United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2004
_________________
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 33-67254
Commercial Bankshares, Inc.
______________________________________________________
(Exact name of registrant as specified in its charter)
Florida 65-0050176
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1550 S.W. 57th Avenue, Miami, Florida 33144
________________________________________ __________
(Address of principal executive offices) (Zip Code)
(305) 267-1200
____________________________________________________
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
None None
_____________________ ___________________________________________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.08 per share
______________________________________
(Title of class)
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 past 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
_____ _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes X No
_____ _____
As of February 28, 2005, 5,955,460 shares of the common voting stock were
issued and outstanding, with an aggregate market value of $238 million,
based on the closing price on the NASDAQ market.
Documents Incorporated by Reference
1. Certain portions of the Annual Report to Shareholders of Commercial
Bankshares, Inc., for fiscal year ended December 31, 2004 are incorporated
by reference into Part I and Part II.
2. Certain portions of the Company's Proxy Statement for the Annual Meeting
of Shareholders to be held on April 21, 2005 are incorporated by reference
into Part III.
Table of Contents
Description Page No.
___________ ________
Part I
Item 1. Business....................................................1
Item 2. Properties..................................................7
Item 3. Legal Proceedings...........................................8
Item 4. Submission of Matters to a Vote of Security Holders.........8
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities...........8
Item 6. Selected Financial Data.....................................8
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.........................8
Item 7A. Quantitative and Qualitative Disclosures About Market Risk..8
Item 8. Financial Statements and Supplementary Data.................8
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.........................8
Item 9A. Report of Management on Internal Control Over
Financial Reporting.........................................9
Item 9B. Other Information...........................................9
Part III
Item 10. Directors and Executive Officers of the Registrant..........9
Item 11. Executive Compensation......................................9
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters..................9
Item 13. Certain Relationships and Related Transactions..............9
Item 14. Principal Accountant Fees and Services .....................9
Part IV
Item 15. Exhibits and Financial Statement Schedules.................10
Signatures..............................................................12
Exhibit 13.1 Commercial Bankshares, Inc. 2004 Annual Report...........13
Exhibit 21.1 Subsidiaries of Commercial Bankshares, Inc...............13
Exhibit 23.1 Consent of Independent Registered Certified Public
Accountants..............................................13
Exhibit 31.1 Certification of Chief Executive Officer Pursuant
to Rule 15A-14(A) or 15D-14(A) of the Securities
Exchange Act of 1934, As Adopted Pursuant To Section
302 of the Sarbanes-Oxley Act of 2002....................14
Exhibit 31.2 Certification of Chief Financial Officer Pursuant
to Rule 15A-14(A) or 15D-14(A) of the Securities
Exchange Act of 1934, As Adopted Pursuant To Section
302 of the Sarbanes-Oxley Act of 2002....................15
Exhibit 32.1 Certification of Chief Executive Officer Pursuant
to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.
Section 1350, As Adopted Pursuant To Section 906
of the Sarbanes-Oxley Act of 2002........................16
Exhibit 32.2 Certification of Chief Financial Officer Pursuant
to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.
Section 1350, As Adopted Pursuant To Section 906
of the Sarbanes-Oxley Act of 2002........................16
PART I
Item 1. Business.
Commercial Bankshares, Inc.
Commercial Bankshares, Inc. (the "Company"), a Florida corporation
organized in 1988, is a bank holding company registered under the Bank
Holding Company Act of 1956 ("BHCA"), as amended, whose wholly-owned
subsidiary and principal asset is the Commercial Bank of Florida, (the
"Bank"). The Company, through its ownership of the Bank, is engaged in a
commercial banking business, and its primary source of earnings is derived
from income generated by its ownership and operation of the Bank. Unless
the context otherwise requires, references herein to the Company include the
Company and its wholly-owned subsidiary, the Bank, on a consolidated basis.
The Company is a legal entity separate and distinct from the Bank, and
there are various legal limitations on the ability of the Bank to finance or
otherwise supply funds to the Company. In particular, under federal banking
law, the Bank may not declare a dividend that exceeds undivided profits. In
addition, the approval of the Federal Reserve Bank of Atlanta ("Atlanta FRB")
and the Florida Department of Banking and Finance is required if the total
amount of all dividends declared in any calendar year exceeds the Bank's net
profits, as defined, for that year combined with its retained net profits for
the preceding two years. The Atlanta FRB also has the authority to limit
further the payment of dividends by the Bank under certain circumstances.
In addition, federal banking laws prohibit or restrict the Bank from extending
credit to the Company under certain circumstances.
Commercial Bank of Florida
The Bank is a Florida chartered banking corporation originally
chartered in February, 1979. It operated as Sunset Commercial Bank until
its acquisition by the Company in 1988, at which time its name was changed
to Commercial Bank of Florida. The Bank engages in commercial banking and
related businesses from its fourteen banking facilities: its main office
and nine other offices located in Miami-Dade County, Florida, and four
offices in Broward County, Florida.
The Bank is operated as a network of community bank branches. The Bank
primarily focuses on providing personalized banking services to small
businesses and individuals within the market areas where its banking offices
are located. Management believes that this local market strategy, accompanied
by the strategic placement of Bank personnel within market areas where they
have served customers for many years, enables the Bank to attract and retain
low cost core deposits, which provide substantially all of the Bank's funding
requirements.
