Cornerstone Community Bancorp Reports Financial Results For the Second Quarter Ended June 30, 2019

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the second quarter ended June 30, 2019.

The Company reported net income of $911,000 for the three months ended June 30, 2019 compared to net income of $664,000 for the same period last year. Diluted earnings per share were $0.60 for the three months ended June 30, 2019 compared to $0.44 for the same period last year.

The return on average assets for the three months ended June 30, 2019 was 1.34% and the return on average equity was 15.47%. The net interest margin expanded to 4.36% for the three months ended June 30, 2019 compared to 4.23% for the same period last year and the efficiency ratio declined to 56.05% for the three months ended June 30, 2019 compared to 61.13% for the same period last year.

For the six months ended June 30, 2019, the Company reported net income of $1,696,000 compared to net income of $1,226,000 for the same period last year. Diluted earnings per share were $1.12 for the six months ended June 30, 2019 compared to $0.83 for the same period last year.

The return on average assets for the six months ended June 30, 2019 was 1.26% and the return on average equity was 14.67%.

President and CEO, Jeff Finck, stated, “Our return on average assets, return on average equity and net interest margin all expanded for the quarter and six months ended June 30, 2019 compared to the same period last year. Our efficiency ratio also improved during those periods and was at 56% for the most recent quarter.”

Net Interest Income

Net interest income increased to $2,691,000 for the quarter ended June 30, 2019 compared to $2,371,000 for the same quarter last year. For the six months ended June 30, 2019, net interest income increased to $5,320,000 compared to $4,599,000 for the same period last year.

Provision for credit losses

The Company recorded a $110,000 provision for credit losses for the quarter ended June 30, 2019 compared to $40,000 for the same quarter last year. For the six months ended June 30, 2019, the Company recorded a $200,000 provision for credit losses compared to $104,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended June 30, 2019 was $476,000 compared to $158,000 for the quarter ended June 30, 2018. For the six months ended June 30, 2019, non-interest income was $801,000 compared to $319,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,775,000 for the quarter ended June 30, 2019 compared to $1,546,000 for the same period last year. For the six months ended June 30, 2019, non-interest expense was $3,531,000 compared to $3,124,000 for the same period last year.

Balance Sheet

The Company had total assets at June 30, 2019 of $289.3 million compared to $244.8 million at June 30, 2018.

Total loans, net of unearned income at June 30, 2019 were $222.2 million compared to $194.0 million at June 30, 2018.

Total deposits were $256.2 million at June 30, 2019 compared to total deposits of $211.8 million at June 30, 2018.

Credit Quality

The allowance for loan losses was $2,345,000, or 1.06% of loans, net of unearned income at June 30, 2019, compared to $1,947,000, or 1.00% of loans, net of unearned income at June 30, 2018. There were $99,000 in nonperforming assets at June 30, 2019 and no nonperforming assets at June 30, 2018.

