U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2002
Commission File Number 00-22246
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COMMERCIAL BANKSHARES, INC.
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(Exact name of Registrant as specified in its charter)
FLORIDA 65-0050176
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1550 S.W. 57th Avenue, Miami, Florida 33144
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(Address of principal executive offices) (Zip Code)
(305) 267-1200
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(Registrant's Telephone Number, including area code)
Indicate by check mark whether the Registrant (1) has 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 X No .
--- ---
CLASS OUTSTANDING AT August 9, 2002
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COMMON STOCK, $.08 PAR VALUE 3,636,055 SHARES
TABLE OF CONTENTS
PART I Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 10
PART II Item 6. Exhibits and Reports on Form 8-K 12
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS
COMMERCIAL BANKSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2002 and December 31, 2001
(Dollars in thousands, except share data)
6/30/2002 12/31/2001
--------- ----------
Assets: (Unaudited)
Cash and due from banks $ 23,008 $ 21,420
Federal funds sold 47,700 46,780
-------- --------
Total cash and cash equivalents 70,708 68,200
Investment securities available for sale,
at fair value (cost of $117,993 in 2002
and $107,126 in 2001) 123,980 111,138
Investment securities held to maturity,
at cost (fair value of $44,037 in 2002
and $25,332 in 2001) 43,017 24,664
Loans, net 355,196 346,251
Premises and equipment, net 12,566 12,554
Accrued interest receivable 3,410 2,790
Goodwill, net 253 253
Other assets 3,711 3,078
-------- --------
Total assets $612,841 $568,928
======== ========
Liabilities and stockholders' equity:
Deposits:
Demand $ 95,975 $ 94,453
Interest-bearing checking 66,215 65,630
Money market accounts 55,772 51,958
Savings 26,784 24,896
Time 244,194 225,569
-------- --------
Total deposits 488,940 462,506
Securities sold under agreements
to repurchase 64,585 53,436
Accrued interest payable 549 633
Accounts payable and accrued liabilities 4,321 2,228
-------- --------
Total liabilities 558,395 518,803
-------- --------
Stockholders' equity:
Common stock, $.08 par value, 6,250,000
Authorized shares, 3,990,531 issued
(3,962,440 in 2001) 318 316
Additional paid-in capital 44,455 44,041
Retained earnings 12,487 9,786
Accumulated other comprehensive income 3,930 2,686
Treasury stock, 354,177 shares
(352,571 in 2001), at cost (6,744) (6,704)
-------- --------
Total stockholders' equity 54,446 50,125
-------- --------
Total liabilities
and stockholders' equity $612,841 $568,928
======== ========
The accompanying notes are an integral part of these
condensed consolidated financial statements
COMMERCIAL BANKSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the three months ended June 30, 2002 and 2001
(Dollars in thousands, except share data)
(Unaudited)
2002 2001
Interest income: ---- ----
Interest and fees on loans $6,358 $6,959
Interest on investment securities 2,542 2,375
Interest on federal funds sold 118 245
------ ------
Total interest income 9,018 9,579
------ ------
Interest expense:
Interest on deposits 2,535 3,844
Interest on securities sold under
agreements to repurchase 263 597
------ ------
Total interest expense 2,798 4,441
------ ------
Net interest income 6,220 5,138
Provision for loan losses 75 100
------ ------
Net interest income after provision 6,145 5,038
------ ------
Non-interest income:
Service charges on deposit accounts 647 671
Other fees and service charges 151 166
Securities losses (7) -
------ ------
Total non-interest income 791 837
------ ------
Non-interest expense:
Salaries and employee benefits 2,317 2,080
Occupancy 320 301
Data processing 272 253
Furniture and equipment 191 186
Insurance 85 54
Stationery and supplies 66 62
Administrative service charges 60 59
Telephone and fax 55 59
Amortization - 41
Other 320 325
------ ------
Total non-interest expense 3,686 3,420
------ ------
Income before income taxes 3,250 2,455
Provision for income taxes 978 708
------ ------
