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Annual Report 2006
Selected Financial Data
At a Glance
Selected Financial Data 2006 2005 2004 2003 2002
Total Assets $816,633 $665,008 $590,066 $521,315 $465,549
Total Loans, net 607,932 512,448 450,676 390,026 321,634
Total Deposits 549,918 464,836 411,306 341,315 289,830
Non-interest deposits 74,850 47,573 43,837 34,386 25,790
Total shareholders’ equity 65,541 42,775 42,781 42,289 43,297
Net income 4,111 3,749 2,588 2,302 2,126
Net interest income 20,038 17,714 14,990 13,577 11,698
Non-interest income 4,794 4,865 3,271 3,684 3,160
Non-interest expense 19,116 16,155 13,903 13,104 10,938
Basic earnings per share 1.36 1.43 0.98 0.88 0.79
Diluted earnings per share 1.35 1.41 0.97 0.87 0.79
Book value per share 19.06 16.42 16.27 16.13 16.44
Cash dividends per share $0.64 $0.58 $0.54 $0.53 $0.53
Return on average assets 0.55% 0.59% 0.47% 0.47% 0.47%
Return on average equity 7.73% 8.68% 6.10% 5.37% 4.91%
Net interest margin 2.85% 2.98% 2.89% 2.95% 2.78%
Stock price at year-end $22.51 $22.80 $21.40 $20.18 $13.86
0
200
400
600
800
1000
2002
$465.5
2003
$521.3
2004
$590.1
2005
$665.0
2006
$816.6
2002 2003 2004 2005 2006
$13.86
$20.18$21.40
$22.80 $22.51
2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
0
5
10
15
20
25
0
100
200
300
400
500
600
700
800
0
1
2
3
4
5
0
100
200
300
400
500
600
0
10
20
30
40
50
60
70
80
Total Assets 2002-2006Year-End Stock Price 2002-2006
Non-InterestDeposits 2002-2006
Total Net Loans 2002-2006 Net Income 2002-2006
Total Deposits 2002-2006
$321.6
$289.8$341.3
$411.3
$464.8
$549.9
$25.8
$34.4
MIL
LIO
NS
MIL
LIO
NS
MIL
LIO
NS
MIL
LIO
NS
MIL
LIO
NS
$43.8$47.6
$74.9
$390.0$450.7
$512.4
$607.9
$2.1$2.3
$2.6
$3.7
$4.1
Letter to Shareholders
We are pleased to report that 2006 was another great year for Community Bank Shares.
The most significant event of the year was the addition of The Scott County State Bank to the Community
Bank Shares family on July 1, 2006. Profitability and per share ratios (excluding non-recurring items)
continued to show improvement in 2006. Most importantly, we continue to build a community banking
platform which will drive continued increases in shareholder value as we move forward.
Non-interest deposit growth continues to be our most important strategic objective. Over the
three year period ended December 31, 2006, non-interest deposits grew by a compound annual growth
rate of 13.4% excluding the acquisition of The Scott County State Bank. During 2006, non-interest
deposits grew by just over 57% including The Scott County State Bank and 2,755 new non-interest
checking accounts were opened by Your Community Bank. We believe that the substantial core deposit
growth over the last few years is a result of delivering unparalleled service in our markets.
We will continue to improve our existing product offering to enhance our market position in
Floyd, Clark, and Scott Counties in Indiana and Jefferson and Nelson counties in Kentucky. We are focusing
our efforts on core deposit growth to fund targeted loan growth to increase our net interest margin. We
are excited about our new Treasury Services department, which will be a significant advantage in our effort
to grow non-interest bearing deposits. We have already signed up a number of new remote capture and
lockbox customers and will continue to market these services aggressively.
We would like to express our gratitude to the directors, officers, and employees of Community
Bank Shares, Your Community Bank, and The Scott County State Bank. Our team is committed to
providing the “World’s Greatest Service,” which will be the driving force behind the future success of our
company. Our employees continue to deliver this high level of service every day, which is the basis of the
competitive advantage that we are developing to enhance your shareholder value.
The interest rate environment was challenging for banks during 2006 and continues to put
pressure on bank net interest margins in 2007. A flat to inverted yield curve, which began in 2006 and still
persists as of the date of this letter, typically reduces the spread between a bank’s yield on earning assets
and its cost of funds. We believe that we can counter this pressure and improve our net interest margin
by focusing on our broad strategic objectives of disciplined asset growth through the generation of core
deposits. We thank you for your continued support and look forward to an outstanding 2007.
Timothy T. Shea
Chairman
James D. Rickard
President & CEO
#Our ServiceCommitment 9 I will respond to all requests and meet your
needs within the same day or within your expectations.
