell the residential mortgage loans it originates as the yields available from these loans are relatively lower in comparison to the commercial base. The Corporation does retain the servicing, allowing the Corporation to retain customers and the related deposit base, coupled with our ability to offer the customer other banking products. Adjustable rate loans represented $29.2 million, or 58.6%, of the total residential mortgage loan portfolio at March 31, 2010. Residential mortgage loans are made principally as an accommodation to our business banking customers. The residential ARM loans reprice typically at 400 basis points over the one year Treasury rate. The home equity lines of credit (“HELOC”) totaled $21.6 million, or 5.41% of total loans, at March 31, 2010, a decrease of $242,000 from December 31, 2009. This portfolio product is tied to The Wall Street Journal prime interest rate. These loans are secured by real estate and are currently originated with loan to values (including all prior liens) up to 80% of the appraised value of the real estate. The Corporation has significantly curtailed lending in this segment of the loan portfolio due to the dramatic decline in real estate collateral values in southeastern Michigan and nationwide.

Consumer loans (excluding HELOCs and credit card loans) totaled $6.7 million at March 31, 2010, a decrease of $219,000 from December 31, 2009, as management intentionally sought to reduce the Corporation’s exposure in this portfolio. The largest portion of the consumer loan portfolio is comprised of boat loans. The Corporation’s geographic proximity to Lake St. Clair and the lending experience in this area have contributed to this segment of the portfolio. In 2005, the Corporation offered less competitive interest rates on boat loans to reduce potential credit exposure in this area. The current downturn in the local economy has adversely affected the ability of borrowers to repay the outstanding loans. At March 31, 2010, boat loans comprised approximately $5.5 million, or 81.9%, of the consumer loan portfolio and 1.37% of total loans compared to $5.6 million, or 80.0%, of the consumer portfolio and 1.39% of total loans at December 31, 2009.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Mortgage loans held for sale totaled $3.8 million at March 31, 2010 compared to $3.5 million at December 31, 2009. The mortgage loans were originated by the Bank’s mortgage subsidiary. Loans closed generally remain in loans held for sale for less than 30 days. Loans are normally committed for sale before funding takes place.

Additionally, the Corporation had approximately $162.0 million in outstanding loans at March 31, 2010, to borrowers in the real estate rental and properties management industries. Approximately 62% of all commercial real estate loans are owner occupied.

The major components of the loan portfolio are as follows:

		March 31,				Percentage				December 31,				Percentage				Net				Net
		2010				of total loans				2009				of total loans				Change				Change %
		(In thousands, except percentages)
Loans held for sale:
Residential real estate		$	3,801							$	3,497							$	304				8.69	%
Loans held in the portfolio:
Commercial real estate		$	276,857				69.2	%		$	273,578				67.9	%		$	3,279				1.20	%
Commercial and industrial			44,535				11.1	%			48,782				12.1	%		$	(4,247	)			(8.71	%)
Residential real estate			49,792				12.4	%			51,101				12.7	%		$	(1,309	)			(2.56	%)
Home equity lines			21,647				5.4	%			21,889				5.4	%		$	(242	)			(1.11	%)
Consumer loans			6,742				1.7	%			6,961				1.7	%		$	(219	)			(3.15	%)
Credit cards			771				0.2	%			856				0.2	%		$	(85	)			(9.93	%)
Total loans		$	400,344				100.0	%		$	403,167				100.0	%		$	(2,823	)			-0.7	%

Securities available for sale totaled $49.2 million at March 31, 2010, a decrease of $16.7 million for the first three months of 2010. The Corporation continues to decrease the size of the investment portfolio in an effort to provide liquidity for upcoming maturities of brokered time deposits and reduce the total asset size of the Bank for capital considerations. Mortgage-backed securities (“MBS”) decreased $9.4 million to $32.5 million at March 31, 2010, as a result of pay downs and sales. The majority of the MBS portfolio comprises Government National Mortgage Association (“GNMA”) securities which carry the full faith and credit of the United States Government. Collateralized mortgage obligations (“CMO”) totaled $12.8 million at March 31, 2010, a decrease of $5.8 million from December 31, 2009. This decrease resulted from paydowns received on these securities. The majority of this portfolio also comprises GNMA securities. Municipal securities in portfolio totaled $3.2 million at March 31, 2010, a decrease of $1.3 million from December 31, 2009. The portfolio of municipal bonds was reduced for federal income tax considerations through sales, maturities and calls.

