Cornerstone Community Bancorp Reports Financial Results for the Third Quarter Ended September 30, 2018

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the third quarter ended September 30, 2018.

The Company reported net income of $666,000 for the three months ended September 30, 2018 compared to net income of $556,000 for the same period last year. Diluted earnings per share were $0.43 for the three months ended September 30, 2018 compared to $0.41 for the same period last year.

The return on average assets for the three months ended September 30, 2018 was 1.06% and the return on average equity was 12.37%.

For the nine months ended September 30, 2018, the Company reported net income of $1,892,000 compared to net income of $1,454,000 for the same period last year. Diluted earnings per share were $1.26 for the nine months ended September 30, 2018 compared to $1.07 for the same period last year.

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The return on average assets for the nine months ended September 30, 2018 was 1.05% and the return on average equity was 12.59%.

President and CEO, Jeff Finck, stated, The Company continues to show solid growth in loans, deposits and earnings. Last week, our newly constructed Red Bluff building along the riverfront opened for business. We invite all of our customers to stop by and take a look.

Net Interest Income

Net interest income increased to $2,462,000 for the quarter ended September 30, 2018 compared to $2,106,000 for the same quarter last year. For the nine months ended September 30, 2018, net interest income increased to $7,061,000 compared to $5,874,000 for the same period last year.

Provision for credit losses

The Company recorded a $75,000 provision for credit losses for the quarter ended September 30, 2018 compared to $65,000 for the same period last year. For the nine months ended September 30, 2018, the Company recorded a $179,000 provision for credit losses compared to $215,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended September 30, 2018 was $215,000 compared to $389,000 for the quarter ended September 30, 2017. For the nine months ended September 30, 2018, non-interest income was $534,000 compared to $980,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,658,000 for the quarter ended September 30, 2018 compared to $1,485,000 for the same period last year. For the nine months ended September 30, 2018, non-interest expense was $4,782,000 compared to $4,168,000 for the same period last year.

Balance Sheet

The Company had total assets at September 30, 2018 of $253.5 million compared to $223.6 million at September 30, 2017.

Total loans, net of unearned income at September 30, 2018 were $202.3 million compared to $173.5 million at September 30, 2017.

Total deposits were $219.7 million at September 30, 2018 compared to total deposits of $191.3 million at September 30, 2017.

Credit Quality

The allowance for loan losses was $2,022,000, or 1.00% of loans, net of unearned income at September 30, 2018, compared to $1,847,000, or 1.06% of loans, net of unearned income at September 30, 2017. There were no nonperforming assets at September 30, 2018 compared to $3,000 at September 30, 2017.

Capital

At September 30, 2018, shareholders equity totaled $21.7 million compared to $17.5 million at September 30, 2017. Book value per share increased by 11.3% to $15.47 per share at September 30, 2018 compared to $13.90 per share at September 30, 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

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)
 
  09/30/18   06/30/18   03/31/18   12/31/17   09/30/17
       
ASSETS
Cash and due from banks $ 5,275 $ 4,139 $ 3,364 $ 4,630 $ 4,465
Federal funds sold 20 20 20 20 20
Interest-bearing deposits 23,686 24,066 24,932 17,077 24,930
Investment securities 9,548 10,651 10,942 12,274 12,486
Loans held for sale 1,849
Loans, net of unearned income 202,300 193,989 188,883 184,814 173,452
Allowance for loan losses   (2,022 )     (1,947 )     (1,907 )     (1,847 )     (1,847 )
Loans, net 200,278 192,042 186,976 182,967 171,605
Premises and equipment, net 7,777 6,958 5,846 5,121 3,102
Other assets   6,930       6,877       6,753       6,950       7,001  
Total assets $ 253,514     $ 244,753     $ 240,682     $ 229,039     $ 223,609  
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 49,063 $ 44,751 $ 42,223 $ 38,348 $ 37,977
Demand interest-bearing 34,312 29,565 27,514 26,311 25,434
Money market and savings 71,729 72,319 73,936 68,715 65,909
Time deposits of less than $100,000 16,456 19,482 17,959 18,510 18,333
Time deposits of $100,000 or more   48,155       45,671       45,933       44,731       43,658  
Total deposits 219,715 211,788 207,565 196,615 191,311
Federal Home Loan Bank borrowings 6,000 6,000 9,000 9,000 9,000
Subordinated debentures 4,900 4,897 4,895 4,892 4,890
Interest payable and other liabilities   1,161       1,021       933       821       955  
Total liabilities   231,776       223,706       222,393       211,328       206,156  
 