Your Community Bank and Scott County State Bank continue to explore innovative solutions to help you manage
your business finances more effectively and efficiently. In 2006, we introduced two new services designed to
improve your cash flow and make managing your business easier.
Business e-Delivery allows corporate clients to capture check deposits at their location and transmit the check
images electronically for immediate deposit into your account. Sometimes called “remote capture,” Business e-
Delivery offers a number of advantages, including:
• Elimination of the physical transport of checks to the branch for deposit.
• Elimination of “mail” float.
• Convenience and safety.
• Increased availability and cash flow.
• Reduction in deposit errors.
• Extended deposit deadlines.
If you bill your customers on a regular and recurring basis, try our new Lockbox service, which allows your
incoming customer payments to bypass your office and go directly to the bank for processing. The payments
are processed quickly and efficiently, relieving your staff of all the time involved in processing and depositing
payments. You have complete access to payment and remittance information in various electronic formats.
As our commercial banking business grows, we continue to provide companies of all sizes with a full range of
accounts, loans and other financial services such as sweep accounts and credit card payment services. We stay
close to our customers, and the relationships we build allow us to understand their needs more completely. You
can see this reflected not only in new services such as those described above, but also in our flexible banking
hours, in local lending decisions and in the way we greet every customer.
Because it’s your business.
I will smile and acknowledge you immediately as you walk through the door.
#Our ServiceCommitment 2
Your Community Bank and Scott County State Bank continue to set a higher standard when it comes to the way
we serve our customers. At Scott County State Bank we are currently in the process of restructuring our existing
accounts, as well as adding new products and services to better suit customer needs. In 2006, Your Community
Bank opened our new Eastpoint banking center in Louisville, remodeled our Charlestown Road branch, and
started construction on our newest Jeffersonville branch on 10th Street.
Your Community Bank also launched a more robust version of our website to enhance the customer’s online
experience with us. The new site offers real-time access to account information rather than a one-day delay, plus
live access to a Your Community Bank team member online during normal banking hours.
As 2006 drew to a close, we were finalizing the details of two exciting new checking choices for customers: our
Prestige Account, a tiered, interest-bearing checking account, and New Opportunity, a basic account for those
who may need another chance in maintaining a checking account.
Our seasoned team of mortgage lenders faced rising interest rates and a slowing housing market with great
service and hard work, continuing their efforts to make Your Community Bank and Scott County State Bank the
mortgage lenders of choice for the markets we serve. Scott County State Bank will gain access to the secondary
mortgage market in 2007, enabling customers to receive lower rates for longer terms.
Our commitment to serving customers in a truly unique fashion is reflected in every aspect of our operations,
including our annual employee awards celebration. All of our Star Awards are based on outstanding service
delivery, including:
• Customer Service Representative of the Year
• Best New Employee
• Best Internal Service
• Best External Service
• Best Community Service
• Best Retail Salesperson
• Best Commercial Salesperson
• Best Support Employee
• Your Community Bank Employee of the Year
• Scott County State Bank Employee of the Year
We continue to offer our customers the kinds of amenities you might expect from a fine hotel. From fresh-baked
cookies and gourmet coffee, to a smiling staff member with an umbrella on a rainy day, we go out of our way to
make every customer feel appreciated.
Because It’s Your Life.
I will always look for opportunities to do a little extra for you.
#Our ServiceCommitment 5
In 2006, our banking family grew with the addition of The Scott County State Bank as part of Community Bank
Shares. Founded in 1890 and known simply as “The Bank” in the Scottsburg area, its commitment to friendly,
personal service is a wonderful fit with ours. The Scottsburg locations will continue to operate under their
existing name, offering customers great service while enjoying access to the financial resources of Community
Bank Shares.
We also continue to offer customers access to investment guidance through our alliance with Smith Barney. In
our quest to offer customers all of the financial services they need under one roof, access to this well-known firm
is available at the Smith Barney Investment Center located in our Main Office in New Albany, Indiana.
Securities are not insured by the FDIC or any other federal government agency, have no financial institution
guarantee and may lose value. Your Community Bank is not affiliated with Smith Barney.
Because It’s Your Investment.
We recognize our role as stewards of the communities in which we live and serve. In 2006, Community Bank
Shares took our commitment to that stewardship to the next level by creating the Your Community Bank
Charitable Foundation, Inc. Created in partnership with the Community Foundation of Southern Indiana, this
foundation will help ensure that the vital charitable work of our company will continue well into the future.
With the help of its employees, Your Community Bank continues to support and promote a diversification of
causes and special projects, donating $178,233.12 back into our communities in 2006, supporting a wide range
of worthwhile organizations including the YMCA, One Southern Indiana, Harvest Homecoming, New Hope
Service, Rauch, Inc., Bridgepointe Goodwill, Stephen Foster Productions, Greater Louisville, Inc., the Kentucky
Humane Society, the March of Dimes and Metro United Way.