At March 31, 2010, our available for sale securities portfolio had unrealized gain of $345,000 or 70 basis points of the total portfolio. The Corporation continues to decrease the size of the securities portfolio in an effort to increase the Tier 1 leverage ratio of the Bank. The total net realized gain from the sale of available for sale securities totaled $78,000 for the first quarter of 2010 and was the result of portfolio restructuring activity.

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

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The following table is a summary of our nonperforming loans, restructured loans, other real estate owned and repossessed property.

		March 31,				December 31,
		2010				2009
		(In thousands)
Nonaccrual loans:
Commercial real estate		$	14,905			$	16,020
Commercial and industrial			2,288				584
Residential real estate			4,906				5,673
Home equity lines			288				219
Consumer loans			445				378
Credit cards			—				—
Total			22,832				22,874
Accruing loans delinquent more than 90 days:
Commercial real estate		$	—			$	—
Commercial and industrial			—				—
Residential real estate			84				—
Home equity lines			—				—
Consumer loans			—				—
Credit cards			—				7
Total			84				7
Total nonperforming loans		$	22,916			$	22,881
Troubled debt restructured loans:
Commercial real estate		$	29,603			$	20,341
Commercial and industrial			83				83
Residential real estate			1,483				—
Total			31,169				20,424
Other real estate owned:
Commercial real estate		$	8,275			$	8,881
Residential real estate			322				419
Total			8,597				9,300
Other repossessed boats		$	347			$	494
Total nonperforming loans to total loans			5.72	%			5.68	%
Allowance for loan losses to nonperforming loans			63.30	%			56.62	%

Nonperforming loans, consisting of nonaccruing loans and loans past due 90 days or more and still accruing interest totaled $22.9 million, or 5.72% of total loans, at March 31, 2010 compared to $22.9 million, or 5.68% of total loans, at December 31, 2009. The total amount of new loans which entered into nonaccrual status, primarily from delinquency, closely approximated the total amount of loans charged off during the first quarter of 2010. In addition to the nonperforming loans stated above, as of March 31, 2010, restructured loans increased to $31.2 million from $20.4 million at December 31, 2009. Of those loans reported as troubled debt restructured loans, $31.2 million had delinquencies of less than 30 days. A total of $2.9 million of troubled debt restructurings are classified as nonaccrual loans and reported in total nonaccrual loans for March 31, 2010.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

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

		Three Months Ended				Year Ended
		March 31,				December 31,
		2010				2009
		(In thousands)
Balance at beginning of the period		$	12,957			$	7,315
Charge-offs:
Commercial real estate			5,000				7,257
Commercial and industrial			586				1,205
Residential real estate			928				486
Home equity lines			61				538
Consumer loans			195				237
Credit cards			39				54
Total charge-offs			6,809				9,777
Recoveries:
Commercial real estate			1				72
Commercial and industrial			155				400
Residential real estate			2				23
Home equity lines			—				3
Consumer loans			2				71
Credit cards			—				—
Total recoveries			160				569
Net charge-offs (recoveries)			6,649				9,208
Provision charged to earnings			8,200				14,850
Balance at the end of the period		$	14,508			$	12,957
As a percentage of total portfolio loans			3.62	%			3.21	%
Ratio of net charge-offs during the period to average loans during the period (Annualized)			6.70	%			2.22	%

The allowance for loan losses as a percentage of total loans increased to 3.62% at March 31, 2010, compared to 3.21% at December 31, 2009. 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. 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. 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.

