Cornerstone Community Bancorp Reports Financial Results for the First Quarter Ended March 31, 2020

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

The Company reported net income of $47,000 for the three months ended March 31, 2020 compared to net income of $785,000 for the same period last year. Diluted earnings per share were $0.03 for the three months ended March 31, 2020 compared to $0.52 for the same period last year. Net income reflected a $1.5 million provision for credit losses related to the economic uncertainties of the COVID-19 pandemic.

President and CEO, Jeff Finck, stated, “We’ve been focused on the health and safety of our employees and customers and helping them with loan payment deferrals and government relief programs. The Company is well-capitalized and has sufficient liquidity and financial strength to continue to meet the needs our community during this time of crisis. Our entire team has been working hard to serve our customers. We are participating in the Small Business Administration’s Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. To date, we’ve funded over 300 loans totaling over $65 million under the Paycheck Protection Program.”

Net Interest Income

Net interest income increased to $2,842,000 for the quarter ended March 31, 2020 compared to $2,629,000 for the same quarter last year.

Provision for credit losses

The Company recorded a $1,450,0000 provision for credit losses for the quarter ended March 31, 2020 compared to $90,000 for the same quarter last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2020 was $394,000 compared to $325,000 for the quarter ended March 31, 2019.

Non-Interest Expense

Non-interest expense was $1,898,000 for the quarter ended March 31, 2020 compared to $1,756,000 for the same period last year.

Income Taxes

The first quarter 2020 provision for income tax was impacted by tax benefits from the exercise of stock options.

Balance Sheet

The Company had total assets at March 31, 2020 of $323.4 million compared to $266.0 million at March 31, 2019.

Total loans, net of unearned income at March 31, 2020 were $250.4 million compared to $214.5 million at March 31, 2019.

Total deposits were $268.0 million at March 31, 2020 compared to total deposits of $231.0 million at March 31, 2019.

Credit Quality

The allowance for loan losses was $3,859,000, or 1.54% of loans, net of unearned income at March 31, 2020, compared to $2,235,000, or 1.04% of loans, net of unearned income at March 31, 2019. There were no nonperforming assets at March 31, 2020 and March 31, 2019.

Capital

At March 31, 2020, shareholders’ equity totaled $26.1 million compared to $23.0 million at March 31, 2019. Book value per share was $17.63 per share at March 31, 2020 compared to $16.02 per share at March 31, 2019.

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)
 
 
 
03/31/20 12/31/19 09/30/19 06/30/19 03/31/19
 
ASSETS
Cash and due from banks

$

4,965

 

$

6,038

 

$

9,271

 

$

11,122

 

$

5,744

 

Federal funds sold

 

17,385

 

 

4,575

 

 

21,117

 

 

13,520

 

 

8,836

 

Interest-bearing deposits

 

18,928

 

 

2,825

 

 

15,779

 

 

8,166

 

 

11,186

 

Investment securities

 

13,144

 

 

13,355

 

 

5,577

 

 

7,010

 

 

7,720

 

Loans held for sale

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Loans, net of unearned income

 

250,353

 

 

241,662

 

 

233,342

 

 

222,199

 

 

214,476

 

Allowance for loan losses

 

(3,859

)

 

(2,409

)

 

(2,317

)

 

(2,345

)

 

(2,235

)

Loans, net

 

246,494

 

 

239,253

 

 

231,025

 

 

219,854

 

 

212,241

 

Premises and equipment, net

 

11,180

 

 

11,216

 

 

11,297

 

 

11,316

 

 

10,154

 

Other assets

 

11,330

 

 

11,093

 

 

10,428

 

 

18,359

 

 

10,151

 

Total assets

$

323,426

 

$

288,355

 

$

304,494

 

$

289,347

 

$

266,032

 

 
LIABILITIES
Deposits:
Demand noninterest-bearing

$

58,357

 

$

52,352

 

$

59,432

 

$

54,439

 

$

50,564

 

Demand interest-bearing

 

51,608

 

 

52,058

 

 

52,024

 

 

48,839

 

 

38,434

 

Money market and savings

 

77,273

 

 

74,560

 

 

81,926

 

 

79,614

 

 

74,628

 

Time deposits of less than $100,000

 

26,503

 

 

18,395

 

 

18,957

 

 

19,331

 

 

15,099

 

Time deposits of $100,000 or more

 

54,274

 

 

56,016

 

 

57,854

 

 

53,940

 

 

52,250

 

Total deposits

 

268,015

 

 

253,381

 

