Cornerstone Community Bancorp Reports Financial Results for the Third Quarter Ended September 30, 2019

RED BLUFF, Calif.--()--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the third quarter ended September 30, 2019.

The Company reported net income of $872,000 for the three months ended September 30, 2019 compared to net income of $666,000 for the same period last year. Diluted earnings per share were $0.57 for the three months ended September 30, 2019 compared to $0.43 for the same period last year.

The return on average assets for the three months ended September 30, 2019 was 1.18% and the return on average equity was 14.18%. The net interest margin was 4.15% for the three months ended September 30, 2019 compared to 4.14% for the same period last year and the efficiency ratio declined to 58.13% for the three months ended September 30, 2019 compared to 61.94% for the same period last year.

For the nine months ended September 30, 2019, the Company reported net income of $2,568,000 compared to net income of $1,892,000 for the same period last year. Diluted earnings per share were $1.69 for the nine months ended September 30, 2019 compared to $1.26 for the same period last year.

The return on average assets for the nine months ended September 30, 2019 was 1.23% and the return on average equity was 14.50%.

President and CEO, Jeff Finck, stated, “We continue to experience solid growth in loans and deposits. This resulted in strong growth in earnings during the quarter. Earnings per share grew 33%.”

Net Interest Income

Net interest income increased to $2,817,000 for the quarter ended September 30, 2019 compared to $2,462,000 for the same quarter last year. For the nine months ended September 30, 2019, net interest income increased to $8,137,000 compared to $7,061,000 for the same period last year.

Provision for credit losses

The Company recorded a $40,000 provision for credit losses for the quarter ended September 30, 2019 compared to $75,000 for the same quarter last year. For the nine months ended September 30, 2019, the Company recorded a $240,000 provision for credit losses compared to $179,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended September 30, 2019 was $204,000 compared to $215,000 for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, non-interest income was $1,005,000 compared to $534,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,756,000 for the quarter ended September 30, 2019 compared to $1,658,000 for the same period last year. For the nine months ended September 30, 2019, non-interest expense was $5,287,000 compared to $4,782,000 for the same period last year.

Balance Sheet

The Company had total assets at September 30, 2019 of $304.5 million compared to $253.5 million at September 30, 2018.

Total loans, net of unearned income at September 30, 2019 were $233.3 million compared to $202.3 million at September 30, 2018.

Total deposits were $270.2 million at September 30, 2019 compared to total deposits of $219.7 million at September 30, 2018.

Credit Quality

The allowance for loan losses was $2,317,000, or 0.99% of loans, net of unearned income at September 30, 2019, compared to $2,022,000, or 1.00% of loans, net of unearned income at September 30, 2018. There were $32,000 in nonperforming assets at September 30, 2019 and no nonperforming assets at September 30, 2018.

Capital

At September 30, 2019, shareholders’ equity totaled $24.8 million compared to $21.7 million at September 30, 2018. Book value per share was $17.34 per share at September 30, 2019 compared to $15.47 per share at September 30, 2018. During the second quarter of 2018, the Company completed a private placement of $2.1 million of its common stock. In the offering, the Company issued 119,285 shares of its common stock at a purchase price of $17.5 per share.

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)
 

09/30/19

 

 

06/30/19

 

 

03/31/19

 

 

12/31/18

 

 

09/30/18

 
ASSETS
Cash and due from banks

$

9,271

 

$

11,122

 

$

5,744

 

$

7,002

 

$

5,275

 

Federal funds sold

 

21,117

 

 

13,520

 

 

8,836

 

 

20

 

 

20

 

Interest-bearing deposits

 

15,779

 

 

8,166

 

 

11,186

 

 

24,730

 

 

23,686

 

Investment securities

 

5,577

 

 

7,010

 

 

7,720

 

 

9,284

 

 

9,548

 

Loans held for sale

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Loans, net of unearned income

 

233,342

 

 

222,199

 

 

214,476

 

 

209,330

 

 

202,300

 

Allowance for loan losses

 

(2,317

)

 

(2,345

)

 

(2,235

)

 

(2,152

)

 

(2,022

)

Loans, net

 

231,025

 

 

219,854

 

 

212,241

 

 

207,178

 

 

200,278

 

Premises and equipment, net

 

11,297

 

 

11,316

 

 

10,154

 

 

8,740

 

 

7,777

 

Other assets

 

10,428

 

 

18,359

 

 

10,151

 

 

9,407

 

 

6,930

 

Total assets

$

304,494

 

$

289,347

 

$

266,032

 

$

266,361

 

$

253,514

 

 
LIABILITIES
Deposits:
Demand noninterest-bearing

$

59,432

 

$

54,439

 

$

50,564

 

$

50,862

 

$

49,063

 

Demand interest-bearing

 

52,024

 

 

48,839

 

 

38,434

 

 

37,875

 

 

34,312

 

Money market and savings

 

81,926

 

 

79,614

 

 

74,628

 

 

75,015

 

 

71,729

 

Time deposits of less than $100,000

 

18,957

 

 

19,331

 

 

15,099

 

 

15,778

 

 

16,456

 

Time deposits of $100,000 or more

 

57,854

 

 

53,940

 

 

52,250

 

 

52,763

 

 

48,155

 

Total deposits

 

270,193

 

 

256,163

 

 

230,975

 

 

232,293

 

 

219,715

 

Federal Home Loan Bank borrowings

 

3,000

 

 

3,000

 

 

6,000

 

 

6,000

 

 

6,000

 