Deposit products include certificates of deposit, individual retirement
accounts ("IRAs") and other time deposits, checking and other demand deposit
accounts, NOW accounts, savings accounts, and money market accounts. The
transaction accounts and time certificates are tailored to the principal
market areas at rates competitive to those in the area. All deposit accounts
are insured by the Federal Deposit Insurance Corporation ("FDIC") up to the
maximum limits permitted by law. The Bank solicits these accounts from small
businesses, professional firms, and households located throughout its primary
market area.
The Bank also offers ATM cards with access to local, state, and national
networks, safe deposit boxes, wire transfers, direct deposit of payroll and
social security payments, and automatic drafts for various accounts. The
Bank presently does not provide fiduciary or appraisal services.
The Bank conducts commercial and consumer banking business, which
primarily consists of attracting deposits from the areas served by its
banking offices and using those deposits, together with funds derived from
other sources, to originate a variety of commercial, consumer, and real
estate loans (including commercial loans collateralized by real estate).
The Company considers the general business of retail banking to be its
only operating segment.
As is the case with banking institutions generally, the Bank's
operations are materially and significantly influenced by general economic
conditions and by related monetary and fiscal policies of financial
institution regulatory agencies, including the Federal Reserve Board ("FRB"),
the FDIC, and the State of Florida. Deposit flows and the cost of funds are
influenced by interest rates on competing investments and general market
rates of interest. Lending activities are affected by the demand for
financing of real estate and other types of loans, which in turn is affected
by the interest rates at which such financing may be offered and other
factors affecting local demand and availability of funds. The Bank faces
strong competition in the attraction of deposits (its primary source of
lendable funds) and in the origination of real estate loans.
1
Employees
At December 31, 2004, the Company and the Bank together employed 199
employees, of whom three are part-time. None of these employees is covered
by a collective bargaining agreement. The Company believes that its
employee relations are good.
Market Information
The Bank's fourteen banking offices are located in Miami-Dade and
Broward counties, which comprise the Bank's primary market area. Management
believes that the Bank's principal markets are: (i) the established and
expanding commercial market within the primary market area, and (ii) the
moderate and the affluent residential market within the primary market area.
Management also believes that the most profitable banking relationships are
characterized by high deposit balances with a low frequency of transactions.
Moreover, management believes that a community bank with local management
is well positioned to establish these relationships with the smaller
commercial customers and households. Management believes that the Bank is
well positioned to take advantage of its market segment.
Competition
Competition in the banking and financial services industry is intense.
In its primary market areas, the Bank competes with other commercial banks,
savings institutions, credit unions, finance companies, mutual funds,
insurance companies, and brokerage and investment banking firms operating
locally and elsewhere. Most of these competitors have substantially greater
resources and lending limits than the Bank and may offer certain services,
such as trust services, that the Bank does not provide at this time. In
addition many of the Company's non-bank competitors are not subject to the
same extensive federal regulations that govern the Bank and the Company.
The profitability of the Company depends upon the Bank's ability to compete
in its market areas.
Available Information
A copy of the Company's Annual Report on Form 10-K along with copies of
the Company's other periodic reports required to be filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended, are available free of charge (absent exhibits) from the Company
upon written request to Barbara E. Reed, Chief Financial Officer, Commercial
Bankshares, Inc. 1550 S.W. 57th Avenue Miami, Florida 33144. Copies of such
reports are also available electronically at the SEC's internet website
www.sec.gov, or via the Company's website at www.commercialbankfl.com.
Reference to the Company's website in this Annual Report on 10K does not in
any way incorporate information contained in such website into this report.
Supervision and Regulation
Bank holding companies and banks are extensively regulated under both
federal and state law. These laws and regulations are intended to protect
depositors, not stockholders. To the extent that the following information
describes statutory and regulatory provisions, it is qualified in its
entirety by reference to the particular statutory and regulatory provisions.
Any change in the applicable law or regulation may have a material effect
on the business and prospects of the Company and the Bank.
2
Bank Holding Company Regulation
_______________________________
As a bank holding company registered under the BHCA, the Company is
subject to the regulation and supervision of the FRB. The Company is
required to file with the FRB annual reports and other information regarding
its business operations and those of its subsidiaries. Under the BHCA, the
Company's activities and those of its subsidiaries are limited to banking,
managing or controlling banks, furnishing services to or performing services
for its subsidiaries, or engaging in any other activity which the FRB
determines to be so closely related to banking or managing or controlling
banks as to be properly incident thereto.
The BHCA requires, among other things, the prior approval of the FRB in
any case where a bank holding company proposes to (i) acquire all or
substantially all of the assets of any other bank, (ii) acquire direct or
indirect ownership or control of more than 5% of the outstanding voting
stock of any bank (unless it owns a majority of such bank's voting shares),
or (iii) merge or consolidate with any other bank holding company. The FRB
will not approve any acquisition, merger, or consolidation that would have a
substantially anti-competitive effect, unless the anti-competitive impact of
the proposed transaction is clearly outweighed by a greater public interest
in meeting the convenience and needs of the community to be served. The FRB
also considers capital adequacy and other financial and managerial resources
and future prospects of the companies and the banks concerned, together with
the convenience and needs of the community to be served, when reviewing
acquisitions or mergers.
