Business Wire | Jul 22, 2021 05:21PM EDT

Cornerstone Community Bancorp Reports Financial Results For the Second Quarter Ended June 30, 2021

Jul. 22, 2021

RED BLUFF, Calif.--(BUSINESS WIRE)--Jul. 22, 2021--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the second quarter ended June 30, 2021.

The Company reported net income of $1,816,000 for the three months ended June 30, 2021 compared to net income of $1,284,000 for the same period last year. Diluted earnings per share were $1.20 for the three months ended June 30, 2021 compared to $0.84 for the same period last year.

The return on average assets for the three months ended June 30, 2021 was 1.35% and the return on average equity was 22.17%. The tax-equivalent net interest margin was 3.33% for the three months ended June 30, 2021 compared to 3.06% for the same period last year and the efficiency ratio was 43.23% for the three months ended June 30, 2021 compared to 42.00% for the same period last year.

For the six months ended June 30, 2021, the Company reported net income of $3,863,000 compared to net income of $1,331,000 for the same period last year. Diluted earnings per share were $2.58 for the six months ended June 30, 2021 compared to $0.87 for the same period last year.

The return on average assets for the six months ended June 30, 2021 was 1.45% and the return on average equity was 24.24%.

President and CEO, Jeff Finck stated, "We continue to grow loans, deposits and earnings. Asset quality remains strong with no nonperforming assets."

Net Interest Income

Net interest income increased to $4,239,000 for the quarter ended June 30, 2021 compared to $3,153,000 for the same quarter last year. For the six months ended June 30, 2021, net interest income increased to $8,456,000 compared to $5,995,000 for the same period last year.

Provision for credit losses

Provision for credit losses were $100,000 for the quarter ended June 30, 2021 compared to $150,000 for the same quarter last year. For the six months ended June 30, 2021, the Company recorded a $500,000 provision for credit losses compared to $1,600,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended June 30, 2021 was $422,000 compared to $204,000 for the quarter ended June 30, 2020. For the six months ended June 30, 2021, non-interest income was $1,299,000 compared to $598,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $2,015,000 for the quarter ended June 30, 2021 compared to $1,410,000 for the same period last year. For the six months ended June 30, 2021, non-interest expense was $3,828,000 compared to $3,308,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income at June 30, 2021 were $390.7 million compared to $333.6 million at June 30, 2020.

Total deposits were $473.3 million at June 30, 2021 compared to total deposits of $341.4 million at June 30, 2020.

Credit Quality

The allowance for loan losses was $4,509,000, or 1.15% of loans, net of unearned income at June 30, 2021, compared to $4,009,000, or 1.20% of loans, net of unearned income at June 30, 2020. There were no nonperforming assets at June 30, 2021 and June 30, 2020.

Capital

At June 30, 2021, shareholders' equity totaled $33.8 million compared to $27.6 million at June 30, 2020. Book value was $23.22 per share at June 30, 2021 compared to $18.50 per share at June 30, 2020.

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 2021), 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 BANCORPCONSOLIDATED BALANCE SHEETS (UNAUDITED)(Dollars in Thousands) 06/30/21 03/31/21 12/31/20 09/30/20 06/30/20 ASSETS Cash and due from $ 5,450 $ 5,417 $ 3,811 $ 5,455 $ 6,350 banksFederal funds sold 2,256 5,761 14,166 5,045 10,402

Interest-bearing 28,549 68,283 77,045 62,110 73,310 depositsInvestment 75,258 52,084 50,336 50,699 16,173 securitiesLoans held for sale - 1,102 - - -

Loans, net of 390,748 382,253 332,176 342,416 333,620 unearned incomeAllowance for loan (4,509 ) (4,409 ) (4,009 ) (4,009 ) (4,009 )lossesLoans, net 386,239 377,844 328,167 338,407 329,611

Premises and 13,013 12,767 11,581 10,992 11,095 equipment, netOther assets 14,972 13,974 12,724 12,577 11,882