Net income $2,272 $1,747
====== ======
Earnings per common and common equivalent share:
Basic $.63 $.48
Diluted $.60 $.47
Weighted average number of shares and common equivalent shares:
Basic 3,623,097 3,609,027
Diluted 3,803,550 3,715,044
The accompanying notes are an integral part of these
condensed consolidated financial statements
COMMERCIAL BANKSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30, 2002 and 2001
(Dollars in thousands, except share data)
(Unaudited)
2002 2001
Interest income: ---- ----
Interest and fees on loans $12,771 $13,460
Interest on investment securities 4,716 5,011
Interest on federal funds sold 267 527
------- -------
Total interest income 17,754 18,998
------- -------
Interest expense:
Interest on deposits 5,210 7,736
Interest on securities sold under
areements to repurchase 489 1,232
------- -------
Total interest expense 5,699 8,968
------- -------
Net interest income 12,055 10,030
Provision for loan losses 150 175
------- -------
Net interest income after provision 11,905 9,855
------- -------
Non-interest income:
Service charges on deposit accounts 1,314 1,308
Other fees and service charges 292 289
Securities gains 33 -
------- -------
Total non-interest income 1,639 1,597
------- -------
Non-interest expense:
Salaries and employee benefits 4,675 4,168
Occupancy 619 598
Data processing 585 494
Furniture and equipment 366 374
Insurance 165 107
Stationery and supplies 131 136
Administrative service charges 114 113
Telephone and fax 111 114
Amortization - 81
Other 655 540
------- -------
Total non-interest expense 7,421 6,725
------- -------
Income before income taxes 6,123 4,727
Provision for income taxes 1,827 1,344
------- -------
Net income $ 4,296 $ 3,383
======= =======
Earnings per common and common equivalent share:
Basic $1.19 $.94
Diluted $1.14 $.91
Weighted average number of shares and common equivalent shares:
Basic 3,617,867 3,605,697
Diluted 3,782,338 3,703,844
The accompanying notes are an integral part of these
condensed consolidated financial statements
COMMERCIAL BANKSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three and six months ended June 30, 2002 and 2001
(In thousands)
(Unaudited)
Three months ended
June 30,
2002 2001
---- ----
Net income $2,272 $1,747
Other comprehensive income, net of tax:
Unrealized holding gains arising
during the period 1,712 10
Reclassification adjustment for losses
realized in net income 4 -
------ ------
Other comprehensive income 1,716 10
------ ------
Comprehensive income $3,988 $1,757
====== ======
Six months ended
June 30,
2002 2001
---- ----
Net income $4,296 $3,383
Other comprehensive income, net of tax:
Unrealized holding gains arising
during the period 1,265 1,074
Reclassification adjustment for gains
realized in net income (21) -
Cumulative effect of a change in
accounting principle for reclassification
of securities upon adoption of FAS133 - 114
------ ------
Other comprehensive income 1,244 1,188
------ ------
Comprehensive income $5,540 $4,571
====== ======
The accompanying notes are an integral part of these
condensed consolidated financial statements
COMMERCIAL BANKSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2002 and 2001
(In thousands)
(Unaudited)
2002 2001
---- ----
Cash flows from operating activities:
Net income $ 4,296 $ 3,383
Adjustments to reconcile net income
to net cash provided by operating activities:
Provision for loan losses 150 175
Depreciation, amortization and accretion, net 321 476
Gain on sale of investment securities (33) -
Gain on sale of premises and equipment (1) -
Change in accrued interest receivable (620) 753
Change in other assets (633) 906
Change in accounts payable and
accrued liabilities 1,321 (375)
Change in accrued interest payable (84) (105)
------- -------
Net cash provided by operating activities 4,717 5,213
------- -------
Cash flows from investing activities:
Proceeds from maturities of investment
Securities held to maturity 16,690 3,488
Proceeds from maturities and sales of
Investment securities available for sale 27,816 53,296
Purchases of investment securities
held to maturity (36,286) -
Purchases of investment securities
available for sale (37,438) (22,186)
Net change in loans (9,095) (55,659)