Scott County State Bank also supports a number of of causes and community organizations, including the Lincoln
Heritage Council Boy Scouts of America, The Scott County Community Foundation, “We Care” and “Kid’s First”
auctions, the Scott County Economic Development Corporation, the Scott County Veteran’s Memorial Fund, and
the Mayor’s Good Neighbor Awards Banquet. The bank also holds an annual “Bank on Good Health” day at the
main office and an annual flu shot event in October, each of which serves an average of 300 people.
Because It’s Your Community.
COMMUNITY BANK SHARES OF INDIANA, INC.
Timothy T. Shea, Chairman
Gary L. Libs, Vice Chairman
George M. Ballard
R. Wayne Estopinal
Gordon L. Huncilman
Dale L. Orem
James D. Rickard
Kerry M. Stemler
Steven R. Stemler
Edward Pinaire, Special Consultant
YOUR COMMUNITY BANK
Gary L. Libs, Chairman
Dale L. Orem, Vice Chairman
Robert E. Campbell, Jr.
Kevin J. Cecil
R. Wayne Estopinal
Gregory A. Huber
Gordon L. Huncilman
Gerald T. Koetter
W. James Lintner, Jr.
Donna Broughton Meade
Robert L. Pullen
James D. Rickard
Timothy T. Shea
Kerry M. Stemler
Steven R. Stemler
Edward Pinaire, Special Consultant
Directors and Officers
NELSON COUNTY BUSINESS DEVELOPMENT
Guthrie M. Wilson. III, Chairman
George Ballard
Christopher L. Bottorff
Richard Heaton
Ken Rapier, Jr.
James D. Rickard
Timothy T. Shea
Francis X. Smith, II
THE SCOTT COUNTY STATE BANK
Steve Hauer, Chairman
Eric Graham
Philip L. Stewart
Terry Lowry
Paula Murray
James D. Rickard
Syd Whitlock
OFFICERS OF SCOTT COUNTY STATE BANK
Syd Whitlock President/CEO
Russell Comer Senior Vice President/SLO
James Moon Vice President/Loan Review Officer
Kathleen Julian Executive Vice President/Operations
Pam Kirby Assistant Vice President/Data Processing Manager
Brian Everhart Assistant Vice President/Loan Officer
Tami Nance Assistant Vice President/Loan Dept. Manager
Dawn Roll Assistant Vice President/IT
Julie Bruce Assistant Vice President/Cashier
Sharon Craig Assistant Cashier/CSR Manager
Paula Everhart Assistant Cashier
Joyce Hoard Assistant Cashier/Head Teller
Michelle Lakins Community Relations Officer
Scott Murphy Loan Officer
Elaine Seaver Assistant Cashier
James Stephens Security/Compliance Officer
Bonnie Walton Internal Auditor
HOLDING COMPANY AND BANK OFFICERS COMMUNITY BANK SHARES
James D. Rickard President / CEO
Paul A. Chrisco Senior Vice President, Chief Financial Officer
M. Diane Murphy Senior Vice President / Community Relations Officer
George Gray Ball Senior Vice President / Credit Administration
Kevin J. Cecil Senior Vice President
J. Robert McIlvoy Senior Vice President, Retail Banking
Christopher L. Bottorff Senior Vice President
Jeffrey T. Cash Senior Vice President, Audit and Risk Management
Linda Critchfield Senior Vice President, Operations and Information Technology
Bill Wright Senior Vice President, Treasurer, and Director of Planning
Carl Page Vice President, Human Resources Manager
Scott Carr Vice President, Compliance Officer
Pamela P. Echols Corporate Secretary
Christie R. Simmons Assistant Controller
YOUR COMMUNITY BANK
Kevin J. Cecil President, Indiana Market Area, Chief Executive Officer
Christopher L. Bottorff President, Kentucky Market Area
James D. Rickard President and CEO of Community Bank Shares
Paul A. Chrisco Senior Vice President
M. Diane Murphy Senior Vice President, Community Relations Officer
George Gray Ball Senior Vice President, Chief Credit Officer
J. Robert McIlvoy Senior Vice President, Retail Banking
Brian R. Brinkworth Senior Vice President/Manager, Business Services
Joseph I. Bauer Senior Vice President, Business Services
Philip P. Ryan Senior Vice President, Business Services
Linda Critchfield Senior Vice President of Operations and Information Techology
Bill Wright Senior Vice President, Treasurer, Director of Planning
Carl Page Vice President, Human Resources Manager
Vicki A. Rough Vice President and Manager, Private Banking
Robert M. Sullivan Vice President, Business Services
