Cornerstone Community Bank Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2013

RED BLUFF, Calif.--()--Cornerstone Community Bank, (OTCBB: CRSB), announced today its financial results for the fourth quarter and full year ended December 31, 2013.

The Bank reported net income of $256,000 for the three months ended December 31, 2013 compared to net income of $325,000 for the same period last year. Diluted earnings per share for the three months ended December 31, 2013 were $0.20 compared to $0.25 for the same period last year. Net income for the year ended December 31, 2013 was $1,073,000, or $0.83 per diluted share compared to net income of $1,211,000, or $0.95 per diluted share, for the year ended December 31, 2012.

The return on average assets for the three months ended December 31, 2013 was 0.82% compared to 1.19% for the same period last year. The return on average equity was 8.21% for the three months ended December 31, 2013 compared to 11.16% for the same period last year. For the year ended December 31, 2013, the return on average assets was 0.90% and the return on average equity was 8.80% compared to 1.17% and 11.06%, respectively, for the year ended December 31, 2012.

President and CEO, Jeff Finck, stated “total loans outstanding grew by 25% during the year and the loan-to-deposit ratio increased from 75% at December 31, 2012 to 88% at December 31, 2013. This positions the bank well going into 2014.”

Net Interest Income

Net interest income for the three months ended December 31, 2013 was $1,237,000 compared to $1,107,000 for the same period last year. The net interest margin was 4.18% compared to 4.22% for the same period last year. For the year ended December 31, 2013, net interest income was $4,782,000 compared to $4,347,000 for the year ended December 31, 2012, representing an increase of $435,000, or 10%. The net interest margin decreased to 4.24% for the year ended December 31, 2013 compared to 4.42% for the year ended December 31, 2012.

Provision for credit losses

No provision for credit losses was recorded for both the three months ended December 31, 2013 and the three months ended December 31, 2012. The provision for credit losses for the year ended December 31, 2013 was $35,000 compared to $285,000 for the year ended December 31, 2012.

Non-Interest Income

The Bank’s non-interest income for the quarter ended December 31, 2013 was $154,000 compared to $168,000 for the quarter ended December 31, 2012. For the year ended December 31, 2013, non-interest income was $675,000 compared to $859,000 for the same period last year. Non-interest income for the year ended December 31, 2012 was impacted by a severance-related accrual reversal.

Non-Interest Expense

Non-interest expense was $1,123,000 for the quarter ended December 31, 2013 compared to $974,000 for the same period one year earlier. For the year ended December 31, 2013, non-interest expense was $4,337,000 compared to $3,806,000 for the same period last year.

Balance Sheet

The Bank had total assets at December 31, 2013 of $121.9 million, compared to $111.7 million at December 31, 2012, representing growth of $10.2 million, or 9%.

Total loans outstanding, including loans held for sale, at December 31, 2013, were $92.9 million compared to $74.6 million at December 31, 2012, representing an increase of $18.3 million, or 25%.

Total deposits were $106.1 million at December 31, 2013 compared to total deposits of $99.7 million at December 31, 2012, representing an increase of $6.4 million, or 6.4%.

Credit Quality

The allowance for loan losses was $1,399,000, or 1.55% of loans, net of unearned income at December 31, 2013, compared to $1,460,000, or 1.98% of loans, net of unearned income at December 31, 2012. Nonperforming assets at December 31, 2013 were $207,000 compared to $392,000 at December 31, 2012.

The bank recognized $96,000 in net loan charge-offs during the year ended December 31, 2013, representing 0.11% of average loans.

Capital Adequacy

At December 31, 2013, shareholders’ equity totaled $12.5 million compared to $11.8 million at December 31, 2012. At December 31, 2013, the total risk-based capital ratio, tier one capital ratio, and leverage ratio was 13.27%, 12.02% and 10.00%, respectively, all exceeding the regulatory standards for “well-capitalized” institutions of 10.00%, 6.00% and 5.00%, respectively.

About Cornerstone Community Bank

Cornerstone Community Bank is a California state-chartered bank with its headquarters office in Red Bluff and a branch office in Redding. The Bank provides commercial banking services, including a wide variety of deposit products and real estate, construction, commercial and consumer loans to small businesses, professionals and individuals. Additional information about the Bank is available on its website at www.bankcornerstone.com

Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of Cornerstone Community Bank and on information available to management at the time these statements were made. There are a number of factors, many of which are beyond Cornerstone Community Bank’s control, which could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards and tax laws, may adversely affect the businesses in which Cornerstone Community Bank is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than Cornerstone Community Bank; and (7) adverse changes may occur in the securities markets or with respect to inflation. Forward-looking statements speak only as of the date they are made. Except as required by law, Cornerstone Community Bank does not undertake to update forward-looking statements to reflect subsequent circumstances or events.