Additionally, the BHCA prohibits a bank holding company, with certain
limited exceptions, from (i) acquiring or retaining direct or indirect
ownership or control of more than 5% of the outstanding voting stock of any
company which is not a bank or bank holding company, or (ii) engaging
directly or indirectly in activities other than those of banking, managing,
or controlling banks, or performing services for its subsidiaries, unless
such non-banking business is determined by the FRB to be so closely related
to banking or managing or controlling banks as to be properly incident
thereto. In making such determinations, the FRB is required to weigh the
expected benefits to the public, such as greater convenience, increased
competition, or gains in efficiency, against the possible adverse effects,
such as under-concentration of resources, decreased or unfair competition,
conflicts of interest, or unsound banking practices.
There are a number of obligations and restrictions imposed on bank
holding companies and their depository institution subsidiaries by law and
regulatory policy that are designed to minimize potential loss to the
depositors of such depository institutions and the FDIC insurance funds in
the event the depository institution becomes in danger of default or in
default. Under a policy of the FRB with respect to bank holding company
operations, a bank holding company is required to serve as a source of
financial strength to its subsidiary depository institutions and to commit
resources to support such institutions in circumstances where it might not
do so absent such policy. The FRB also has the authority under the BHCA to
require a bank holding company to terminate any activity or to relinquish
control of a nonbank subsidiary (other than a nonbank subsidiary of a
bank) upon the FRB's determination that such activity or control constitutes
a serious risk to the financial soundness and stability of any bank
subsidiary of the bank holding company.
Capital Adequacy Guidelines for Bank Holding Companies
______________________________________________________
The Company is subject to certain FRB risk-based capital guidelines for
bank holding companies. The risk-based capital guidelines are designed to
make regulatory capital requirements more sensitive to differences in risk
profiles among banks and bank holding companies, to account for off-balance
sheet exposure, and to minimize disincentives for holding liquid assets.
Under these guidelines, assets and off-balance sheet items are assigned to
broad risk categories, each with appropriate weights. The resulting capital
ratios represent capital as a percentage of total risk-weighted assets and
off-balance sheet items.
The minimum ratio of total capital to risk-weighted assets (including
certain off-balance sheet activities, such as standby letters of credit) is
8%. At least 4% of the total capital is required to be "Tier I Capital,"
which consists of common stockholders' equity, noncumulative perpetual
preferred stock, and a limited amount of cumulative perpetual preferred
stock, less certain goodwill items and the unrealized holding gain/loss on
available for sale securities. The remainder ("Tier II Capital") may
consist of (i) the allowance for loan losses of up to 1.25% of risk-weighted
risk assets, (ii) 45% of unrealized holding gain on available for sale
equity securities, (iii) excess of qualifying perpetual preferred stock,
(iv) hybrid capital instruments, (v) perpetual debt, (vi) mandatory
convertible securities, and (vii) subordinated debt and intermediate-term
preferred stock up to 50% of Tier I capital. Total capital is the sum of
Tier I and Tier II capital less reciprocal holdings of other banking
organizations' capital instruments, investments in unconsolidated
subsidiaries, and any other deductions as determined by the FRB (determined
on a case by case basis or as a matter of policy after formal rule-making).
3
Bank holding company assets are given risk-weights of 0%, 20%, 50% and
100%. In addition, certain off-balance sheet items are given similar credit
conversion factors to convert them to asset-equivalent amounts to which an
appropriate risk-weight will apply. These computations result in the total
risk-weighted assets.
The Company's management believes that the risk-weighting of assets
under current FRB guidelines does not and will not have a material impact
on the Company's operations or on the operations of the Bank. As of
December 31, 2004 and 2003, the Company's total risk-based capital ratios
were 14.18% and 13.87%, respectively. In addition to the risk-based capital
guidelines, the FRB has adopted a minimum Tier I capital (leverage) ratio,
under which a bank holding company must maintain a minimum level of Tier I
capital to total consolidated assets of at least 3% in the case of a bank
holding company that has the highest regulatory examination rating and is
not contemplating significant growth or expansion. All other bank holding
companies are expected to maintain a leverage ratio of at least 100 to 200
basis points above the stated minimum. Federal Reserve Board requirements
also provide that bank holding companies experiencing internal growth or
making acquisitions will be expected to maintain strong capital positions
substantially above regulatory minimums without significant reliance on
intangible assets. The Federal Reserve Board may continue to consider a
"tangible Tier 1 leverage ratio" (deducting all intangibles) in evaluating
proposals for expansion or new activities. As of December 31, 2004 and 2003,
the Company's leverage ratios were 7.87% and 7.78%, respectively.
Bank Regulation
_______________
The Bank is a state-chartered banking corporation and is subject to the
supervision of and regular examination by the FRB and the Florida Department
of Banking and Finance, as well as to the supervision of the FDIC.
The operations of the Bank are subject to state and federal statutes
applicable to banks which are members of the Federal Reserve System and to
the regulations of the FRB, the FDIC, and the State of Florida. Such
statutes and regulations relate to required reserves against deposits,
investments, loans, mergers and consolidations, issuance of securities,
payment of dividends, establishment of branches, and other aspects of the
Bank's operations. Various consumer laws and regulations also affect the
operations of the Bank, including state usury laws, laws relating to
fiduciaries, consumer credit and equal credit, and fair credit reporting.