 

270,193

 

 

256,163

 

 

230,975

 

Federal Home Loan Bank borrowings

 

23,000

 

 

3,000

 

 

3,000

 

 

3,000

 

 

6,000

 

Subordinated debentures

 

4,917

 

 

4,914

 

 

4,911

 

 

4,908

 

 

4,906

 

Interest payable and other liabilities

 

1,382

 

 

1,235

 

 

1,543

 

 

1,325

 

 

1,190

 

Total liabilities

 

297,314

 

 

262,530

 

 

279,647

 

 

265,396

 

 

243,071

 

 
SHAREHOLDERS' EQUITY
Common stock

 

15,336

 

 

15,264

 

 

15,146

 

 

15,122

 

 

15,088

 

Retained Earnings

 

10,557

 

 

10,510

 

 

9,626

 

 

8,753

 

 

7,842

 

Accumulated other comprehensive income (loss)

 

219

 

 

51

 

 

75

 

 

76

 

 

31

 

Total shareholders' equity

 

26,112

 

 

25,825

 

 

24,847

 

 

23,951

 

 

22,961

 

Total liabilities and shareholders' equity

$

323,426

 

$

288,355

 

$

304,494

 

$

289,347

 

$

266,032

 

 
Total equity / total assets

 

8.07

%

 

8.96

%

 

8.16

%

 

8.28

%

 

8.63

%

Book value per share

$

17.63

 

$

17.79

 

$

17.34

 

$

16.71

 

$

16.02

 

Shares outstanding

 

1,481,041

 

 

1,452,041

 

 

1,433,041

 

 

1,433,041

 

 

1,433,041

 

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
 
 
 
 
Three months ended
03/31/20 12/31/19 03/31/19
 
INTEREST INCOME
Loans

$

3,356

 

$

3,349

 

$

3,130

 

Federal funds sold

 

17

 

 

40

 

 

14

 

Investment securities

 

90

 

 

65

 

 

63

 

Other

 

45

 

 

130

 

 

121

 

Total interest income

 

3,508

 

 

3,584

 

 

3,328

 

 
INTEREST EXPENSE
Deposits:
Interest-bearing demand

 

35

 

 

50

 

 

22

 

Money market and savings

 

186

 

 

241

 

 

216

 

Time deposits

 

331

 

 

351

 

 

344

 

Other

 

114

 

 

108

 

 

117

 

Total interest expense

 

666

 

 

750

 

 

699

 

 
Net interest income

 

2,842

 

 

2,834

 

 

2,629

 

Provision for credit losses

 

1,450

 

 

100

 

 

90

 

Net interest income after provision
for credit losses

 

1,392

 

 

2,734

 

 

2,539

 

 
NON-INTEREST INCOME
Service charges on deposit accounts

 

72

 

 

61

 

 

45

 

Gain on sale of loans

 

186

 

 

-

 

 

149

 

Gain (loss) on sale of other real estate owned

 

-

 

 

-

 

 

-

 

Gain (loss) on sale of securities

 

-

 

 

-

 

 

-

 

Other non-interest income

 

136

 

 

140

 

 

131

 

Total non-interest income

 

394

 

 

201

 

 

325

 

 
OPERATING EXPENSES
Salaries and benefits

 

939

 

 

887

 

 

934

 

Premises and fixed assets

 

252

 

 

239

 

 

182

 

Other

 

707

 

 

658

 

 

640

 

Total operating expenses

 

1,898

 

 

1,784

 

 

1,756

 

 
Income before income taxes

 

(112

)

 

1,151

 

 

1,108

 

Income taxes

 

(159

)

 

267

 

 

323

 

 
NET INCOME

$

47

 

$

884

 

$

785

 

 
EARNINGS PER SHARE
Basic earnings per share

$

0.03

 

$

0.61

 

$

0.55

 

Diluted earnings per share

$

0.03

 

$

0.58

 

$

0.52

 

Average common shares outstanding

 

1,480,668

 

 

1,442,639

 

 

1,432,208

 

Average common and equivalent
shares outstanding

 

1,532,685

 

 

1,527,238

 

 

1,516,515

 

 
PERFORMANCE MEASURES
Return on average assets

 

0.06

%

 

1.16

%

 

1.18

%

Return on average equity

 

0.71

%

 

13.87

%

 

13.84

%

Net interest margin

 

4.09

%

 

4.03

%

 

4.35

%

Efficiency ratio

 

58.65

%

 

58.78

%

 

59.44

%

 

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