                   
CORNERSTONE COMMUNITY BANK
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
 
 
12/31/13     09/30/13     06/30/13     03/31/13     12/31/12
 
ASSETS
Cash and due from banks $ 2,025 $ 2,717 $ 2,950 $ 4,009 $ 3,091
Federal funds sold - - - - -
Interest-bearing deposits 875 6,296 2,796 1,241 4,936
Investment securities 21,131 21,866 23,104 25,745 27,143
Loans held for sale 2,726 2,622 2,603 1,961 791
Loans, net of unearned income 90,173 84,751 82,381 80,467 73,820
Allowance for loan losses   (1,399 )       (1,397 )       (1,450 )       (1,411 )       (1,460 )
Loans, net 88,774 83,354 80,931 79,056 72,360
Premises and equipment, net 1,109 1,015 1,041 1,100 1,070
Other assets   5,216         4,900         4,854         2,230         2,301  
Total assets $ 121,856       $ 122,770       $ 118,279       $ 115,342       $ 111,692  
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 15,984 $ 20,377 $ 19,892 $ 18,260 $ 22,366
Demand interest-bearing 17,521 18,220 16,110 14,318 14,893
Money market and savings 42,814 41,044 40,123 44,996 37,634
Time deposits of less than $100,000 11,045 11,118 11,236 8,218 8,965
Time deposits of $100,000 or more   18,736         19,416         18,578         17,241         15,795  
Total deposits 106,100 110,175 105,939 103,033 99,653
Other borrowings 3,000 - - - -
Other liabilities   282         391         311         226         248  
Total liabilities   109,382         110,566         106,250         103,259         99,901  
 
SHAREHOLDERS' EQUITY
Common stock 11,959 11,959 11,959 11,959 11,959
Additional paid-in capital 975 886 859 830 801
Accumulated deficit (365 ) (623 ) (917 ) (1,199 ) (1,439 )
Accumulated other comprehensive income (loss)   (95 )       (18 )       128         493         470  
Total shareholders' equity   12,474         12,204         12,029         12,083         11,791  
Total liabilities and shareholders' equity $ 121,856       $ 122,770       $ 118,279       $ 115,342       $ 111,692  
 
CAPITAL ADEQUACY
Tier I leverage ratio 10.00 % 9.97 % 10.06 % 10.13 % 10.32 %
Tier I risk-based capital ratio 12.02 % 12.36 % 12.45 % 12.81 % 13.29 %
Total risk-based capital ratio 13.27 % 13.61 % 13.71 % 14.06 % 14.55 %
Total equity / total assets 10.24 % 9.94 % 10.17 % 10.48 % 10.56 %
Book value per share $ 10.29 $ 10.17 $ 10.02 $ 10.07 $ 9.83
 
 
CORNERSTONE COMMUNITY BANK
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
                     
 
Three months ended

Year ended

12/31/13     09/30/13     12/31/12 12/31/13     12/31/12
 
INTEREST INCOME
Loans $ 1,200 $ 1,150 $ 1,096 $ 4,677 $ 4,333
Federal funds sold - - - - -
Investment securities 161 152 176 646 709
Other   10         15         5     29         13  
Total interest income   1,371         1,317         1,277     5,352         5,055  
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 6 6 6 25 26
Money market and savings 63 66 90 278 382
Time deposits 65 69 73 267 299
Other   -         -         1     -         1  
Total interest expense   134         141         170     570         708  
 
Net interest income 1,237 1,176 1,107 4,782 4,347
Provision for credit losses   -         (50 )       -     35         285  

Net interest income after provision for credit losses

  1,237         1,226         1,107     4,747         4,062  
 
NON-INTEREST INCOME
Service charges on deposit accounts 22 27 25 109 100
Gain on sale of SBA loans - - - - -
Gain on sale of securities - - - 86 -
Other non-interest income   132         121         143     480         759  
Total non-interest income   154         148         168     675         859  
 
OPERATING EXPENSES
Salaries and benefits 605 535 529 2,248 2,003
Premises and fixed assets 139 137 120 530 478
Other   379         407         325     1,559         1,325  
Total operating expenses   1,123         1,079         974     4,337         3,806  
 
Income before income taxes 268 295 301 1,085 1,115
Income taxes 12 - (24 ) 12 (96 )
                     
NET INCOME $ 256       $ 295       $ 325   $ 1,073       $ 1,211  
 
EARNINGS PER SHARE
Basic earnings per share $ 0.21       $ 0.25       $ 0.27   $ 0.89       $ 1.01  
Diluted earnings per share $ 0.20       $ 0.23       $ 0.25   $ 0.83       $ 0.95  
Average common shares outstanding   1,206,130         1,200,000         1,200,000     1,201,545         1,200,000  

Average common and equivalent shares outstanding

  1,307,931         1,302,209         1,286,221     1,300,406         1,277,192  
 
PERFORMANCE MEASURES
Return on average assets 0.82 % 0.98 % 1.19 % 0.90 % 1.17 %
Return on average equity 8.21 % 9.74 % 11.16 % 8.80 % 11.06 %
Net interest margin 4.18 % 4.10 % 4.22 % 4.24 % 4.42 %
Efficiency ratio 80.73 % 81.50 % 76.39 % 79.48 % 73.11 %
 

Contacts

Cornerstone Community Bank
Jeffrey P. Finck, 530-222-1460
President
Chief Executive Officer
jfinck@bankcornerstone.com
or
Patrick E. Phelan, 530-222-1460
Executive Vice President
Chief Financial Officer
pphelan@bankcornerstone.com

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Contacts

Cornerstone Community Bank
Jeffrey P. Finck, 530-222-1460
President
Chief Executive Officer
jfinck@bankcornerstone.com
or
Patrick E. Phelan, 530-222-1460
Executive Vice President
Chief Financial Officer
pphelan@bankcornerstone.com