Liabilities

During the quarter ended March 31, 2010, total deposits increased $25.1 million to $426.2 million. The increase in deposits was attributable to an increase in noninterest bearing demand deposit accounts of $7.3 million and retail time deposits under $100,000 of $18.7 million. The increase was offset by declines in time deposits over $100,000 as the Bank actively pursued reductions in brokered time deposits which are included in the total. Total brokered time deposits decreased $16.2 million during the first quarter of 2010, decreasing to $110.4 million from $126.6 million, as the Bank replaced wholesale funding with organic growth in deposits. The Bank continues to utilize strategies to reduce its level

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

of wholesale funding both in brokered time deposits and FHLB advances. The Bank experienced core deposit growth in most deposit categories with all branches of the Bank posting deposit growth. Noninterest bearing deposits, primarily business related checking accounts, increased $7.3 million, or 15.9%, at March 31, 2010 compared to December 31, 2009. The continued growth in the Bank’s branch base and a continued focused business development effort has helped increase this area of the deposit base. The competitive rate environment amongst local financial institutions has made the Bank decide in some cases not to raise the interest rate on the deposit product at the time, frequency or level to match or exceed interest rates given by local financial institutions. The Bank continues to see competitive deposit rates offered by local financial institutions within the geographic proximity of the Bank, which could have the effect of increasing the cost of funds to a level higher than management projects. While the Bank will continue its focus on generating local deposits, it may be required to continue to use to a lesser extent, FHLB advances based on a nationwide interest rate structure, typically at what is considered to be premium interest rates. However, the local competition for certificate of deposit products has continued to be strong and the Bank has found the wholesale funding strategy to often effectively compete with the rates offered for similar term retail certificate of deposit products of local community and regional banks. As new or renewed brokered deposits have become unavailable to the Bank, cash equivalents and FHLB advances will be increasingly important as funding and liquidity options for the Bank.

The major components of deposits are as follows:

						Percentage								Percentage
		March 31,				of total				December 31,				of total				Net				Net
		2010				deposits				2010				deposits				Change				Change %
		(In thousands, except percentages)
Noninterest bearing demand		$	52,984				12.4	%		$	45,716				11.4	%		$	7,268				15.90	%
NOW accounts			19,891				4.7	%			17,059				4.3	%			2,832				16.60	%
Money market accounts			21,756				5.1	%			24,813				6.2	%			(3,057	)			(12.32	%)
Savings deposits			9,138				2.1	%			8,800				2.2	%			338				3.84	%
Time deposits under $100,000			96,484				22.6	%			77,769				19.4	%			18,715				24.06	%
Time deposits $100,000 and over			225,962				53.0	%			226,974				56.6	%			(1,012	)			(0.45	%)
Total deposits		$	426,215				100.0	%		$	401,131				100.0	%		$	25,084				6.3	%

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Short term borrowings at March 31, 2010, consisted of short term FHLB advances of $32.0 million and securities sold with an agreement to repurchase them the following day of $17.4 million. Following are details of our short term borrowings for the dates indicated:

		March 31,				December 31,
		2010				2009
		(Dollars in thousands)
Amount outstanding at end of period
Short-term repurchase agreements		$	17,407			$	22,106
Short-term FHLB advances		$	32,000			$	22,000
Weighted average interest rate on ending balance
Short-term repurchase agreements			1.46	%			1.49	%
Short-term FHLB advances			4.33	%			4.56	%
Maximum amount outstanding at any month end during the year
Short-term repurchase agreements		$	17,407			$	25,771
Short-term FHLB advances		$	32,000			$	29,000
Average amount outstanding during the year
Short-term repurchase agreements		$	18,589			$	20,863
Short-term FHLB advances		$	27,000			$	31,000
Weighted average interest rate
Short-term repurchase agreements			1.23	%			1.55	%
Short-term FHLB advances			4.33	%			4.03	%

During the first quarter of 2007, the Corporation borrowed $19 million in a wholesale structured repurchase agreement. At March 3, 2008 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 $215.0 million and $217.0 million at March 31, 2010 and 2009, respectively. Long-term advances comprised advances with maturities from August 2011 to June 2016 with an average duration of approximately 2.9 years.