Under the provisions of the Federal Reserve Act, the Bank is subject to
certain restrictions on any extensions of credit to the Company or, with
certain exceptions, to other affiliates, on investments in the stock or
other securities of national banks, and on the taking of such stock or
securities as collateral. These regulations and restrictions may limit the
Company's ability to obtain funds from the Bank for its cash needs, including
funds for acquisitions and the payment of dividends, interest, and operating
expenses.
The FDIC insures the deposits of the Bank to the current maximum allowed
by law. As an institution whose deposits are insured by the Bank Insurance
Fund ("BIF") and Savings Association Insurance Fund ("SAIF") of the FDIC,
the Bank also is subject to insurance assessments imposed and set by the
FDIC from time to time. The FDIC is further authorized to impose one or
more special assessments in any amount deemed necessary to enable repayment
of amounts borrowed by the FDIC from the Treasury Department. The actual
assessments to be paid into the BIF and the SAIF are based on the institution's
assessment risk classification, which is whether the institution is considered
"well capitalized", "adequately capitalized", or "under-capitalized", as
those terms have been defined in applicable federal regulations, and whether
the institution is considered by its supervising agency to be financially
sound or to have supervisory concerns.
Sarbanes-Oxley Act of 2002
__________________________
On July 30, 2002, the President of the United States signed into law the
Sarbanes-Oxley Act of 2002 (the "Act") which mandated a variety of reforms
intended to address corporate and accounting fraud. The Company believes
that it has complied with all provision of the Act. The Act provides for the
establishment of a new Public Company Accounting Oversight Board ("PCAOB")
which enforces auditing, quality control and independence standards for firms
that audit SEC-reporting companies and is funded by fees from all SEC-
reporting companies. The Act imposes higher standards for auditor
independence and restricts performance of consulting services by auditing
firms to companies they audit. Any non-audit services being provided to an
audit client requires preapproval by the Company's audit committee members.
In addition, certain audit partners must be rotated periodically. The Act
requires chief executive officers and chief financial officers, or their
equivalent, to certify to the accuracy of periodic reports filed with the
SEC, subject to civil and criminal penalties if they knowingly or willfully
violate this certification requirement. In addition, under the Act, the
Company's counsel is required to report evidence of a material violation of
the securities laws or a break of fiduciary duty by a company to its chief
executive officer or its chief legal officer, and if such officer does not
appropriately respond, to report such evidence to the audit committee or
other similar committee of the board of directors or the board itself.
4
The Act also increases the oversight and authority of audit committees
of publicly traded companies. Audit committee members must be independent,
pursuant to Rule 10A-3 of the Exchange and are barred from accepting
consulting, advisory or other compensatory fees from the issuer. In
addition all SEC reporting companies must disclose whether at least one
member of the committee is a "financial expert" (as such term is defined by
the SEC rules) and if not, why not. Audit committees of publicly traded
companies have authority to retain their own counsel and other advisors
funded by the company. Audit committees must establish procedures for the
receipt, retention and treatment of complaints regarding accounting and
auditing matters and procedures for confidential, anonymous submission of
employee concerns regarding questionable accounting or auditing matters.
It is unlawful for any person that is not a registered public accounting
firm ("RPAF") with the PCAOB to audit an SEC-reporting company. Under the
Act, a RPAF is prohibited from performing statutorily mandated audit
services for a company if such company's chief executive officer, chief
financial officer, comptroller, chief accounting officer or any person
serving in equivalent positions has been employed by such firm and
participated in the audit of such company during the one-year period
preceding the audit initiation date. The Act also prohibits any officer or
director of a company or any other person acting under their direction from
taking any action to fraudulently influence, coerce, manipulate or mislead
any independent public or certified accountant engaged in the audit of the
Company's financial statements for the purpose of rendering the financial
statement's materially misleading. The Act also requires the SEC to
prescribe rules requiring inclusion of an internal control report and
assessment by management in the annual report to shareholders. The Act
requires the RPAF that issues the audit report to attest to management's
assessment of and report on the Company's internal controls. In addition,
the Act requires that each financial report required to be prepared in
accordance with generally accepted accounting principles and filed with the
SEC reflect all material correcting adjustments that are identified by a
RPAF in accordance with generally accepted accounting principles and the
rules and regulations of the SEC.
The USA Patriot Act
___________________
On October 26, 2001, President Bush signed into law The USA Patriot Act
of 2001 (the "Act"). The Act substantially broadens existing anti-money
laundering legislation and the extraterritorial jurisdiction of the United
States; imposes new compliance and due diligence obligations; creates new
crimes and penalties; compels the production of documents located both
inside and outside the United States, including those of non-U.S.
institutions that have a correspondent relationship in the United States;
and clarifies the safe harbor from civil liability to customers. The Act
mandates the U.S. Treasury Department to issue a number of regulations to
further clarify the Act's requirements or provide more specific guidance on
their application.
The Act requires all "financial institutions," as defined, to establish
certain anti-money laundering compliance and due diligence programs. The Act
requires financial institutions that maintain correspondent accounts for
non-U.S. institutions or persons that are involved in private banking for
"non-United States persons" or their representatives, to establish
"appropriate, specific and, where necessary, enhanced due diligence
policies, procedures, and controls that that are reasonably designed to
detect and report instances of money laundering through those accounts."
