Cornerstone Community Bancorp Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2020

RED BLUFF, Calif.--(BUSINESS WIRE)--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the fourth quarter ended December 31, 2020.

The Company reported net income of $2,059,000 for the three months ended December 31, 2020 compared to net income of $884,000 for the same period last year. Diluted earnings per share were $1.36 for the three months ended December 31, 2020 compared to $0.58 for the same period last year.

The return on average assets for the three months ended December 31, 2020 was 1.68% and the return on average equity was 27.70%. The tax-equivalent net interest margin was 3.81% for the three months ended December 31, 2020 compared to 4.03% for the same period last year and the efficiency ratio declined to 39.69% for the three months ended December 31, 2020 compared to 58.78% for the same period last year.

For the year ended December 31, 2020, the Company reported net income of $4,626,000 compared to net income of $3,452,000 for the same period last year. Diluted earnings per share were $3.04 for the year ended December 31, 2020 compared to $2.27 for the same period last year.

The return on average assets for the year ended December 31, 2020 was 1.09% and the return on average equity was 16.53%.

Net income for the year ended December 31, 2020 reflects a $1.6 million provision for credit losses related to the economic uncertainties of the COVID-19 pandemic.

President and CEO, Jeff Finck stated, “We had a record quarter and year. During the year, our team was busy helping both new and existing customers through the Paycheck Protection Program (PPP) application process. During the fourth quarter, the team was helping them navigate the forgiveness process. These efforts served to strengthen relationships with existing customers and attract new ones.”

Net Interest Income

Net interest income increased to $4,465,000 for the quarter ended December 31, 2020 compared to $2,834,000 for the same quarter last year. Fourth quarter 2020 net interest income was driven by accelerated PPP fee recognition from borrower forgiveness processing. For the year ended December 31, 2020, net interest income increased to $13,836,000 compared to $10,971,000 for the same period last year.

The Company's tax-equivalent net interest margin was 3.81% for the fourth quarter of 2020 and 3.45% for the year ended December 31, 2020.

Provision for credit losses

There was no provision for credit losses recorded for the quarter ended December 31, 2020 compared to $100,000 for the same quarter last year. For the year ended December 31, 2020, the Company recorded a $1,600,000 provision for credit losses compared to $340,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended December 31, 2020 was $345,000 compared to $201,000 for the quarter ended December 31, 2019. For the year ended December 31, 2020, non-interest income was $1,239,000 compared to $1,206,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,909,000 for the quarter ended December 31, 2020 compared to $1,784,000 for the same period last year. For the year ended December 31, 2020, non-interest expense was $7,156,000 compared to $7,071,000 for the same period last year.

Balance Sheet

Interest-bearing deposits increased $74.2 million at December 31, 2020 compared to December 31, 2019. Investment securities increased $37.0 million at December 31, 2020 compared to December 31, 2019.

Total loans, net of unearned income at December 31, 2020 were $332.2 million compared to $241.7 million at December 31, 2019.

Total deposits were $433.3 million at December 31, 2020 compared to total deposits of $253.4 million at December 31, 2019.

Credit Quality

The allowance for loan losses was $4,009,000, or 1.21% of loans, net of unearned income at December 31, 2020, compared to $2,409,000, or 1.00% of loans, net of unearned income at December 31, 2019. There were no nonperforming assets at December 31, 2020 and December 31, 2019.

Capital

At December 31, 2020, shareholders’ equity totaled $30.1 million compared to $25.8 million at December 31, 2019. Book value was $20.87 per share at December 31, 2020 compared to $17.79 per share at December 31, 2019.

During the fourth quarter of 2020, the Company repurchased 49,800 shares of its common stock for a total of $900,368.

About Cornerstone Community Bancorp

Cornerstone Community Bancorp, a bank holding company headquartered in Red Bluff, California, serves the Red Bluff and Redding communities through its wholly-owned subsidiary, Cornerstone Community Bank with a headquarters office in Red Bluff and two banking offices in Redding. The Bank provides commercial banking services to small and mid-size businesses, including professional service firms, real estate developers and investors and not-for-profit organizations and to their owners and other individuals. Additional information about the Bank is available on its website at www.bankcornerstone.com

Forward-Looking Statements

This release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact Cornerstone Community Bancorp's earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, natural disasters (such as wildfires and earthquakes), pandemics such as COVID-19 and the economic impact caused directly by the disease and by government responses thereto, general economic conditions, economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, costs or effects of acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation (including the Tax Cuts & Jobs Act of 2017 and the Coronavirus Aid, Relief and Economic Security Act of 2020), interruptions of utility service in our markets for sustained periods, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cybersecurity threats) affecting Cornerstone Community Bancorp's operations, pricing, products and services. Forward-looking statements speak only as of the date they are made. Except as required by law, Cornerstone Community Bancorp does not undertake to update forward-looking statements to reflect subsequent circumstances or events.

