Business Wire | Oct 19, 2021 08:33AM EDT

Cornerstone Community Bancorp Reports Financial Results for the Third Quarter Ended September 30, 2021

Oct. 19, 2021

RED BLUFF, Calif.--(BUSINESS WIRE)--Oct. 19, 2021--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the third quarter ended September 30, 2021.

The Company reported record net income of $2,085,000 for the three months ended September 30, 2021 compared to net income of $1,236,000 for the same period last year. Diluted earnings per share were $1.38 for the three months ended September 30, 2021 compared to $0.81 for the same period last year.

The return on average assets for the three months ended September 30, 2021 was 1.53% and the return on average equity was 23.52%. The tax-equivalent net interest margin was 3.66% for the three months ended September 30, 2021 compared to 2.99% for the same period last year and the efficiency ratio was 39.07% for the three months ended September 30, 2021 compared to 52.81% for the same period last year.

For the nine months ended September 30, 2021, the Company reported net income of $5,948,000 compared to net income of $2,567,000 for the same period last year. Diluted earnings per share were $3.96 for the nine months ended September 30, 2021 compared to $1.68 for the same period last year.

The return on average assets for the nine months ended September 30, 2021 was 1.48% and the return on average equity was 23.98%.

President and CEO, Jeff Finck stated, "We posted record profits in the third quarter as loan and deposit totals continued to grow at a solid pace."

Net Interest Income

Net interest income increased to $4,756,000 for the quarter ended September 30, 2021 compared to $3,376,000 for the same quarter last year. For the nine months ended September 30, 2021, net interest income increased to $13,212,000 compared to $9,371,000 for the same period last year.

Provision for credit losses

Provision for credit losses were $400,000 for the quarter ended September 30, 2021 compared to no provision for the same quarter last year. For the nine months ended September 30, 2021, the Company recorded a $900,000 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 September 30, 2021 was $714,000 compared to $296,000 for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, non-interest income was $2,013,000 compared to $894,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $2,137,000 for the quarter ended September 30, 2021 compared to $1,939,000 for the same period last year. For the nine months ended September 30, 2021, non-interest expense was $5,965,000 compared to $5,247,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income at September 30, 2021 were $388.5 million compared to $342.4 million at September 30, 2020.

Total deposits were $500.1 million at September 30, 2021 compared to total deposits of $371.5 million at September 30, 2020.

Credit Quality

The allowance for loan losses was $4,909,000, or 1.26% of loans, net of unearned income at September 30, 2021, compared to $4,009,000, or 1.17% of loans, net of unearned income at September 30, 2020. There were no nonperforming assets at September 30, 2021 and September 30, 2020.

Capital

At September 30, 2021, shareholders' equity totaled $35.5 million compared to $28.9 million at September 30, 2020. Book value was $24.37 per share at September 30, 2021 compared to $19.38 per share at September 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) 09/30/21 06/30/21 03/31/21 12/31/20 09/30/20

ASSETSCash and due from $ 4,765 $ 5,450 $ 5,417 $ 3,811 $ 5,455 banksFederal funds sold 2,600 2,256 5,761 14,166 5,045

Interest-bearing 24,636 28,549 68,283 77,045 62,110 depositsInvestment 110,470 75,258 52,084 50,336 50,699 securitiesLoans held for sale - - 1,102 - -

Loans, net of 388,532 390,748 382,253 332,176 342,416 unearned incomeAllowance for loan (4,909 ) (4,509 ) (4,409 ) (4,009 ) (4,009 )lossesLoans, net 383,623 386,239 377,844 328,167 338,407

Premises and 13,567 13,013 12,767 11,581 10,992 equipment, netOther assets 14,863 14,972 13,974 12,724 12,577

Total assets $ 554,524 $ 525,737 $ 537,232 $ 497,830 $ 485,285

LIABILITIESDeposits:Demand $ 141,734 $ 126,107 $ 126,481 $ 108,147 $ 103,824 noninterest-bearingDemand 131,964 126,724 122,506 108,097 104,819 interest-bearingMoney market and 150,149 150,086 163,232 146,655 87,035 savingsTime deposits of 13,180 13,393 15,812 15,418 21,103 less than $100,000Time deposits of 63,111 56,993 57,299 55,021 54,695 $100,000 or moreTotal deposits 500,138 473,303 485,330 433,338 371,476