Gramm-Leach-Bliley Act
______________________
The Gramm-Leach-Bliley Act (the "Act") was signed into law in November
1999 to remove depression-era barriers that separate banking, securities and
insurance functions. The Act allows full affiliation between banks and
securities firms by permitting the creation of financial holding companies
designed to engage in a range of financial activities, including securities
underwriting and merchant banking. The Act also repeals the SAIF special
reserve; modernizes the Federal Home Loan Bank System; provides for less
frequent Community Reinvestment Act ("CRA") compliance examinations for
community banks with $250 million or less in assets, and gives customers
the right to prevent banks from sharing information with third parties,
such as telemarketers. The Act prohibits unitary savings and loan holding
companies formed after May 4, 1999 from engaging in nonfinancial activities,
and also prohibits purchase of unitary thrift holding companies by commercial
firms. The Act contains requirements for the protection of consumer's
financial privacy ("Regulation P"). The Bank has identified obligations,
developed a privacy policy and provided disclosure of the policy to customers.
The Bank is in full compliance with Regulation P.
5
Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
________________________________________________________________________
Among other things, the FDICIA provides the federal bank regulatory
agencies with broad powers to take prompt corrective action to resolve
problems of insured depository institutions. The extent of those powers
depends upon whether the institution in question is "well capitalized",
"adequately capitalized", "undercapitalized", "significantly
undercapitalized", or "critically undercapitalized." A depository
institution's capital tier will depend upon where its capital levels
compare to various established capital measures and certain other factors,
as established by regulation. As of December 31, 2003, the Bank met the
definition of a "well capitalized" institution.
The FDICIA generally prohibits a depository institution from making
any capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be "undercapitalized". "Undercapitalized" depository
institutions are subject to growth limitations and are required to submit
a capital restoration plan. If a depository institution fails to submit an
acceptable plan, it is treated as if it is "significantly undercapitalized".
"Significantly undercapitalized" depository institutions may be subject to
a number of requirements and restrictions, including orders to sell
sufficient voting stock to become "adequately capitalized", requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions are subject to the
appointment of a receiver or conservator.
The FDICIA further requires an increase in the frequency of "full-
scope, on-site" examinations and expands audit requirements. In addition,
federal bank regulatory agencies are required to review and prescribe
uniform accounting standards that are at least as stringent as Generally
Accepted Accounting Principles.
Pursuant to the FDICIA, the FRB and the other federal bank regulatory
agencies adopted real estate lending guidelines pursuant to which each
insured depository institution is required to adopt and maintain written
real estate lending policies in conformity with the prescribed guidelines.
Under these guidelines, each institution is expected to set loan-to-value
ratios not exceeding the supervisory limits set forth in the guidelines.
A loan-to-value ratio is generally defined as the total loan amount divided
by the appraised value of the property at the time the loan is originated.
The guidelines also require that the institution's real estate policy
require proper loan documentation and that it establish prudent
underwriting standards.
The FDICIA also contains the Truth in Savings Act. The purpose of the
Truth in Savings Act is to require the clear and uniform disclosure of the
rates of interest which are payable on deposit accounts by depository
institutions and the fees that are assessable against deposit accounts, so
that consumers can make a meaningful comparison between the competing claims
of financial institutions with regard to deposit accounts and products.
The FDICIA also amended the prior law with respect to the acceptance of
brokered deposits by insured depository institutions to permit only a "well
capitalized" depository institution to accept brokered deposits without
prior regulatory approval. Under implementing regulations, "well
capitalized" banks may accept brokered deposits with a waiver from the
FDIC (subject to certain restrictions on payments of rates), while
"undercapitalized" banks may not accept brokered deposits. The regulations
contemplate that the definitions of "well capitalized", "adequately
capitalized", and "undercapitalized" will be the same as the definitions
adopted by the agencies to implement the prompt corrective action provisions
of the FDICIA (as described above).
The Bank became subject to the provisions of FDICIA relating to
internal controls effective January 1, 2001. These provisions are required
for banks over $500 million in assets and require that the Bank document
and test its internal control structure and report on it, on an annual
basis. As of December 31, 2004, the Bank complied with all applicable
sections of the regulation and reported as required in 2004.
6
Payment of Dividends
____________________
The Bank is subject to legal limitations on the frequency and amount of
dividends paid to the Company. The FRB or the FDIC may restrict the ability
of a bank to pay dividends if such payments would constitute an unsafe or
unsound banking practice. These regulations and restrictions may limit the
Company's ability to obtain funds from the Bank for its cash needs,
including funds for acquisitions and the payment of dividends, interest,
and operating expenses.
In addition, Florida law places certain restrictions on the declaration
of dividends from state-chartered banks to their holding companies.