Purchases of premises and equipment (303) (153)
Sales of premises and equipment 1 -
------- -------
Net cash used in investing activities (38,615) (21,214)
------- -------
Cash flows from financing activities:
Net change in deposits 26,434 23,441
Net change in securities sold under
agreements to repurchase 11,149 944
Dividends paid (1,553) (1,441)
Proceeds from issuance of stock 416 120
Purchase of treasury stock (40) (9)
------- -------
Net cash provided by financing activities 36,406 23,055
------- -------
Increase in cash and cash equivalents 2,508 7,054
Cash and cash equivalents at beginning
of period 68,200 35,015
------- -------
Cash and cash equivalents at end of period $70,708 $42,069
======= =======
Supplemental disclosures:
Interest paid (net of amounts credited
to deposit accounts) $ 863 $ 1,438
======= =======
Income taxes paid $ 1,948 $ 1,330
======= =======
The accompanying notes are an integral part of these
condensed consolidated financial statements
COMMERCIAL BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. INTERIM FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial
statements, which are for interim periods, do not include
all disclosures provided in the annual consolidated financial
statements. These financial statements and the footnotes
thereto should be read in conjunction with the annual
consolidated financial statements for the years ended
December 31, 2001, 2000, and 1999 for Commercial
Bankshares, Inc. (the "Company").
All material intercompany balances and transactions have been
eliminated.
In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all
adjustments necessary for a fair presentation of the
financial statements. Those adjustments are of a normal
recurring nature. The results of operations for the six
month period ended June 30, 2002, are not necessarily
indicative of the results to be expected for the full year.
2. PER SHARE DATA
Earnings per share have been computed by dividing net income
by the weighted average number of common shares (basic earnings
per share) and by the weighted average number of common shares
plus dilutive common share equivalents outstanding (diluted
earnings per share). Common stock equivalents include the
effect of all outstanding stock options, using the treasury
stock method.
The following tables reconcile the weighted average shares used
to calculate basic and diluted earnings per share (in thousands,
except per share amounts):
Three Months Ended Three Months Ended
June 30, 2002 June 30, 2001
------------------------------- -------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator)(Denominator) Amount (Numerator)(Denominator) Amount
--------- ----------- ------ --------- ----------- ------
Basic EPS
$2,272 3,623 $.63 $1,747 3,609 $.48
Effect of
Dilutive
Options
- 181 (.03) - 106 (.01)
------ ----- ---- ------ ----- ----
Diluted EPS
$2,272 3,804 $.60 $1,747 3,715 $.47
====== ===== ==== ====== ===== ====
Six Months Ended Six Months Ended
June 30, 2002 June 30, 2001
------------------------------- -------------------------------
Income Shares Per-Share Income Shares Per-Share
(Numerator)(Denominator) Amount (Numerator)(Denominator) Amount
--------- ----------- ------ --------- ----------- ------
Basic EPS
$4,296 3,618 $1.19 $3,383 3,606 $.94
Effect of
Dilutive
Options
- 164 (.05) - 98 (.03)
------ ----- ----- ------ ----- ----
Diluted EPS
$4,296 3,782 $1.14 $3,383 3,704 $.91
====== ===== ===== ====== ===== ====
3. NEW ACCOUNTING PRONOUNCEMENTS
SFAS NO. 142: "Goodwill and Other Intangible Assets"
In June 2001, the FASB issued SFAS No. 142, "Goodwill and other
Intangible Assets." This statement addresses how intangible
assets that are acquired individually or with a group of other
assets (but not those acquired in a business combination)
should be accounted for in financial statements upon their
acquisition. This statement also addresses how goodwill and
other intangible assets should be accounted for after they have
been initially recognized in the financial statements. Except
for goodwill and intangible assets acquired after June 30, 2001,
which are immediately subject to its provision, SFAS No. 142
is effective starting with fiscal years beginning after December
15, 2001.