Total assets $ 525,737 $ 537,232 $ 497,830 $ 485,285 $ 458,823

LIABILITIES Deposits: Demand $ 126,107 $ 126,481 $ 108,147 $ 103,824 $ 96,395 noninterest-bearingDemand 126,724 122,506 108,097 104,819 90,633 interest-bearingMoney market and 150,086 163,232 146,655 87,035 79,550 savingsTime deposits of 13,393 15,812 15,418 21,103 22,925 less than $100,000Time deposits of 56,993 57,299 55,021 54,695 51,919 $100,000 or moreTotal deposits 473,303 485,330 433,338 371,476 341,422

Borrowings and 5,000 5,000 15,000 78,136 83,136 other obligationsSubordinated 11,709 11,703 16,645 4,923 4,920 debenturesInterest payable 1,933 3,776 2,763 1,854 1,765 and other liabilitiesTotal liabilities 491,945 505,809 467,746 456,389 431,243

SHAREHOLDERS' EQUITYCommon stock 14,771 14,681 14,584 15,462 15,440

Retained Earnings 18,999 17,183 15,136 13,077 11,841

Accumulated other 22 (441 ) 364 357 299 comprehensive income (loss)Total shareholders' 33,792 31,423 30,084 28,896 27,580 equityTotal liabilities $ 525,737 $ 537,232 $ 497,830 $ 485,285 $ 458,823 and shareholders' equity Total equity / 6.43 % 5.85 % 6.04 % 5.95 % 6.01 %total assetsBook value per $ 23.22 $ 21.65 $ 20.87 $ 19.38 $ 18.50 shareShares outstanding 1,455,091 1,451,091 1,441,241 1,491,041 1,491,041

CORNERSTONE COMMUNITY BANCORPCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(Dollars in Thousands)Three months endedSix months ended06/30/2103/31/2106/30/2006/30/2106/30/20INTEREST INCOMELoans$

4,379

$

4,451

$

3,612

$

8,830

$

6,968

Federal funds sold1

2

4

3

21

Investment securities217

162

82

379

172

Other53

32

45

85

90

Total interest income4,650

4,647

3,743

9,297

7,251

INTEREST EXPENSEDeposits:Interest-bearing demand45

47

40

92

75

Money market and savings93

87

119

180

305

Time deposits114

124

260

238

591

Other159

172

171

331

285

Total interest expense411

430

590

841

1,256

Net interest income4,239

4,217

3,153

8,456

5,995

Provision for credit losses100

400

150

500

1,600

Net interest income after provision for credit losses4,139

3,817

3,003

7,956

4,395

NON-INTEREST INCOMEService charges on deposit accounts59

58

46

117

118

Gain on sale of loans135

700

-

835

186

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

-

-

-

-

Gain (loss) on sale of securities-

(45

)

-

(45

)

-

Other non-interest income228

164

158

392

294

Total non-interest income422

877

204

1,299

598

OPERATING EXPENSESSalaries and benefits968

679

392

1,647

1,331

Premises and fixed assets199

179

257

378

509

Other848

956

761

1,803

1,468

Total operating expenses2,015

1,814

1,410

3,828

3,308

Income before income taxes2,546

2,880

1,797

5,427

1,685

Income taxes730

834

513

1,564

354

NET INCOME$

1,816

$

2,046

$

1,284

$

3,863

$

1,331

EARNINGS PER SHAREBasic earnings per share$

1.25

$

1.41

$

0.86

$

2.66

$

0.90

Diluted earnings per share$

1.20

$

1.38

$

0.84

$

2.58

$

0.87

Average common shares outstanding1,453,915

1,447,763

1,485,217

1,450,856

1,482,942

Average common and equivalent shares outstanding1,510,621

1,485,953

1,523,322

1,497,565

1,528,547

PERFORMANCE MEASURESReturn on average assets1.35

%

1.56

%

1.18

%

1.45

%

0.72

%

Return on average equity22.17

%

26.41

%

18.92

%

24.24

%

9.90

%

Tax-equivalent net interest margin3.33

%

3.43

%

3.06

%

3.38

%

3.48

%

Efficiency ratio43.23

%

35.61

%

42.00

%

39.24

%

50.17

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722006021/en/

CONTACT: Jeffrey P. Finck President & CEO 530.222.1460

CONTACT: Patrick E. Phelan Chief Financial Officer 530.222.1460