Pursuant to Section 658.37 of the Florida Banking Code, the Board of
Directors of a state-chartered bank, after charging off bad debts,
depreciation, and other worthless assets, if any, and making provisions for
reasonably anticipated future losses on loans and other assets, may
quarterly, semi-annually, or annually declare a dividend of up to the
aggregate of net profits of that period, combined with the bank's retained
net profits for the preceding two years and, with the approval of the
Florida Department of Banking and Finance, declare a dividend from retained
net profits which accrued prior to the preceding two years. Before
declaring such dividends, 20% of the net profits for the preceding period
as is covered by the dividend must be transferred to the surplus fund of
the bank until this fund becomes equal to the amount of the bank's common
stock then issued and outstanding. A state-chartered bank may not declare
any dividend if (i) its net income from the current year combined with the
retained net income for the preceding two years is a loss, or (ii) the
payment of such dividend would cause the capital account of the bank to
fall below the minimum amount required by law, regulation, order, or any
written agreement with the Florida Department of Banking and Finance or a
federal regulatory agency.
Depositor Preference Statute
____________________________
Legislation has been enacted providing that deposits and certain claims
for administrative expenses and employee compensation against an insured
depository institution would be afforded a priority over other general
unsecured claims against such an institution, including federal funds and
letters of credit, in the "liquidation or other resolution" of such an
institution by any receiver.
Monetary Policy And Economic Control
____________________________________
The commercial banking business in which the Bank engages is affected
not only by general economic conditions but also by the monetary policies
of the FRB. Changes in the discount rate on member bank borrowing,
availability of borrowing at the "discount window," open market operations,
the imposition of changes in reserve requirements against member banks'
deposits and assets of foreign branches, and the imposition of and changes
in reserve requirements against certain borrowings by banks and their
affiliates are some of the instruments of monetary policy available to the
FRB. These monetary policies are used in varying combinations to influence
overall growth and distributions of bank loans, investments, and deposits,
and this use may affect interest rates charged on loans or paid on deposits.
The monetary policies of the FRB have had a significant effect on the
operating results of commercial banks and are expected to do so in the
future. The monetary policies of these agencies are influenced by various
factors, including inflation, unemployment, and short-term and long-term
changes in the international trade balance and in the fiscal policies of
the United States Government. Future monetary policies and the effect of
such policies on the future business and earnings of the Company and the
Bank cannot be predicted.
Item 2. Properties.
The Company owns and occupies offices in a building located at 1550 S.W.
57th Avenue, Miami, Florida. This building serves as the Bank's main office.
The Bank's and the Company's offices occupy the entire building. Management
believes that this location provides sufficient parking for its customers as
well as visibility from S.W. 57th Avenue, a major thoroughfare.
The Bank owns ten of its fourteen full-service branches and leases the
remaining four offices, all of which branches are located in Miami-Dade
County or Broward County, Florida. Additional information relating to the
Company's lease commitments is set forth in Note 4 on page 29 in the
Company's 2004 Annual Report and is incorporated herein by reference. The
condition of all properties is considered good. In the opinion of
management, owned properties are adequately covered by insurance.
7
Item 3. Legal Proceedings.
The Company and the Bank are periodically parties to or otherwise
involved in legal proceedings arising in the normal course of business,
such as claims to enforce liens, claims involving the making and servicing
of real property loans, and other issues incident to the Bank's business.
Management does not believe that there is any pending or threatened
proceeding against the Company or the Bank which, if determined adversely,
would have a material effect on the business, results of operations, or
financial position of the Company or the Bank.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
Information required to be reported under this item is set forth on pages
13 and 14 of the Company's 2004 Annual Report and on page 7 of the Company's
2005 Proxy Statement and is incorporated herein by reference.
Item 6. Selected Financial Data.
Information required to be reported under this item is set forth on pages
2 and 3 of the Company's 2004 Annual Report and is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Information required to be reported under this item is set forth on pages
4 through 17 of the Company's 2004 Annual Report and is incorporated herein
by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Information required to be reported under this item is set forth on
pages 15 and 16 of the Company's 2004 Annual Report under the section
entitled "Asset/Liability Management and Interest Rate Risk", and is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The information required to be reported under this item is set forth on
pages 18 through 39 of the Company's 2004 Annual Report and is incorporated
herein by reference.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
Not applicable.
8
Item 9A. Report of Management on Internal Control Over Financial Reporting
Within the 75-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the participation
of the Company's management, including its Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of its
disclosure controls and procedures (as defied in Rule 13a-15(e) under the
Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the design and
operation of these disclosure controls and procedures were effective.
The work undertaken by the Company to comply with Section 404 of the
Sarbanes-Oxley Act of 2002 involved the identification, documentation,
assessment and testing of the Company's internal control over financial
reporting in order to evaluate the effectiveness of such controls.
See page 18 of the Company's 2004 Annual Report for "Management's Report
on Internal Control Over Financial Reporting", and page 19 for the Report of
the Company's independent registered certified public accounting firm with
respect to management's assessment of internal control. There was no change
in the Company's internal control over financial reporting (as defined in
Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred
during the fourth quarter of 2004 that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
ITEM 9B. Other Information
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Company has adopted a Code of Ethics that applies to the Company's
Chairman and Chief Executive Officer, the Chief Financial Officer and
Controller. The Code of Ethics is available on the Company's website at
www.commercialbankfl.com. Reference to the Company's website in this Annual
Report on 10K does not in any way incorporate information contained in such
website into this report.
Additional information required to be reported under this item is set
forth on pages 2, 3, 5 and 14 of the Company's 2005 Proxy Statement and is
incorporated herein by reference.
