Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the fourth quarter and full year ended December 31, 2018.
The Company reported net income of $884,000 for the three months ended December 31, 2018 compared to net income of $184,000 for the same period last year. Diluted earnings per share were $0.57 for the three months ended December 31, 2018 compared to $0.13 for the same period last year.
The return on average assets for the three months ended December 31, 2018 was 1.36% and the return on average equity was 15.99%.
For the year ended December 31, 2018, the Company reported net income of $2,776,000 compared to net income of $1,638,000 for the same period last year. Diluted earnings per share were $1.84 for the year ended December 31, 2018 compared to $1.20 for the same period last year.
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The return on average assets for the year ended December 31, 2018 was 1.13% and the return on average equity was 13.51%.
President and CEO, Jeff Finck, stated, We are pleased with our 2018 results. The Company, once again, continues to show solid growth in loans, deposits and earnings. During 2018, our newly constructed Red Bluff building along the riverfront opened for business. In 2019, we look forward to moving down the street from our East Cypress Avenue location to our new building on Hartnell Avenue.
Net Interest Income
Net interest income increased to $2,599,000 for the quarter ended December 31, 2018 compared to $2,226,000 for the same quarter last year. For the year ended December 31, 2018, net interest income increased to $9,660,000 compared to $8,100,000 for the same period last year.
Provision for credit losses
The Company recorded a $130,000 provision for credit losses for the quarter ended December 31, 2018. There was no provision for credit losses recorded during the same period last year. For the year ended December 31, 2018, the Company recorded a $309,000 provision for credit losses compared to $215,000 for the same period last year.
Non-interest income for the quarter ended December 31, 2018 was $161,000 compared to $243,000 for the quarter ended December 31, 2017. For the year ended December 31, 2018, non-interest income was $695,000 compared to $1,223,000 for the same period last year.
Non-interest expense was $1,677,000 for the quarter ended December 31, 2018 compared to $1,477,000 for the same period last year. For the year ended December 31, 2018, non-interest expense was $6,459,000 compared to $5,645,000 for the same period last year.
Income tax expense was $69,000 for the quarter ended December 31, 2018 compared to $808,000 for the same period last year. For the year ended December 31, 2018, income tax expense was $811,000 compared to $1,825,000 for the same period last year. Fourth quarter 2017 income tax expense was impacted by a $400,000 net charge related to a revaluation of the net deferred tax asset associated with the passage of the Tax Cuts and Jobs Act. Fourth quarter and full year 2018 income tax expense was impacted by the reduction in the U.S. federal income tax rate from 34% to 21% and tax benefits from the exercise of stock options.
The Company had total assets at December 31, 2018 of $266.4 million compared to $229.0 million at December 31, 2017.
Total loans, net of unearned income at December 31, 2018 were $209.3 million compared to $184.8 million at December 31, 2017.
Total deposits were $232.3 million at December 31, 2018 compared to total deposits of $196.6 million at December 31, 2017.
The allowance for loan losses was $2,152,000, or 1.03% of loans, net of unearned income at December 31, 2018, compared to $1,847,000, or 1.00% of loans, net of unearned income at December 31, 2017. There were no nonperforming assets at December 31, 2018 and December 31, 2017.
At December 31, 2018, shareholders equity totaled $22.1 million compared to $17.7 million at December 31, 2017. Book value per share increased by 11.2% to $15.56 per share at December 31, 2018 compared to $13.99 per share at December 31, 2017. 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
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)|
|Cash and due from banks||$||7,002||$||5,275||$||4,139||$||3,364||$||4,630|
|Federal funds sold||20||20||20||20||20|
|Loans held for sale||–||–||–||1,849||–|
|Loans, net of unearned income||209,330||202,300||193,989||188,883||184,814|
|Allowance for loan losses||(2,152||)||(2,022||)||(1,947||)||(1,907||)||(1,847||)|
|Premises and equipment, net||8,740||7,777||6,958||5,846||5,121|
|Money market and savings||75,015||71,729||72,319||73,936||68,715|
|Time deposits of less than $100,000||15,778||16,456||19,482||17,959||18,510|
|Time deposits of $100,000 or more||52,763||48,155||45,671||45,933||44,731|
|Federal Home Loan Bank borrowings||6,000||6,000||6,000||9,000||9,000|
|Interest payable and other liabilities||1,100||1,161||1,021||933||821|
Accumulated other comprehensive income (loss)
|Total shareholders’ equity||22,065||21,738||21,047||18,289||17,711|
|Total liabilities and shareholders’ equity||$||266,361||$||253,514||$||244,753||$||240,682||$||229,039|
|Total equity / total assets||8.28||%||8.57||%||8.60||%||7.60||%||7.73||%|
|Book value per share||$||15.56||$||15.47||$||14.97||$||14.22||$||13.99|
|CORNERSTONE COMMUNITY BANCORP|
|CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)|
|(Dollars in Thousands)|
|Three months ended||Year ended|
|Federal funds sold||–||–||–||–||–|
|Total interest income||3,234||3,046||2,671||11,852||9,698|
|Money market and savings||177||165||120||614||415|
|Total interest expense||635||584||445||2,192||1,598|
|Net interest income||2,599||2,462||2,226||9,660||8,100|
|Provision for credit losses||130||75||–||309||215|
Net interest income after provision for credit losses
|Service charges on deposit accounts||59||57||47||223||181|
|Gain on sale of loans||–||57||102||74||662|
|Gain (loss) on sale of other real estate owned||–||–||–||–||–|
|Gain (loss) on sale of securities||–||–||–||–||–|
|Other non-interest income||102||101||94||398||380|
|Total non-interest income||161||215||243||695||1,223|
|Salaries and benefits||887||865||799||3,442||3,058|
|Premises and fixed assets||173||156||143||627||562|
|Total operating expenses||1,677||1,658||1,477||6,459||5,645|
|Income before income taxes||953||944||992||3,587||3,463|
|EARNINGS PER SHARE|
|Basic earnings per share||$||0.63||$||0.47||$||0.15||$||2.03||$||1.32|
|Diluted earnings per share||$||0.57||$||0.43||$||0.13||$||1.84||$||1.20|
|Average common shares outstanding||1,407,785||1,405,541||1,261,647||1,365,944||1,244,544|
Average common and equivalent shares outstanding
|Return on average assets||1.36||%||1.06||%||0.32||%||1.13||%||0.77||%|
|Return on average equity||15.99||%||12.37||%||4.11||%||13.51||%||9.63||%|
|Net interest margin||4.26||%||4.14||%||4.09||%||4.18||%||3.99||%|
Jeffrey P. Finck
President & CEO
Patrick E. Phelan
Chief Financial Officer