Cornerstone Community Bancorp Reports Financial Results For the First Quarter Ended March 31, 2019

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the first quarter ended March 31, 2019.

The Company reported net income of $785,000 for the three months ended March 31, 2019 compared to net income of $562,000 for the same period last year. Diluted earnings per share were $0.52 for the three months ended March 31, 2019 compared to $0.39 for the same period last year.

The return on average assets for the three months ended March 31, 2019 was 1.18% and the return on average equity was 13.84%. The net interest margin expanded to 4.35% for the three months ended March 31, 2019 compared to 4.10% for the same period last year and the efficiency ratio declined to 59.44% for the three months ended March 31, 2019 compared to 66.05% for the same period last year.

President and CEO, Jeff Finck, stated, We are off to a solid start in 2019 with continued growth in loans and deposits. In the next few months, we will be relocating just down the street from our East Cypress Avenue location to our newly constructed building on Hartnell Avenue.

Net Interest Income

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Net interest income increased to $2,629,000 for the quarter ended March 31, 2019 compared to $2,228,000 for the same quarter last year.

Provision for credit losses

The Company recorded a $90,000 provision for credit losses for the quarter ended March 31, 2019 compared to $64,000 for the same quarter last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2019 was $325,000 compared to $161,000 for the quarter ended March 31, 2018.

Non-Interest Expense

Non-interest expense was $1,756,000 for the quarter ended March 31, 2019 compared to $1,578,000 for the same period last year.

Balance Sheet

The Company had total assets at March 31, 2019 of $266.0 million compared to $240.7 million at March 31, 2018.

Total loans, net of unearned income at March 31, 2019 were $214.5 million compared to $188.9 million at March 31, 2018.

Total deposits were $231.0 million at March 31, 2019 compared to total deposits of $207.6 million at March 31, 2018.

Credit Quality

The allowance for loan losses was $2,235,000, or 1.04% of loans, net of unearned income at March 31, 2019, compared to $1,907,000, or 1.01% of loans, net of unearned income at March 31, 2018. There were no nonperforming assets at March 31, 2019 and March 31, 2018.

Capital

At March 31, 2019, shareholders equity totaled $23.0 million compared to $18.3 million at March 31, 2018. Book value per share increased by 12.7% to $16.02 per share at March 31, 2019 compared to $14.22 per share at March 31, 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 Bancorps 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)
 
  03/31/19   12/31/18   09/30/18   06/30/18   03/31/18
       
ASSETS
Cash and due from banks $ 5,744 $ 7,002 $ 5,275 $ 4,139 $ 3,364
Federal funds sold 8,836 20 20 20 20
Interest-bearing deposits 11,186 24,730 23,686 24,066 24,932
Investment securities 7,720 9,284 9,548 10,651 10,942
Loans held for sale 1,849
Loans, net of unearned income 214,476 209,330 202,300 193,989 188,883
Allowance for loan losses   (2,235)     (2,152)     (2,022)     (1,947)     (1,907)
Loans, net 212,241 207,178 200,278 192,042 186,976
Premises and equipment, net 10,154 8,740 7,777 6,958 5,846
Other assets   10,151     9,407     6,930     6,877     6,753
Total assets $ 266,032   $ 266,361   $ 253,514   $ 244,753   $ 240,682
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 50,564 $ 50,862 $ 49,063 $ 44,751 $ 42,223
Demand interest-bearing 38,434 37,875 34,312 29,565 27,514
Money market and savings 74,628 75,015 71,729 72,319 73,936
Time deposits of less than $100,000 15,099 15,778 16,456 19,482 17,959
Time deposits of $100,000 or more   52,250     52,763     48,155     45,671     45,933
Total deposits 230,975 232,293 219,715 211,788 207,565
Federal Home Loan Bank borrowings 6,000 6,000 6,000 6,000 9,000
Subordinated debentures 4,906 4,903 4,900 4,897 4,895
Interest payable and other liabilities   1,190     1,100     1,161     1,021     933
Total liabilities   243,071     244,296     231,776     223,706     222,393
 
SHAREHOLDERS’ EQUITY
Common stock 15,088 15,001 15,584 15,551 13,429
Retained Earnings 7,842 7,058 6,173 5,507 4,843
Accumulated other comprehensive income (loss)   31     6     (19)     (11)     17
Total shareholders’ equity   22,961     22,065     21,738     21,047     18,289
Total liabilities and shareholders’ equity $ 266,032   $ 266,361   $ 253,514   $ 244,753   $ 240,682
 
Total equity / total assets 8.63% 8.28% 8.57% 8.60% 7.60%
Book value per share $ 16.02 $ 15.56 $ 15.47 $ 14.97 $ 14.22
 
 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
 
  Three months ended
03/31/19   12/31/18   03/31/18
   
INTEREST INCOME
Loans $ 3,130 $ 2,966 $ 2,531
Federal funds sold 14
Investment securities 63 70 78
Other   121     198     88
Total interest income   3,328     3,234     2,697
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 22 22 14
Money market and savings 216 177 127
Time deposits 344 317 203
Other   117     119     125
Total interest expense   699     635     469
 
Net interest income 2,629 2,599 2,228
Provision for credit losses   90     130     64
Net interest income after provision
for credit losses   2,539     2,469     2,164
 
NON-INTEREST INCOME
Service charges on deposit accounts 45 59 49
Gain on sale of loans 149 17
Gain (loss) on sale of other real estate owned
Gain (loss) on sale of securities
Other non-interest income   131     102     95
Total non-interest income   325     161     161
 
OPERATING EXPENSES
Salaries and benefits 934 887 876
Premises and fixed assets 182 173 150
Other   640     617     552
Total operating expenses   1,756     1,677     1,578
 
Income before income taxes 1,108 953 747
Income taxes 323 69 185
         
NET INCOME $ 785   $ 884   $ 562
 
EARNINGS PER SHARE
Basic earnings per share $ 0.55   $ 0.63   $ 0.44
Diluted earnings per share $ 0.52   $ 0.57   $ 0.39
Average common shares outstanding   1,432,208     1,407,785     1,276,923
Average common and equivalent
shares outstanding   1,516,515     1,541,133     1,424,197
 
PERFORMANCE MEASURES
Return on average assets 1.18% 1.36% 0.96%
Return on average equity 13.84% 15.99% 12.26%
Net interest margin 4.35% 4.26% 4.10%
Efficiency ratio 59.44% 60.76% 66.05%
 

Jeffrey P. Finck
President & CEO
530.222.1460

Patrick
E. Phelan
Chief Financial Officer
530.222.1460