FHLB advances outstanding at March 31, 2010 were as follows:

		Fair Value				Average rate
		at end of period				at end of period
		(In thousands, except percentages)
Short-term FHLB advances		$	32,000				4.33	%
Long-term FHLB advances		$	33,700				5.04	%
		$	65,700				4.70	%

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Liquidity and Capital Resources

Liquidity allows the Bank 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, unpledged securities with market values above book, loans and securities which mature within one year, and sales of residential mortgage loans. Additional liquidity is provided by a $100 million secured line of credit with the FHLB. Large deposit balances which might fluctuate in response to interest rate changes are closely monitored. These deposits consist mainly of jumbo certificates of deposit. We anticipate that we will have sufficient funds available to meet our future commitments. We have substantially increased our cash and cash equivalent balances in 2009 and through the first quarter ended March 31, 2010 as our access to brokered deposits has been curtailed due to our current regulatory capital level at the Bank. As of March 31, 2010, unused commitments comprised $77.8 million. The Bank has $155.3 million in time deposits coming due within twelve months from March 31, 2010, which includes $56.4 million of brokered deposits.

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.

		March 31,								December 31,								Minimum Ratio				Ratio
		2010								2009								for Capital				to be
		Capital				Ratio				Capital				Ratio				Adequacy Purposes				“Well Capitalized”
		(In thousands, except percentages)
Tier I capital to risk-weighted assets
Consolidated		$	13,098				3.35	%		$	24,584				6.31	%			4	%			NA
Bank only			22,510				5.77	%			31,133				7.99	%			4	%			6	%
Total capital to risk-weighted assets
Consolidated		$	26,196				6.71	%		$	44,619				11.44	%			8	%			NA
Bank only			27,507				7.05	%			36,102				9.27	%			8	%			10	%
Tier I capital to average assets
Consolidated		$	13,098				2.34	%		$	24,584				4.47	%			4	%			NA
Bank only			22,510				4.02	%			31,133				5.67	%			4	%			5	%

The Bank was categorized as undercapitalized at March 31, 2010 and adequately capitalized at December 31, 2009. Since the Bank was adequately capitalized at December 31, 2009, regulatory approval is required to accept or renew brokered deposits. We have not requested any such approvals. Effective January 1, 2010, the interest rate we may pay for deposits is limited to 75 basis points above the national rate for similar products unless we can support to the FDIC that prevailing rates in our market area exceed the national average.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The following table shows the changes in stockholders’ equity for the three months ended March 31, 2010:

														Accumulated
														Other
		Preferred				Common				Retained				Comprehensive				Total
		Stock				Stock				Earnings				Income/(Loss)				Equity
Beginning balance, January 1, 2010		$	7,146			$	32,214			$	(15,536	)		$	164			$	23,988
Issuance of preferred stock			499				—				—				—				499
Cash dividend on Preferred shares			—				—				(136	)			—				(136	)
SFAS 123R expensing of options			—				28				—				—				28
Net income (loss)			—				—				(8,688	)			—				(8,688	)
Change in unrealized gain/loss			—				—				—				64				64
Ending balance, March 31, 2010		$	7,645			$	32,242			$	(24,360	)		$	228			$	15,755

Stockholders’ equity was $15.8 million as of March 31, 2010, which was a decrease of $8.2 million from December 31, 2009. The decrease in stockholders’ equity was primarily attributable to the net loss of $8.7 million recorded in the first quarter of 2010. The net change in the fair value associated with the Corporation’s subordinated debenture resulted in a valuation gain, as recorded in the consolidated statement of income, of $501,000 in the first quarter of 2010, and a cumulative gain of $10.7 million, from inception in 2007. The valuation of this single instrument was a significant part of the Corporation’s equity at March 31, 2010. Partially offsetting the reduction in equity from the net loss was the successful issuance of Series B preferred stock for $499,000. Cash dividends paid on the Corporation’s Series A and B preferred stock decreased equity by $136,000 in the first quarter of 2010. The expense and corresponding increase in equity from the compensation expense for stock options awarded was $28,000. The continued low interest rate environment and the quality of the investment portfolio resulted in an increased market value of the available for sale investment securities portfolio and the resulting increase in accumulated other comprehensive income of $64,000 for the first quarter of 2010.