Borrowings and 5,000 5,000 5,000 15,000 78,136 other obligationsSubordinated 11,715 11,709 11,703 16,645 4,923 debenturesInterest payable 2,151 1,933 3,776 2,763 1,854 and otherliabilitiesTotal liabilities 519,004 491,945 505,809 467,746 456,389

SHAREHOLDERS'EQUITYCommon stock 14,814 14,771 14,681 14,584 15,462

Retained Earnings 21,084 18,999 17,183 15,136 13,077

Accumulated other (378 ) 22 (441 ) 364 357 comprehensiveincome (loss)Total shareholders' 35,520 33,792 31,423 30,084 28,896 equityTotal liabilities $ 554,524 $ 525,737 $ 537,232 $ 497,830 $ 485,285 and shareholders'equity Total equity / 6.41 % 6.43 % 5.85 % 6.04 % 5.95 %total assetsBook value per $ 24.37 $ 23.22 $ 21.65 $ 20.87 $ 19.38 shareShares outstanding 1,457,591 1,455,091 1,451,091 1,441,241 1,491,041

CORNERSTONE COMMUNITY BANCORPCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(Dollars in Thousands)Three months ended

Nine months ended

09/30/21

06/30/21

09/30/20

09/30/21

09/30/20

INTEREST INCOMELoans$

4,772

$

4,379

$

3,695

$

13,602

$

10,663

Federal funds sold-

1

1

3

22

Investment securities360

217

161

739

333

Other35

53

33

120

123

Total interest income5,167

4,650

3,890

14,464

11,141

INTEREST EXPENSEDeposits:Interest-bearing demand46

45

51

138

126

Money market and savings96

93

79

276

384

Time deposits107

114

198

345

789

Other162

159

186

493

471

Total interest expense411

411

514

1,252

1,770

Net interest income4,756

4,239

3,376

13,212

9,371

Provision for credit losses400

100

-

900

1,600

Net interest income after provision for credit losses4,356

4,139

3,376

12,312

7,771

NON-INTEREST INCOMEService charges on deposit accounts62

59

49

179

167

Gain on sale of loans396

135

-

1,231

186

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

-

-

-

-

Gain (loss) on sale of securities-

-

91

(45

)

91

Other non-interest income256

228

156

648

450

Total non-interest income714

422

296

2,013

894

OPERATING EXPENSESSalaries and benefits1,048

968

979

2,695

2,310

Premises and fixed assets212

199

200

590

709

Other877

848

760

2,680

2,228

Total operating expenses2,137

2,015

1,939

5,965

5,247

Income before income taxes2,933

2,546

1,733

8,360

3,418

Income taxes848

730

497

2,412

851

NET INCOME$

2,085

$

1,816

$

1,236

$

5,948

$

2,567

EARNINGS PER SHAREBasic earnings per share$

1.43

$

1.25

$

0.83

$

4.09

$

1.73

Diluted earnings per share$

1.38

$

1.20

$

0.81

$

3.96

$

1.68

Average common shares outstanding1,456,531

1,453,915

1,491,041

1,452,768

1,485,661

Average common and equivalent shares outstanding1,512,738

1,510,621

1,522,872

1,503,150

1,526,516

PERFORMANCE MEASURESReturn on average assets1.53

%

1.35

%

1.05

%

1.48

%

0.85

%

Return on average equity23.52

%

22.17

%

17.36

%

23.98

%

12.49

%

Tax-equivalent net interest margin3.66

%

3.33

%

2.99

%

3.48

%

3.28

%

Efficiency ratio39.07

%

43.23

%

52.81

%

39.18

%

51.12

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20211019005728/en/

CONTACT: Jeffrey P. Finck President & CEO 530.222.1460

CONTACT: Patrick E. Phelan Chief Financial Officer 530.222.1460