The provisions of SFAS No. 142 no longer allow the amortization
of goodwill, and certain intangible assets that have indefinite
useful lives, and requires that impairment of goodwill on those
assets be tested annually. In addition, SFAS No. 142 requires
the following additional disclosures for goodwill and other
intangible assets:
Changes in the carrying amount of goodwill from period-to-
period;
The carrying amount of goodwill by major intangible assets
class, and
The estimated intangible amortization for the next five years
The Company adopted SFAS No. 142 effective January 1, 2002. The
Company did not incur impairment losses for goodwill resulting
from a transitional impairment test. The elimination of goodwill
amortization will positively impact pre-tax net income by
approximately $160,000 in 2002.
SFAS No. 144: "Accounting for the Impairment or Disposal of
Long-Lived Assets"
In October 2001, the FASB issued SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." SAFS No. 144
is effective for fiscal years beginning after December 15,
2001 and was written to provide a single model for the disposal
of long-lived assets. SFAS No. 144 supersedes SFAS No. 121
"Accounting for Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" and the accounting and reporting
provision of Accounting principles Board Opinion No. 30,
"Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions."
The Company adopted the provision of SFAS No. 144 effective
January 1, 2002. The implementation of this statement has not
had a material effect on the Company's financial position,
results of operations or cash flows.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's net income reported for the quarter ended June 30,
2002, was $2.27 million, a 30% increase over the quarter ended
June 30, 2001 of $1.75 million. Basic and diluted earnings per
share were $.63 and $.60, respectively, for the second quarter
of 2002, as compared to $.48 and $.47, respectively, for the
second quarter of 2001.
For the six months ended June 30, 2002, the Company's net income
was $4.30 million, a 27% increase over the six months ended
June 30, 2001 of $3.38 million. Basic and diluted earnings per
share were $1.19 and $1.14, respectively, for the six months
ended June 30, 2002 as compared to $.94 and $.91, respectively,
for the six months ended June 30, 2001.
The Company's second quarter tax-equivalent net interest
income increased to $6.52 million, from $5.39 million in the
corresponding quarter in 2001. The increase is due primarily to
an increase in average earning assets of $48 million and to a
higher net interest yield in 2002. The annualized net interest
yield for the quarter and six months ended June 30, 2002 was
4.66% and 4.62%, respectively. This compares to 4.21% and 4.23%
for the quarter and six months ended June 30, 2001. The net
interest yield has been calculated on a tax-equivalent basis,
which includes an adjustment for interest on tax-exempt securities.
Non-interest income for the second quarter of 2002 decreased by
$46,000, or 6%, and increased by $42,000 or 3% for the first
six months of 2002, from the corresponding periods of 2001. The
decrease in quarter activity is primarily due to a decrease
in account overdraft activity charges of $39,000. The increase
in year to date activity is due to a net gain on sale of
investments of $33,000.
Salaries and employee benefits expense increased by $237,000, or
11%, for the second quarter of 2002, and by $507,000, or 12%, for
the first six months of 2002, from the corresponding periods of
2001. The increase is attributable to normal payroll increases
and increased benefit costs.
Data processing expense increased by $19,000, or 8%, for the
second quarter of 2002, and by $91,000, or 18%, for the first
six months of 2002, as compared to the corresponding periods
in 2001. The increase is attributable to an increase in the
number of accounts processed and to an increase in rates from
the Company's service provider.
Company management continually reviews and evaluates the
allowance for loan losses. In evaluating the adequacy of the
allowance for loan losses, management considers the results of
its methodology, along with other factors such as the amount of
non-performing loans and the economic conditions affecting the
Company's markets and customers. The allowance for loan losses
was approximately $4.73 million at June 30, 2002, as compared
with $4.64 million at December 31, 2001. For the six months
ended June 30, 2002, the allowance for loan losses was
increased by the provision for loan losses of $150,000, and
decreased by approximately $60,000 in net charge-offs. For the
six months ended June 30, 2001, the allowance was increased
with a provision for loan losses of $175,000 and decreased by
approximately $29,000 in net charge-offs. The allowance as a
percentage of total loans has decreased to 1.31% at June 30, 2002,
from 1.32% at December 31, 2001. Based on the nature of the loan
portfolio and prevailing economic factors, management believes
that the current level of the allowance for loan losses is
sufficient to absorb probable losses in the loan portfolio.