Eric Selby Vice President, Business Services
Le Anne Scott Senior Vice President, Business Services
Gregory P. Frist Vice President, Business Services
Lisa Lutgring Vice President, Manager, Treasury Management
Charles Gill Vice President, Credit Administration
Marjorie Knoop Vice President, IT System Liason
Howard Keene Vice President, Market Manager, Nelson City
Brian Austin Vice President, Information Technology Department Manager
Timothy Rigrish Vice President, Security Officer
Todd Frossard Vice President, Retail Banking
Glenn Roney Vice President, Retail Small Business Development
Frank LaRocque Vice President, Treasury Management, Sales
Scott Carr Vice President, Compliance Officer, CRA Officer, Bank Secrecy Act Officer, Information Security
Jim McMahel Vice President, Collections Manager
Jenna Hagedorn Vice President, Loan Operations Manager
Todd Frossard Vice President, Retail Banking
Pamela P. Echols Corporate Secretary
Jeffrey T. Cash Internal Auditor
Maury Young Controller
Sharon Galardi Human Resources Manager
Brenda G. Bowling Assistant Vice President
Kyra L. McCormick Assistant Vice President
Michael G. Shaughnessy Assistant Vice President
Rose Torres Assistant Vice President, Internal Audit
Jeff Holthouse Assistant Vice President, Business Services
Chellis Austin Assistant Vice President, Business Services
Kathy Barnes Assistant Vice President, Deposit Operations Manager
Nicki L. Harbaugh Assistant Vice President, Retail Banking
Christie R. Simmons Assistant Controller
Keisha Lamb Assistant Corporate Secretary
Karen M. Crecelius Banking Officer
Susan Metka Banking Officer
M. D. Smith Banking Officer
Crystal L. Byrd Banking Officer
Trace Wimsatt Banking Officer
Josh Albertsen Banking Officer
David Dunn Banking Officer
Julie Taylor Banking Officer
Tabitha Nalley Banking Officer
Jennifer Gilland Banking Officer
Stephanie Heil Banking Officer
Thomas Nolan Banking Officer
Debbie Frederick Research and Special Projects Officer
Barb Shields Document Review Officer
Stacy Graf Merchant Services Officer
Amanda Matheny Business Services Officer
Margaret Richards Manager, Document Scanning Center
Jenny Hoffman Operations Officer
Melissa Joyce Accounting Officer
Ray Hart Credit Analyst
New Albany
Main Office
101 W. Spring St.
812-944-2224
Main Office Drive-Thru
401 E. Spring St.
812-981-7303
2626 Charlestown Rd.
812-949-6850
Grant Line WAL-MART
2910 Grant Line Rd.
812-948-8945
Peachtree Centre
4328 Charlestown Rd.
812-949-6800
State Street
480 New Albany Plaza
812-949-6852
Clarksville
901 E. Lewis & Clark Pkwy.
812-288-2680
Jeffersonville
201 W. Court Ave.
812-285-1111
5112 Hwy. 62
812-285-4050
Jeffersonville East
Coming Spring 2007
Where to find us
Hamburg
Drive-thru
Court Ave.
Eastpoint
ClarksvilleMain Office
Hwy. 62State StreetCharlestown Rd.Grant Line
John Rowan
Stephen Foster
Blankenbaker
Cedar Springs
St. Matthews
PeachtreeHighlander PointHamburg
102 Heritage Square
Sellersburg
812-246-8321
Floyds Knobs
Highlander Point
701 Highlander Point Dr.
812-923-7902
Scottsburg
Main Office
125 W. McClain Ave.
812-752-4501
Wardell St. Drive-Thru
155 W. Wardell
812-752-4501
Gardner Branch
1050 N. Gardner
812-752-5883
Westview Branch
57 N. Michael Drive
812-752-9656
Louisville
400 Blankenbaker Parkway
Ste.100
502-489-3070
Cedar Springs WAL-MART
7101 Cedar Springs
502-762-1665
Eastpoint
13205 Magisterial Drive
502-489-3600
St. Matthews
4510 Shelbyville Rd.
502-895-1713
Bardstown
106 A W. John Rowan Blvd.
502-348-9278
119 E. Stephen Foster Blvd.
502-348-7150Customer Service
812-981-7750 local
1-866-944-2004 toll-free
On Call 24-hour Telephone Banking
812-981-7357 local
1-888-291-9415 toll-free
Treasury Services
812-981-0842
Indiana Kentucky
Business Hotlines
Clark County: 812-981-7705
Floyd County: 812-981-7300
Louisville: 502-489-3070
Bardstown: 502-348-1975
Scottsburg: 812-752-4501
Mortgage Lending
812-981-7713
Online
www.yourcommunitybank.com
www.scottcountystatebank.com
4 Scott County State Bank Locations
Jeffersonville East