Subordinated debentures

 

4,911

 

 

4,908

 

 

4,906

 

 

4,903

 

 

4,900

 

Interest payable and other liabilities

 

1,543

 

 

1,325

 

 

1,190

 

 

1,100

 

 

1,161

 

Total liabilities

 

279,647

 

 

265,396

 

 

243,071

 

 

244,296

 

 

231,776

 

 
SHAREHOLDERS' EQUITY
Common stock

 

15,146

 

 

15,122

 

 

15,088

 

 

15,001

 

 

15,584

 

Retained Earnings

 

9,626

 

 

8,753

 

 

7,842

 

 

7,058

 

 

6,173

 

Accumulated other comprehensive income (loss)

 

75

 

 

76

 

 

31

 

 

6

 

 

(19

)

Total shareholders' equity

 

24,847

 

 

23,951

 

 

22,961

 

 

22,065

 

 

21,738

 

Total liabilities and shareholders' equity

$

304,494

 

$

289,347

 

$

266,032

 

$

266,361

 

$

253,514

 

 
Total equity / total assets

 

8.16

%

 

8.28

%

 

8.63

%

 

8.28

%

 

8.57

%

Book value per share

$

17.34

 

$

16.71

 

$

16.02

 

$

15.56

 

$

15.47

 

 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
 
Three months ended Nine months ended
09/30/19 06/30/19 09/30/18 09/30/19 09/30/18
 
INTEREST INCOME
Loans

$

3,376

 

$

3,210

 

$

2,818

 

$

9,716

 

$

8,022

 

Federal funds sold

 

61

 

 

60

 

 

-

 

 

135

 

 

-

 

Investment securities

 

55

 

 

55

 

 

73

 

 

173

 

 

229

 

Other

 

113

 

 

80

 

 

155

 

 

314

 

 

367

 

Total interest income

 

3,605

 

 

3,405

 

 

3,046

 

 

10,338

 

 

8,618

 

 
INTEREST EXPENSE
Deposits:
Interest-bearing demand

 

40

 

 

27

 

 

21

 

 

89

 

 

48

 

Money market and savings

 

243

 

 

206

 

 

165

 

 

665

 

 

437

 

Time deposits

 

397

 

 

373

 

 

279

 

 

1,114

 

 

709

 

Other

 

108

 

 

108

 

 

119

 

 

333

 

 

363

 

Total interest expense

 

788

 

 

714

 

 

584

 

 

2,201

 

 

1,557

 

 
Net interest income

 

2,817

 

 

2,691

 

 

2,462

 

 

8,137

 

 

7,061

 

Provision for credit losses

 

40

 

 

110

 

 

75

 

 

240

 

 

179

 

Net interest income after provision for credit losses

 

2,777

 

 

2,581

 

 

2,387

 

 

7,897

 

 

6,882

 

 
NON-INTEREST INCOME
Service charges on deposit accounts

 

64

 

 

85

 

 

57

 

 

194

 

 

164

 

Gain on sale of loans

 

-

 

 

268

 

 

57

 

 

417

 

 

74

 

Gain (loss) on sale of other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Gain (loss) on sale of securities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Other non-interest income

 

140

 

 

123

 

 

101

 

 

394

 

 

296

 

Total non-interest income

 

204

 

 

476

 

 

215

 

 

1,005

 

 

534

 

 
OPERATING EXPENSES
Salaries and benefits

 

907

 

 

908

 

 

865

 

 

2,749

 

 

2,555

 

Premises and fixed assets

 

228

 

 

210

 

 

156

 

 

620

 

 

454

 

Other

 

621

 

 

657

 

 

637

 

 

1,918

 

 

1,773

 

Total operating expenses

 

1,756

 

 

1,775

 

 

1,658

 

 

5,287

 

 

4,782

 

 
Income before income taxes

 

1,225

 

 

1,282

 

 

944

 

 

3,615

 

 

2,634

 

Income taxes

 

353

 

 

371

 

 

278

 

 

1,047

 

 

742

 

 
NET INCOME

$

872

 

$

911

 

$

666

 

$

2,568

 

$

1,892

 

 
EARNINGS PER SHARE
Basic earnings per share

$

0.61

 

$

0.64

 

$

0.47

 

$

1.79

 

$

1.40

 

Diluted earnings per share

$

0.57

 

$

0.60

 

$

0.43

 

$

1.69

 

$

1.26

 

Average common shares outstanding

 

1,433,041

 

 

1,433,041

 

 

1,405,541

 

 

1,432,766

 

 

1,351,844

 

Average common and equivalent shares outstanding

 

1,519,531

 

 

1,519,821

 

 

1,551,475

 

 

1,518,688

 

 

1,497,759

 

 
PERFORMANCE MEASURES
Return on average assets

 

1.18

%

 

1.34

%

 

1.06

%

 

1.23

%

 

1.05

%

Return on average equity

 

14.18

%

 

15.47

%

 

12.37

%

 

14.50

%

 

12.59

%

Net interest margin

 

4.15

%

 

4.36

%

 

4.14

%

 

4.28

%

 

4.16

%

Efficiency ratio

 

58.13

%

 

56.05

%

 

61.94

%

 

57.83

%

 

62.96

%

 

Contacts

Jeffrey P. Finck
President & CEO
530.222.1460

Patrick E. Phelan
Chief Financial Officer
530.222.1460

Contacts

Jeffrey P. Finck
President & CEO
530.222.1460

Patrick E. Phelan
Chief Financial Officer
530.222.1460