Business Wire | Jan 21, 2021 06:42PM EST

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

Jan. 21, 2021

RED BLUFF, Calif.--(BUSINESS WIRE)--Jan. 21, 2021--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.

CORNERSTONECOMMUNITY BANCORPCONSOLIDATEDBALANCE SHEETS(UNAUDITED)(Dollars inThousands) 12/31/20 09/30/20 06/30/20 03/31/20 12/31/19 ASSETSCash and due from $ 3,811 $ 5,455 $ 6,350 $ 4,965 $ 6,038 banksFederal funds sold 14,166 5,045 10,402 17,385 4,575

Interest-bearing 77,045 62,110 73,310 18,928 2,825 depositsInvestment 50,336 50,699 16,173 13,144 13,355 securitiesLoans held for sale - - - - -

Loans, net of 332,176 342,416 333,620 250,353 241,662 unearned incomeAllowance for loan (4,009 ) (4,009 ) (4,009 ) (3,859 ) (2,409 )lossesLoans, net 328,167 338,407 329,611 246,494 239,253

Premises and 11,581 10,992 11,095 11,180 11,216 equipment, netOther assets 12,255 12,577 11,882 11,330 11,093

Total assets $ 497,361 $ 485,285 $ 458,823 $ 323,426 $ 288,355

LIABILITIESDeposits:Demand $ 108,147 $ 103,824 $ 96,395 $ 58,357 $ 52,352 noninterest-bearingDemand 108,097 104,819 90,633 51,608 52,058 interest-bearingMoney market and 146,655 87,035 79,550 77,273 74,560 savingsTime deposits of 15,418 21,103 22,925 26,503 18,395 less than $100,000Time deposits of 55,021 54,695 51,919 54,274 56,016 $100,000 or moreTotal deposits 433,338 371,476 341,422 268,015 253,381

Borrowings and 15,000 78,136 83,136 23,000 3,000 other obligationsSubordinated 16,645 4,923 4,920 4,917 4,914 debenturesInterest payable 2,294 1,854 1,765 1,382 1,235 and otherliabilitiesTotal liabilities 467,277 456,389 431,243 297,314 262,530

SHAREHOLDERS'EQUITYCommon 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 364 357 299 219 51 comprehensiveincome (loss)Total shareholders' 30,084 28,896 27,580 26,112 25,825 equityTotal liabilities $ 497,361 $ 485,285 $ 458,823 $ 323,426 $ 288,355 and shareholders'equity Total equity / 6.05 % 5.95 % 6.01 % 8.07 % 8.96 %total assetsBook value per $ 20.87 $ 19.38 $ 18.50 $ 17.63 $ 17.79 shareShares outstanding 1,441,241 1,491,041 1,491,041 1,481,041 1,452,041

CORNERSTONE COMMUNITY BANCORPCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(Dollars in Thousands)Three months endedYear ended12/31/2009/30/2012/31/1912/31/2012/31/19INTEREST INCOMELoans$

4,761

$

3,695

$

3,349

$

15,424

$

13,065

Federal funds sold2

1

40

24

175

Investment securities162

161

65

495

238

Other51

33

130

174

444

Total interest income4,976

3,890

3,584

16,117

13,922

INTEREST EXPENSEDeposits:Interest-bearing demand55

51

50

181

139

Money market and savings80

79

241

464

906

Time deposits155

198

351

944

1,465

Other221

186

108

692

441

Total interest expense511

514

750

2,281

2,951

Net interest income4,465

3,376

2,834

13,836

10,971

Provision for credit losses-

-

100

1,600

340

Net interest income after provisionfor credit losses4,465

3,376

2,734

12,236

10,631

NON-INTEREST INCOMEService charges on deposit accounts55

49

61

222

255

Gain on sale of loans61

-

-

247

417

Gain (loss) on sale of other real estate owned-

-

-

-

-

Gain (loss) on sale of securities-

91

-

91

-

Other non-interest income229

156

140

679

534

Total non-interest income345

296

201

1,239

1,206

OPERATING EXPENSESSalaries and benefits970

979

887

3,280

3,636

Premises and fixed assets182

200

239

891

859

Other757

760

658

2,985

2,576

Total operating expenses1,909

1,939

1,784

7,156

7,071

Income before income taxes2,901

1,733

1,151

6,319

4,766

Income taxes842

497

267

1,693

1,314

NET INCOME$

2,059

$

1,236

$

884

$

4,626

$

3,452

EARNINGS PER SHAREBasic 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 outstanding1,477,361

1,491,041

1,442,639

1,483,575

1,435,255

Average common and equivalentshares outstanding1,511,365

1,522,872

1,527,238

1,522,714

1,521,093

PERFORMANCE MEASURESReturn on average assets1.68

%

1.05

%

1.16

%

1.09

%

1.22

%

Return on average equity27.70

%

17.36

%

13.87

%

16.53

%

14.33

%

Tax-equivalent net interest margin3.81

%

2.99

%

4.03

%

3.45

%

4.21

%

Efficiency ratio39.69

%

52.81

%

58.78

%

47.47

%

58.07

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210121005993/en/

CONTACT: Jeffrey P. Finck President & CEO 530.222.1460

CONTACT: Patrick E. Phelan Chief Financial Officer 530.222.1460