Quantitative measures established by regulation require the Corporation and the Bank to maintain minimum amounts and ratios of Tier I capital and total capital (as defined in the regulations) to risk-weighted assets. The Corporation and the Bank are also subject to a minimum Tier I leverage ratio expressed as a percentage of quarterly average assets (as defined). The Corporation is further subject to leverage ratios consisting of primary capital and total capital as a percentage of assets at period end. The Corporation and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items. Capital amounts and classifications are also subject to qualitative judgments about components, risk weightings, and other factors in which the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements. The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent the overall financial condition of the Corporation or the Bank. As an undercapitalized Bank regulatory approval is required to accept or renew brokered deposits. In addition, the Bank is subject to significant restrictions on capital distributions, asset growth, acquisitions, new activities, new branches, and management fees. The Bank is also required to file a written capital restoration plan with the FDIC by June 14, 2010.

Preferred Stock Issuance

In December 2009 and January 2010, we raised a total of $4.7 million in capital through the sale of Series B cumulative convertible perpetual preferred stock. The Series B preferred stock can be converted into common stock of the Corporation at any time by the holders, or by the Corporation under certain circumstances, at an initial conversion price of $8.00 per share of common stock, subject to adjustment and certain limitations, as described below. A warrant to purchase shares of the Corporation’s common stock is attached to each share of Series B preferred stock. Each warrant represents the right of the holder to purchase 20 shares of the Corporation’s common stock at a purchase price of $5.00 per common share and is exercisable for ten years. Dividends on the Series B preferred stock are payable quarterly in

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

arrears at a rate of 5.00% per annum, if and when declared by the Corporation’s Board of Directors. Dividends on the Series B preferred shares are cumulative. On or after August 1, 2010, the Series B preferred stock will be subject to mandatory conversion into common stock under certain circumstances, including the Corporation’s stock price trading at or above $10.00 per share, subject to adjustment.

In December 2008 and February 2009, the Corporation raised a total of $3.55 million in capital through the sale of Series A noncumulative convertible perpetual preferred stock. The Series A preferred stock can be converted into common stock of the Corporation at any time by the holders, or by the Corporation under certain circumstances, at an initial conversion price of $10.00 per share of common stock, subject to adjustment and certain limitations as described below. Dividends on the Series A preferred stock are payable quarterly in arrears at a rate of 12.00% per annum, if and when declared by the Corporation’s Board of Directors and are not cumulative. The Series A preferred stock is subject to mandatory conversion into common stock under certain circumstances, including the Corporation’s stock price trading at or above $11.00 per share, subject to adjustment.

Net Interest Income

Net interest income before the provision for loan losses for the first quarter of 2010 was $2.7 million, compared to $2.8 million for the first quarter of 2009. Net interest margin decreased slightly from 2.21% in the first quarter of 2009 to 2.19% in the first quarter of 2010. Significantly affecting net interest income and net interest margin in the first quarter of 2010 was on average $63.8 million of cash and due from banks and federal funds sold, which we maintained at a high level, earning a very low rate of interest, due to our inability to accept or renew brokered deposits.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

The following table shows the dollar amount of changes in net interest income for each major category of interest earning asset and interest bearing liability, and the amount of change attributable to changes in average balances (volume) or average rates for the periods shown. Variances that are jointly attributable to both volume and rate changes have been allocated to the volume component.

		Three Months Ended
		March 31, 2010 vs. 2009
						Increase (Decrease)
						Due to Changes In
						Volume
		Total				and Both				Rate
		(In thousands)
Earning Assets — Interest Income:
Loans		$	(391	)		$	(242	)		$	(149	)
Securities, including trading			(539	)			(224	)			(315	)
Federal funds sold			16				16				—
Total			(914	)			(450	)			(464	)
Deposits and Borrowed Funds — Interest Expense:
NOW and money market accounts			(18	)			7				(25	)
Savings deposits			(3	)			(1	)			(2	)
Time deposits			(388	)			320				(708	)
FHLB advances and repurchase agreements			(387	)			(401	)			14
Subordinated debentures			9				(245	)			254
Total			(787	)			(320	)			(467	)
Net Interest Income		$	(127	)		$	(130	)		$	3

The average yield earned on interest earning assets for the first quarter of 2010 was 5.22% compared to 5.67% for the first quarter of 2009. The average yield earned on the total loan portfolio, which contains both loans held for sale and investment, for 2009 was 5.87% compared to 6.01% during the first quarter of 2009. The overall decrease in the loan portfolio yield was attributable to continued restructuring of loans at lower than market rates, coupled with the effect of the reversal of interest income on nonaccruing loans. The commercial, commercial real estate and home equity line loans that repriced with prime interest rate changes totaled approximately $115.0 million at March 31, 2010.

