Cornerstone Community Bancorp Reports Financial Results for the Fourth Quarter and Full Year Ended December 31, 2017

RED BLUFF, Calif.--()--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the fourth quarter and full year ended December 31, 2017.

The Company reported net income of $184,000 for the three months ended December 31, 2017 compared to net income of $457,000 for the same period last year. Diluted earnings per share were $0.13 for the three months ended December 31, 2017 compared to $0.35 for the same period last year. Fourth quarter results were impacted by a $400,000 net charge to the provision for income taxes related to a revaluation of the net deferred tax asset associated with the passage of the Tax Cuts and Jobs Act.

The return on average assets for the three months ended December 31, 2017 was 0.32% and the return on average equity was 4.11%.

For the year ended December 31, 2017, the Company reported net income of $1,638,000 compared to net income of $1,353,000 for the same period last year. Diluted earnings per share were $1.20 for the year ended December 31, 2017 compared to $1.02 for the same period last year.

The return on average assets for the year ended December 31, 2017 was 0.77% and the return on average equity was 9.63%.

President and CEO, Jeff Finck, stated, “We are very pleased with the solid growth in loans, deposits and earnings in 2017. Also, the construction of our new building in Red Bluff is proceeding nicely and we look forward to its anticipated completion in 2018.”

Net Interest Income

Net interest income increased by 22% to $2,226,000 for the quarter ended December 31, 2017 compared to $1,819,000 for the same quarter last year. For the year ended December 31, 2017, net interest income increased by 21% to $8,100,000 compared to $6,679,000 for the same period last year.

Provision for credit losses

No provision for credit losses was recorded for the quarters ended December 31, 2017 and 2016.

The Company recorded a $215,000 provision for credit losses for the year ended December 31, 2017 compared to no provision for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended December 31, 2017 was $243,000 compared to $257,000 for the quarter ended December 31, 2016. For the year ended December 31, 2017, non-interest income was $1,223,000 compared to $760,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,477,000 for the quarter ended December 31, 2017 compared to $1,301,000 for the same period last year. For the year ended December 31, 2017, non-interest expense was $5,645,000 compared to $5,145,000 for the same period last year.

Balance Sheet

The Company had total assets at December 31, 2017 of $229.0 million compared to $194.4 million at December 31, 2016.

Total loans, net of unearned income at December 31, 2017 were $184.8 million compared to $150.4 million at December 31, 2016, representing an increase of $34.4 million, or 22.9%.

Total deposits were $196.6 million at December 31, 2017 compared to total deposits of $161.1 million at December 31, 2016, representing an increase of $35.5 million, or 22.1%.

Credit Quality

The allowance for loan losses was $1,847,000, or 1.00% of loans, net of unearned income at December 31, 2017, compared to $1,623,000, or 1.08% of loans, net of unearned income at December 31, 2016. There were no nonperforming assets at December 31, 2017 compared to $11,000 at December 31, 2016.

Capital

At December 31, 2017, shareholders’ equity totaled $17.7 million compared to $15.7 million at December 31, 2016. Book value per share increased by 8.4% to $13.99 per share at December 31, 2017 compared to $12.90 per share at December 31, 2016.

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 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 Bancorp 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 Bancorp’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 Bancorp is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than Cornerstone Community Bancorp; 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 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)
         
12/31/17   09/30/17   06/30/17   03/31/17   12/31/16
 
ASSETS
Cash and due from banks $ 4,630 $ 4,465 $ 3,516 $ 3,809 $ 3,360
Federal funds sold 20 20 20 20 20
Interest-bearing deposits 17,077 24,930 13,739 16,773 17,225
Investment securities 12,274 12,486 12,793 13,052 13,338
Loans held for sale - - 2,603 - 3,974
Loans, net of unearned income 184,814 173,452 169,070 159,768 150,413
Allowance for loan losses   (1,847 )     (1,847 )     (1,778 )     (1,773 )     (1,623 )
Loans, net 182,967 171,605 167,292 157,995 148,790
Premises and equipment, net 5,121 3,102 2,006 1,854 1,032
Other assets   6,950       7,001       8,605       6,460       6,643  
Total assets $ 229,039     $ 223,609     $ 210,574     $ 199,963     $ 194,382  
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 38,348 $ 37,977 $ 33,101 $ 27,439 $ 23,042
Demand interest-bearing 26,311 25,434 24,610 23,392 22,490
Money market and savings 68,715 65,909 59,759 60,877 62,161
Time deposits of less than $100,000 18,510 18,333 19,020 18,984 18,595
Time deposits of $100,000 or more   44,731       43,658       42,565       35,317       34,804  
Total deposits 196,615 191,311 179,055 166,009 161,092
Federal Home Loan Bank borrowings 9,000 9,000 9,000 12,000 12,000
Subordinated debentures 4,892 4,890 4,887 4,885 4,883
Interest payable and other liabilities   821       955       868       865       746  
Total liabilities   211,328       206,156       193,810       183,759       178,721  
 