Item 11. Executive Compensation.
Information required to be reported under this item is set forth on
pages 4 through 12 of the Company's 2005 Proxy Statement and is incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
Information required to be reported under this item is set forth on
pages 7, 13 and 14 of the Company's 2005 Proxy Statement and is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions.
Information required to be reported under this item is set forth on
page 16 of the Company's 2005 Proxy Statement and is incorporated herein
by reference.
Item 14. Principal Accountant Fees and Services.
Information required to be submitted under this item is set forth on
page 15 of the Company's 2005 Proxy Statement and is incorporated herein
by reference.
9
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this report:
1. Financial Statements:
Reference is made to Item 8 of Part II to this Annual Report on
Form 10-K which incorporates by reference the Company's financial
statements contained in the Company's 2004 Annual Report attached
as Exhibit 13.1 to this report.
2. Financial Statement Schedules:
All schedules are omitted because they are not applicable or
the required information is contained the Company's financial
statements or the notes thereto.
3. Exhibits
3.1 Articles of Incorporation, as amended, of the Company.
Incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form SB-2 as filed with the Securities
and Exchange Commission, No. 33-67254, effective October 5, 1993
("Registration Statement").
3.2 By-Laws, as amended, of the Company. Incorporated by reference
to Exhibit 3.2 of the Registration Statement.
10.1 Standard Office Building Lease between Swire Brickell One, Inc.,
d/b/a "Courvoisier Center" (Landlord) and Commercial Bank of
Florida (Tenant), dated December 21, 1990. Incorporated by
reference to Exhibit 10.2 of the Registration Statement.
10.2 Form of Indemnification Agreement. Incorporated by reference to
Exhibit 10.4 of the Registration Statement.
10.3* Employment Agreement between Commercial Bankshares, Inc.,
Commercial Bank of Florida, and Joseph W. Armaly, dated March 18,
1994 and amended and restated on December 18, 1998. Incorporated
by reference to Exhibit 10.3 that accompanies the 1998 Annual
Report on Form 10-K.
10.4* Employment Agreement between Commercial Bankshares, Inc.,
Commercial Bank of Florida, and Jack J. Partagas, dated March 18,
1994 and amended and restated on December 18, 1998. Incorporated
by reference to Exhibit 10.4 that accompanies the 1998 Annual
Report on Form 10-K.
10.5* Employment Agreement between Commercial Bank of Florida and
Barbara Reed, dated February 5, 1997. Incorporated by reference
to Exhibit 10.5 that accompanies the 1996 Annual Report on Form
10-K.
10.6* Employment Agreement between Commercial Bank of Florida and Bruce
Steinberger, dated December 18, 1998. Incorporated by reference
to Exhibit 10.6 that accompanies the 1998 Annual Report on Form
10-K.
10.7* Commercial Bankshares, Inc., 1994 Outside Director Stock Option
Plan, effective as of March 18, 1994. Incorporated by reference
to Exhibit 10.7 that accompanies the 1993 Annual Report on Form
10-KSB.
10.8* Commercial Bankshares, Inc., 1994 Performance Stock Option Plan,
adopted March 18, 1994, effective April 1, 1994. Incorporated by
reference to Exhibit 10.8 that accompanies the 1993 Annual Report
on Form 10-KSB.
10.10 Standard Office Building Lease, dated December 10, 1996, between
Promenade of Coral Springs, Inc. (Landlord) and Commercial Bank
of Florida (Tenant). Incorporated by reference to Exhibit 10.12
that accompanies the 1997 Annual Report on Form 10-K.
10.11* Commercial Bankshares, Inc., Amendment to 1994 Outside Director
Stock Option Plan, dated January 15, 1999. Incorporated by
reference to Exhibit 10.13 that accompanies the 1998 Annual
Report on Form 10-K.
10.12* Commercial Bankshares, Inc., Amendment to 1994 Performance Stock
Option Plan dated January 15, 1999. Incorporated by reference
to Exhibit 10.14 that accompanies the 1998 Annual Report on Form
10-K.
10
10.13 Commercial Bankshares, Inc., Amendment to Standard Office
Building Lease between Swire Brickell One, Inc., d/b/a
"Courvoisier Center" (Landlord) and Commercial Bank of Florida
(Tenant), dated December 21, 2000. Incorporated by reference to
Exhibit 10.14 that accompanies the 2000 Annual Report on Form
10-K.
10.14 Agreement to provide data processing and back office services
between Electronic Data Systems and Commercial Bank of Florida,
dated, December 7, 1999. Incorporated by reference to Exhibit
10.15 that accompanies the 2000 Annual Report on Form 10-K.
10.15 Commercial Bankshares, Inc., Standard Office Building Lease
between Hallandale Place, Ltd., c/o Investment Management
Associates, Inc. (Landlord) and Commercial Bank of Florida
(Tenant), dated January 25, 2002. Incorporated by reference to
Exhibit 10.15 that accompanies the 2001 Annual Report on Form
10-K.
10.16 Commercial Bankshares, Inc., Standard Office Building Lease
between HFJ, LLC, as beneficiary of the KLS Flamingo Land Trust
(Landlord) and Commercial Bank of Florida (Tenant), dated
10/30/2002. Incorporated by reference to Exhibit 10.16 that
accompanies the 2002 Annual Report on Form 10-K.