The average rate paid on interest bearing liabilities for the first quarter of 2010 was 3.11% compared to 3.82% in the first quarter of 2009. The decrease in average rate was due to the overall decline in the rate paid on interest bearing liabilities, primarily as the result of continued extremely low market rates. The decrease in the average rate for NOW and money market accounts for the first quarter of 2010 was primarily attributable to the drop in short term interest rates, with the average rate moving to 0.63% during the first quarter of 2010 from 0.90% in the first quarter of 2009. The average rate paid on savings also decreased, moving to 0.62% for the first quarter of 2010 from 0.72% in the first quarter of 2009. The rate paid on the total time deposit portfolio decreased to 2.87% for the first quarter of 2010, from 3.91% for the same time period in 2009 also due to the decrease in short term interest rates. The rate paid on FHLB advances and repurchase agreements remained relatively unchanged at 4.13% in the first quarter of 2010 from 4.09% in the first quarter of 2009 and had the least rate movement of interest bearing liabilities as many of FHLB advance instruments have relatively long maturities. The average rate paid on the subordinated debenture remained unchanged at 6.71%. The yield on the subordinated debenture is calculated based on the original face amount of the obligation versus the fair value of the instrument recorded under fair value.

COMMUNITY CENTRAL BANK CORPORATION
FORM 10-Q (continued)

Average Balance Sheet

The following tables show the Corporation’s consolidated average balances of assets, liabilities, and stockholders’ equity, the amount of interest income or interest expense and the average yield or rate for each major category of interest earning asset and interest bearing liability, and the net interest margin for the three month periods ended March 31, 2010 and 2009. Average loans are presented net of unearned income, gross of the allowance for loan losses. Interest on loans includes loan fees.

		Three Months Ended March 31,
		2010												2009
										Average												Average
						Interest				Rate								Interest				Rate
		Average				Income/				Earned/				Average				Income/				Earned/
		Balance				Expense				Paid				Balance				Expense				Paid
		(In thousands)
Assets
Loans		$	405,686				5,869				5.87	%		$	422,274			$	6,260				6.01	%
Securities			65,132				513				3.15	%			93,430				1,052				4.50	%
Federal funds sold			26,024				22				0.34	%			7,023				6				0.35	%
Total Earning Assets / Total Interest Income / Average Yield			496,842				6,404				5.22	%			522,727				7,318				5.67	%
Cash and due from banks			37,767												11,845
All other assets			26,250												25,803
Total Assets		$	560,859											$	560,375
Liabilities & Stockholders’ Equity
NOW and money market accounts		$	42,211				66				0.63	%		$	37,977				84				0.90	%
Savings deposits			9,095				14				0.62	%			9,544				17				0.72	%
Time deposits			320,191				2,264				2.87	%			275,309				2,652				3.91	%
FHLB advances and repurchase agreements			104,859				1,068				4.13	%			144,150				1,455				4.09	%
ESOP Loan			—				—				—				0				0				0.00	%
Subordinated debentures			8,360				311				15.09	%			12,317				302				9.80	%
Total Interest Bearing Liabilities/ Total Interest Expense / Average Interest Rate Spread			484,716				3,723				3.11	%			479,297				4,510				3.82	%
Noninterest bearing deposits			49,230												42,641
All other liabilities			3,288												3,454
Stockholders’ equity			23,625												34,983
Total Liabilities & Equity		$	560,859											$	560,375
Net Interest Income						$	2,681											$	2,808
Net interest rate spread											2.11	%											1.85	%
Net Interest Margin (Net Interest Income / Total Earning Assets)											2.18	%											2.17	%
Net Interest Margin (fully taxable equivalent)											2.19	%											2.21	%