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
	12/31/20			09/30/20			06/30/20			03/31/20			12/31/19
ASSETS
Cash and due from banks	$	3,811		$	5,455		$	6,350		$	4,965		$	6,038
Federal funds sold		14,166			5,045			10,402			17,385			4,575
Interest-bearing deposits		77,045			62,110			73,310			18,928			2,825
Investment securities		50,336			50,699			16,173			13,144			13,355
Loans held for sale		-			-			-			-			-
Loans, net of unearned income		332,176			342,416			333,620			250,353			241,662
Allowance for loan losses		(4,009	)		(4,009	)		(4,009	)		(3,859	)		(2,409	)
Loans, net		328,167			338,407			329,611			246,494			239,253
Premises and equipment, net		11,581			10,992			11,095			11,180			11,216
Other assets		12,255			12,577			11,882			11,330			11,093
Total assets	$	497,361		$	485,285		$	458,823		$	323,426		$	288,355
LIABILITIES
Deposits:
Demand noninterest-bearing	$	108,147		$	103,824		$	96,395		$	58,357		$	52,352
Demand interest-bearing		108,097			104,819			90,633			51,608			52,058
Money market and savings		146,655			87,035			79,550			77,273			74,560
Time deposits of less than $100,000		15,418			21,103			22,925			26,503			18,395
Time deposits of $100,000 or more		55,021			54,695			51,919			54,274			56,016
Total deposits		433,338			371,476			341,422			268,015			253,381
Borrowings and other obligations		15,000			78,136			83,136			23,000			3,000
Subordinated debentures		16,645			4,923			4,920			4,917			4,914
Interest payable and other liabilities		2,294			1,854			1,765			1,382			1,235
Total liabilities		467,277			456,389			431,243			297,314			262,530
SHAREHOLDERS' EQUITY
Common stock		14,584			15,462			15,440			15,336			15,264
Retained Earnings		15,136			13,077			11,841			10,557			10,510
Accumulated other comprehensive income (loss)		364			357			299			219			51
Total shareholders' equity		30,084			28,896			27,580			26,112			25,825
Total liabilities and shareholders' equity	$	497,361		$	485,285		$	458,823		$	323,426		$	288,355
Total equity / total assets		6.05	%		5.95	%		6.01	%		8.07	%		8.96	%
Book value per share	$	20.87		$	19.38		$	18.50		$	17.63		$	17.79
Shares outstanding		1,441,241			1,491,041			1,491,041			1,481,041			1,452,041

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
	Three months ended									Year ended
	12/31/20			09/30/20			12/31/19			12/31/20			12/31/19
INTEREST INCOME
Loans	$	4,761		$	3,695		$	3,349		$	15,424		$	13,065
Federal funds sold		2			1			40			24			175
Investment securities		162			161			65			495			238
Other		51			33			130			174			444
Total interest income		4,976			3,890			3,584			16,117			13,922
INTEREST EXPENSE
Deposits:
Interest-bearing demand		55			51			50			181			139
Money market and savings		80			79			241			464			906
Time deposits		155			198			351			944			1,465
Other		221			186			108			692			441
Total interest expense		511			514			750			2,281			2,951
Net interest income		4,465			3,376			2,834			13,836			10,971
Provision for credit losses		-			-			100			1,600			340
Net interest income after provision
for credit losses		4,465			3,376			2,734			12,236			10,631
NON-INTEREST INCOME
Service charges on deposit accounts		55			49			61			222			255
Gain on sale of loans		61			-			-			247			417
Gain (loss) on sale of other real estate owned		-			-			-			-			-
Gain (loss) on sale of securities		-			91			-			91			-
Other non-interest income		229			156			140			679			534
Total non-interest income		345			296			201			1,239			1,206
OPERATING EXPENSES
Salaries and benefits		970			979			887			3,280			3,636
Premises and fixed assets		182			200			239			891			859
Other		757			760			658			2,985			2,576
Total operating expenses		1,909			1,939			1,784			7,156			7,071
Income before income taxes		2,901			1,733			1,151			6,319			4,766
Income taxes		842			497			267			1,693			1,314
NET INCOME	$	2,059		$	1,236		$	884		$	4,626		$	3,452
EARNINGS PER SHARE
Basic earnings per share	$	1.39		$	0.83		$	0.61		$	3.12		$	2.41
Diluted earnings per share	$	1.36		$	0.81		$	0.58		$	3.04		$	2.27
Average common shares outstanding		1,477,361			1,491,041			1,442,639			1,483,575			1,435,255
Average common and equivalent
shares outstanding		1,511,365			1,522,872			1,527,238			1,522,714			1,521,093
PERFORMANCE MEASURES
Return on average assets		1.68	%		1.05	%		1.16	%		1.09	%		1.22	%
Return on average equity		27.70	%		17.36	%		13.87	%		16.53	%		14.33	%
Tax-equivalent net interest margin		3.81	%		2.99	%		4.03	%		3.45	%		4.21	%
Efficiency ratio		39.69	%		52.81	%		58.78	%		47.47	%		58.07	%