Approximately $221 million, or 61%, of total loans was secured
by nonresidential real estate, and $80.0 million, or 22%, of
total loans was secured by residential real estate as of June
30, 2002. Virtually all loans are within the Company's markets
in Miami-Dade and Broward counties.
The Company had no non-accrual loans at June 30, 2002.
LIQUIDITY AND CAPITAL RESOURCES
The objective of liquidity management is to maintain cash flow
requirements to meet immediate and ongoing future needs for
loan demand, deposit withdrawals, maturing liabilities, and
expenses. In evaluating actual and anticipated needs, management
seeks to obtain funds at the most economical cost. Management
believes that the level of liquidity is sufficient to meet
future funding requirements.
For banks, liquidity represents the ability to meet both loan
commitments and withdrawals of deposited funds. Funds to meet
these needs can be obtained by converting liquid assets to
cash or by attracting new deposits or other sources of funding.
Many factors affect a bank's ability to meet liquidity needs.
Commercial Bank of Florida's (the Bank) principal sources of
funds are deposits, repurchase agreements, payments on loans,
maturities and sales of investments. As an additional source of
funds, the Bank has credit availability with the Federal Home
Loan Bank amounting to $91 million, and Federal Funds
purchased lines available at correspondent banks amounting to
$23 million as of June 30, 2002.
The Bank's primary use of funds is to originate loans and
purchase investment securities. Loans increased by $9.1 million,
and the Bank purchased $73.7 million of investment securities
during the first six months of 2002. Funding for the above
came primarily from increases in deposits of $26.4 million,
increases in securities sold under agreements to repurchase of
$11.1 million and from proceeds from maturities and sales
of investment securities of $44.5 million.
In accordance with risk-based capital guidelines issued by the
Federal Reserve Board, the Company and the Bank are each
required to maintain a minimum ratio of total capital to risk
weighted assets of 8%. Additionally, all bank holding companies
and member banks must maintain "core" or "Tier 1" capital of at
least 3% of total assets ("leverage ratio"). Member banks
operating at or near the 3% capital level are expected to
have well diversified risks, including no undue interest rate
risk exposure, excellent control systems, good earnings, high
asset quality, high liquidity, and well managed on- and off-
balance sheet activities, and in general be considered
strong banking organizations with a composite 1 rating under the
CAMELS rating system of banks. For all but the most highly
rated banks meeting the above conditions, the minimum leverage
ratio is to be 3% plus an additional 100 to 200 basis points.
The Tier 1 Capital, Total Capital, and Leverage Ratios of the
Company were 12.35%, 13.84%, and 8.17%, respectively, as of
June 30, 2002.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
ASSET/LIABILITY MANAGEMENT AND INTEREST RATE RISK
Changes in interest rates can substantially impact the Company's
long-term profitability and current income. An important part of
management's efforts to maintain long-term profitability is the
management of interest rate risk. The goal is to maximize net
interest income within acceptable levels of interest rate risk
and liquidity. Interest rate exposure is managed by
monitoring the relationship between interest-earning assets
and interest-bearing liabilities, focusing on the size, maturity
or repricing date, rate of return and degree of risk. The
Asset/Liability Management Committee of the Bank oversees
the interest rate risk management and reviews the Bank's
asset/liability structure on a quarterly basis.
The Bank uses interest rate sensitivity, or GAP analysis to
monitor the amount and timing of balances exposed to changes
in interest rates. The GAP analysis is not relied upon
solely to determine future reactions to interest rate changes
because it is presented at one point in time and could change
significantly from day-to-day. Other methods such as simulation
analysis are utilized in evaluating the Bank's interest rate
risk position. The table presented below shows the Bank's
GAP analysis at June 30, 2002.