SHAREHOLDERS’ EQUITY
Common stock 15,584 15,551 13,429 13,333 13,258
Retained Earnings 6,173 5,507 4,843 4,282 4,113
Accumulated other comprehensive income (loss)   (19 )     (11 )     17       96       82  
Total shareholders’ equity   21,738       21,047       18,289       17,711       17,453  
Total liabilities and shareholders’ equity $ 253,514     $ 244,753     $ 240,682     $ 229,039     $ 223,609  
 
Total equity / total assets 8.57 % 8.60 % 7.60 % 7.73 % 7.81 %
Book value per share $ 15.47 $ 14.97 $ 14.22 $ 13.99 $ 13.90
 
 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
 
  Three months ended     Nine months ended
09/30/18   06/30/18   09/30/17 09/30/18   09/30/17
     
INTEREST INCOME
Loans $ 2,818 $ 2,673 $ 2,365 $ 8,022 $ 6,573
Federal funds sold
Investment securities 73 78 76 229 235
Other   155       124       78     367       219  
Total interest income   3,046       2,875       2,519     8,618       7,027  
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 21 13 13 48 34
Money market and savings 165 145 106 437 295
Time deposits 279 227 166 709 438
Other   119       119       128     363       386  
Total interest expense   584       504       413     1,557       1,153  
 
Net interest income 2,462 2,371 2,106 7,061 5,874
Provision for credit losses   75       40       65     179       215  

Net interest income after provision for credit losses

  2,387       2,331       2,041     6,882       5,659  
 
NON-INTEREST INCOME
Service charges on deposit accounts 57 58 44 164 134
Gain on sale of loans 57 239 74 560
Gain (loss) on sale of other real estate owned
Gain (loss) on sale of securities
Other non-interest income   101       100       106     296       286  
Total non-interest income   215       158       389     534       980  
 
OPERATING EXPENSES
Salaries and benefits 865 814 790 2,555 2,259
Premises and fixed assets 156 148 141 454 419
Other   637     584     554     1,773       1,490  
Total operating expenses   1,658     1,546     1,485     4,782       4,168  
 
Income before income taxes 944 943 945 2,634 2,471
Income taxes 278 279 389 742 1,017
               
NET INCOME $ 666     $ 664     $ 556   $ 1,892     $ 1,454  
 
EARNINGS PER SHARE
Basic earnings per share $ 0.47     $ 0.48     $ 0.45   $ 1.40     $ 1.17  
Diluted earnings per share $ 0.43     $ 0.44     $ 0.41   $ 1.26     $ 1.07  
Average common shares outstanding   1,405,541       1,371,656       1,243,006     1,351,844       1,238,780  

Average common and equivalent shares outstanding

  1,551,475       1,515,943       1,367,810     1,497,759       1,356,082  
 
PERFORMANCE MEASURES
Return on average assets 1.06 % 1.11 % 1.02 % 1.05 % 0.93 %
Return on average equity 12.37 % 13.13 % 12.80 % 12.59 % 11.60 %
Net interest margin 4.14 % 4.23 % 4.03 % 4.16 % 3.95 %
Efficiency ratio 61.94 % 61.13 % 59.52 % 62.96 % 60.81 %
 

Cornerstone Community Bancorp
Jeffrey P. Finck, 530-222-1460
President
& CEO
or
Patrick E. Phelan, 530-222-1460
Chief
Financial Officer

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