SHAREHOLDERS' EQUITY
Common stock 13,333 13,258 13,115 13,092 12,925
Retained Earnings 4,282 4,113 3,557 3,050 2,659
Accumulated other comprehensive income (loss)   96       82       92       62       77  
Total shareholders' equity   17,711       17,453       16,764       16,204       15,661  
Total liabilities and shareholders' equity $ 229,039     $ 223,609     $ 210,574     $ 199,963     $ 194,382  
 
Total equity / total assets 7.73 % 7.81 % 7.96 % 8.10 % 8.06 %
Book value per share $ 13.99 $ 13.90 $ 13.53 $ 13.08 $ 12.90
 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
         
Three months ended Year ended
12/31/17   09/30/17   12/31/16 12/31/17   12/31/16
 
INTEREST INCOME
Loans $ 2,495 $ 2,365 $ 2,002 $ 9,068 $ 7,493
Federal funds sold - - - - -
Investment securities 78 76 79 313 324
Other   98       78       91     317       208  
Total interest income   2,671       2,519       2,172     9,698       8,025  
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 13 13 11 47 39
Money market and savings 120 106 92 415 316
Time deposits 185 166 117 623 456
Other   127       128       133     513       535  
Total interest expense   445       413       353     1,598       1,346  
 
Net interest income 2,226 2,106 1,819 8,100 6,679
Provision for credit losses   -       65       -     215       -  

Net interest income after provision for credit losses

  2,226       2,041       1,819     7,885       6,679  
 
NON-INTEREST INCOME
Service charges on deposit accounts 47 44 45 181 165
Gain on sale of loans 102 239 127 662 335
Gain (loss) on sale of other real estate owned - - - - (77 )
Gain (loss) on sale of securities - - - - -
Other non-interest income   94       106       85     380       337  
Total non-interest income   243       389       257     1,223       760  
 
OPERATING EXPENSES
Salaries and benefits 799 790 730 3,058 2,766
Premises and fixed assets 143 141 137 562 574
Other   535       554       434     2,025       1,805  
Total operating expenses   1,477       1,485       1,301     5,645       5,145  
 
Income before income taxes 992 945 775 3,463 2,294
Income taxes 808 389 318 1,825 941
               
NET INCOME $ 184     $ 556     $ 457   $ 1,638     $ 1,353  
 
EARNINGS PER SHARE
Basic earnings per share $ 0.15     $ 0.45     $ 0.38   $ 1.32     $ 1.09  
Diluted earnings per share $ 0.13     $ 0.41     $ 0.35   $ 1.20     $ 1.02  
Average common shares outstanding   1,261,647       1,243,006       1,206,756     1,244,544       1,236,141  

Average common and equivalent shares outstanding

  1,382,565       1,367,810       1,304,164     1,363,429       1,330,522  
 
PERFORMANCE MEASURES
Return on average assets 0.32 % 1.02 % 0.94 % 0.77 % 0.73 %
Return on average equity 4.11 % 12.80 % 11.74 % 9.63 % 8.85 %
Net interest margin 4.09 % 4.03 % 3.85 % 3.99 % 3.78 %
Efficiency ratio 59.82 % 59.52 % 62.67 % 60.55 % 69.16 %

Contacts

Cornerstone Community Bancorp
Jeffrey P. Finck, 530-222-1460
President & CEO
Patrick E. Phelan, 530-222-1460
Chief Financial Officer

Contacts

Cornerstone Community Bancorp
Jeffrey P. Finck, 530-222-1460
President & CEO
Patrick E. Phelan, 530-222-1460
Chief Financial Officer