10.17 Commercial Bankshares, Inc., 2004 Outside Director Stock Option
Plan, approved by stockholders on April 20, 2004. Incorporated
by reference to Appendix I of the Company's 2004, Definitive
Proxy Statement.
10.18 Commercial Bankshares, Inc., 2004 Employee Stock Option Plan,
approved by stockholders on April 20, 2004. Incorporated by
reference to Appendix II of the Company's 2004, Definitive Proxy
Statement.
11.1 Computation of Earnings per Common and Common Equivalent Share.
Information required to be reported under this exhibit is set
forth on page 32 of the 2004 Annual Report and is incorporated
herein by reference.
13.1** 2004 Annual Report to Shareholders of Commercial Bankshares, Inc.
21.1 Subsidiaries of the Company (filed herewith).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
31.1 Certification of the Chief Executive Officer pursuant to Rule
15A-14(A) or 15D-14(A) of the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (attached herewith).
31.2 Certification of the Chief Financial Officer pursuant to Rule
15A-14(A) or 15D-14(A) of the Securities Exchange Act of 1934,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (attached herewith).
32.1 Certification of the Chief Executive Officer pursuant to Rule
13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C. 1350), as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(attached herewith).
32.2 Certification of the Chief Financial Officer pursuant to Rule
13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C. 1350), as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(attached herewith).
_______________________
* Management contracts and compensatory plans and arrangements
required to be filed as exhibits pursuant to Item 15(c) of this
report.
** Except for those portions of the Annual Report which are
expressly incorporated by reference in this Form 10-K, the Annual
Report is furnished for the information of the Securities and
Exchange Commission only and is not to be deemed "filed" as part
of such Form 10-K (attached herewith).
(b) Exhibits
See Item 15(a)3 above.
(c) Financial Statement Schedules
See Item 15(a)2 above.
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By:/s/ Joseph W. Armaly
_______________________
Chairman of the Board and Chief Executive Officer
March 15, 2005
By:/s/ Barbara E. Reed
______________________
Senior Vice President and Chief Financial Officer
March 15, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
____________________________ _____________________________ ______________
By:/s/ Joseph W. Armaly Chairman of the Board March 15, 2005
_______________________ and Chief Executive Officer
(Principal Executive Officer)
By:/s/ Jack J. Partagas President, March 15, 2005
_______________________ Chief Operating Officer,
and Director
By:/s/ Barbara E. Reed Senior Vice President March 15, 2005
______________________ and Chief Financial Officer
By:/s/ Cromwell A. Anderson Director March 15, 2005
___________________________
By:/s/ Robert Namoff Director March 15, 2005
____________________
By:/s/ Sherman Simon Director March 15, 2005
____________________
By:/s/ Michael W. Sontag Director March 15, 2005
________________________
By:/s/ Martin Yelen Director March 15, 2005
___________________
12
Exhibit 13.1
Commercial Bankshares, Inc. 2004 Annual Report
Exhibit 21.1
Subsidiaries of Commercial Bankshares, Inc.:
Commercial Bank of Florida, a Florida chartered banking corporation (100%)
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration
Statement on Form S 8/S-3 (No. 33-96606) and Forms S-8 (No. 333-11295 and
No. 333-11607) of Commercial Bankshares, Inc. of our report dated March 15,
2005 relating to the financial statements, management's assessment of the
effectiveness of internal control over financial reporting and the
effectiveness of internal control over financial reporting, which appears
in the Annual Report to Shareholders, which is incorporated in this Annual
Report on Form 10 K.
/s/PricewaterhouseCoopers LLP
_____________________________
Miami, Florida
March 15, 2005
13
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 15A-14(A) OR
15D-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Joseph W. Armaly, certify that:
1. I have reviewed this annual report on Form 10-K of Commercial
Bankshares, Inc;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financing reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f))for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiary, is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the registrant's ability
to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Dated: March 15, 2005 COMMERCIAL BANKSHARES, INC.
/s/ Joseph W. Armaly
____________________
Chief Executive Officer
14
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 15A-14(A) OR
15D-14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Barbara E. Reed, certify that:
1. I have reviewed this annual report on Form 10-K of Commercial
Bankshares, Inc;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financing reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiary, is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design
or operation of internal controls over financial reporting which
are reasonably likely to adversely affect the registrant's ability
to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Dated: March 15, 2005 COMMERCIAL BANKSHARES, INC.
/s/ Barbara E. Reed
___________________
Chief Financial Officer
15
Exhibit 32.1
Certification of Chief Executive Officer Pursuant to Rule 13a-14(b) or Rule
15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of Commercial Bankshares, Inc.,
(the "Company") on Form 10-K for the year ended, December 31, 2004 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 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirements 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 as of the dates and for the periods expressed in the
Report.
/s/ Joseph W. Armaly
______________________
Chief Executive Officer
March 15, 2005
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.
Exhibit 32.2
Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule
15d-14(b) and 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of Commercial Bankshares, Inc.,
(the "Company") on Form 10-K for the year ended, December 31, 2004 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 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirements 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 as of the dates and for the periods
expressed in the Report.
/s/ Barbara E. Reed
_____________________
Chief Financial Officer
March 15, 2005
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.
16