INTEREST RATE SENSITIVITY ANALYSIS
(Dollars in Thousands)
Term to Repricing
-----------------
Over 1 Year
90 Days 91-181 182-365 & Non-rate
or Less Days Days Sensitive Total
------- ------ ------- ----------- -----
Interest-earning assets:
Federal funds sold
$ 47,700 $ - $ - $ - $ 47,700
Investment securities
21,103 7,456 28,008 107,423 163,990
Gross loans
(excluding non-accrual)
79,178 27,349 55,701 198,362 360,590
------- ------- ------- -------- --------
Total interest-
earning assets
$147,981 $34,805 $83,709 $305,785 $572,280
-------- ------- ------- -------- --------
Interest-bearing liabilities:
Interest-bearing checking
$ - $ - $ - $ 66,215 $ 66,215
Money market
- 13,943 13,943 27,886 55,772
Savings
- - - 26,784 26,784
Time deposits
76,572 52,194 60,462 54,966 244,194
Borrowed funds
66,640 - - - 66,640
-------- ------- ------- -------- --------
Total interest-bearing
liabilities $143,212 $66,137 $74,405 $175,851 $459,605
-------- ------- ------- -------- --------
Interest sensitivity gap
$ 4,769 ($31,332) $ 9,304 $129,934 $112,675
Cumulative gap $ 4,769 ($26,563)($17,259) $112,675
Cumulative ratio of interest-
earning assets to interest-
bearing liabilities
103% 87% 94% 125%
Cumulative gap as a percentage
of total interest-
earning assets .8% (4.6%) (3.0%) 19.7%
Management's assumptions reflect the Bank's estimate of the
anticipated repricing sensitivity of non-maturity deposit
products. Interest-bearing checking and savings accounts have
been allocated to the "over 1 year" category, and money market
accounts 25% to the "91-181 days" category, 25% to the
"182-365 days" category, and 50% to the "over 1 year" category.
The Bank uses simulation analysis to quantify the effects of
various immediate parallel shifts in interest rates on net
interest income over the next 12 month period. Such a "rate
shock" analysis requires key assumptions which are inherently
uncertain, such as deposit sensitivity, cash flows from
investments and loans, reinvestment options, management's
capital plans, market conditions, and the timing, magnitude
and frequency of interest rate changes. As a result, the
simulation is only a best-estimate and cannot accurately predict
the impact of the future interest rate changes on net income.
As of June 30, 2002, the Bank's simulation analysis projects an
increase to net interest income of 5.78%, assuming an immediate
parallel shift downward in interest rates by 200 basis points.
If rates rise by 200 basis points, the simulation analysis
projects net interest income would decrease by 5.97%. These
projected levels are within the Bank's policy limits.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Certification Pursuant to 18 U.S.C. Section 1350, As
Adopted Pursuant To Section 906 of the Sarbanes-Oxley
Act of 2002
In connection with the Quarterly Report of Commercial
Bankshares, Inc., (the "Company") on Form 10-Q for the
period ending June 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"),
I, Joseph W. Armaly, Chief Executive Officer of the Company,
certify, pursuant to 18. U.S.C. Section 906 of the
Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirement of
section 13(a) or 15(d), as applicable of the Securities
Exchange Act of 1934, as amended; and
2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Company.
/s/ Joseph W. Armaly
-----------------------
Joseph W. Armaly
Chief Executive Officer
August 12, 2002
In connection with the Quarterly Report of Commercial
Bankshares, Inc., (the "Company") on Form 10-Q for the
period ending June 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"),
I, Barbara E. Reed, Chief Financial Officer of the Company,
certify, pursuant to 18. U.S.C. Section 906 of the
Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirement of
section 13(a) or 15(d), as applicable of the
Securities Exchange Act of 1934, as amended; and
2) The information contained in the Report fairly
presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ Barbara E. Reed
-----------------------
Barbara E. Reed
Chief Financial Officer
August 12, 2002
(b) Reports on Form 8-K
Form 8-K was filed during the quarter ended June 30, 2002
to announce the extension of a stock repurchase plan
whereby up to $4 million can be used to buy shares
of Commercial Bankshares, Inc. common stock in open
market and negotiated transactions during the next 24 months.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Commercial Bankshares, Inc.
---------------------------
(Registrant)
/s/ Barbara E. Reed
-----------------------
Barbara E. Reed
Senior Vice President &
Chief Financial Officer
Date: August 12, 2002
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