Capital

At June 30, 2019, shareholders’ equity totaled $24.0 million compared to $21.0 million at June 30, 2018. Book value per share was $16.71 per share at June 30, 2019 compared to $14.97 per share at June 30, 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 Bancorp’s 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)
	06/30/19			03/31/19			12/31/18			09/30/18			06/30/18
ASSETS
Cash and due from banks	$	11,122		$	5,744		$	7,002		$	5,275		$	4,139
Federal funds sold		13,520			8,836			20			20			20
Interest-bearing deposits		8,166			11,186			24,730			23,686			24,066
Investment securities		7,010			7,720			9,284			9,548			10,651
Loans held for sale		-			-			-			-			-
Loans, net of unearned income		222,199			214,476			209,330			202,300			193,989
Allowance for loan losses		(2,345	)		(2,235	)		(2,152	)		(2,022	)		(1,947	)
Loans, net		219,854			212,241			207,178			200,278			192,042
Premises and equipment, net		11,316			10,154			8,740			7,777			6,958
Other assets		18,359			10,151			9,407			6,930			6,877
Total assets	$	289,347		$	266,032		$	266,361		$	253,514		$	244,753
LIABILITIES
Deposits:
Demand noninterest-bearing	$	54,439		$	50,564		$	50,862		$	49,063		$	44,751
Demand interest-bearing		48,839			38,434			37,875			34,312			29,565
Money market and savings		79,614			74,628			75,015			71,729			72,319
Time deposits of less than $100,000		19,331			15,099			15,778			16,456			19,482
Time deposits of $100,000 or more		53,940			52,250			52,763			48,155			45,671
Total deposits		256,163			230,975			232,293			219,715			211,788
Federal Home Loan Bank borrowings		3,000			6,000			6,000			6,000			6,000
Subordinated debentures		4,908			4,906			4,903			4,900			4,897
Interest payable and other liabilities		1,325			1,190			1,100			1,161			1,021
Total liabilities		265,396			243,071			244,296			231,776			223,706
SHAREHOLDERS' EQUITY
Common stock		15,122			15,088			15,001			15,584			15,551
Retained Earnings		8,753			7,842			7,058			6,173			5,507
Accumulated other comprehensive income (loss)		76			31			6			(19	)		(11	)
Total shareholders' equity		23,951			22,961			22,065			21,738			21,047
Total liabilities and shareholders' equity	$	289,347		$	266,032		$	266,361		$	253,514		$	244,753
Total equity / total assets		8.28	%		8.63	%		8.28	%		8.57	%		8.60	%
Book value per share	$	16.71		$	16.02		$	15.56		$	15.47		$	14.97

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
	Three months ended										Six months ended
	06/30/19			03/31/19			06/30/18				06/30/19			06/30/18
INTEREST INCOME
Loans	$	3,210		$	3,130		$	2,673			$	6,340		$	5,204
Federal funds sold		60			14			-				74			-
Investment securities		55			63			78				118			156
Other		80			121			124				201			212
Total interest income		3,405			3,328			2,875				6,733			5,572
INTEREST EXPENSE
Deposits:
Interest-bearing demand		27			22			13				49			27
Money market and savings		206			216			145				422			272
Time deposits		373			344			227				717			430
Other		108			117			119				225			244
Total interest expense		714			699			504				1,413			973
Net interest income		2,691			2,629			2,371				5,320			4,599
Provision for credit losses		110			90			40				200			104
Net interest income after provision for credit losses		2,581			2,539			2,331				5,120			4,495
NON-INTEREST INCOME
Service charges on deposit accounts		85			45			58				130			107
Gain on sale of loans		268			149			-				417			17
Gain (loss) on sale of other real estate owned		-			-			-				-			-
Gain (loss) on sale of securities		-			-			-				-			-
Other non-interest income		123			131			100				254			195
Total non-interest income		476			325			158				801			319
OPERATING EXPENSES
Salaries and benefits		908			934			814				1,842			1,690
Premises and fixed assets		210			182			148				392			298
Other		657			640			584				1,297			1,136
Total operating expenses		1,775			1,756			1,546				3,531			3,124
Income before income taxes		1,282			1,108			943				2,390			1,690
Income taxes		371			323			279				694			464
NET INCOME	$	911		$	785		$	664			$	1,696		$	1,226
EARNINGS PER SHARE
Basic earnings per share	$	0.64		$	0.55		$	0.48			$	1.18		$	0.93
Diluted earnings per share	$	0.60		$	0.52		$	0.44			$	1.12		$	0.83
Average common shares outstanding		1,433,041			1,432,208			1,371,656				1,432,627			1,324,551
Average common and equivalent shares outstanding		1,519,821			1,516,515			1,515,943				1,518,216			1,470,417
PERFORMANCE MEASURES
Return on average assets		1.34	%		1.18	%		1.11	%			1.26	%		1.04	%
Return on average equity		15.47	%		13.84	%		13.13	%			14.67	%		12.71	%
Net interest margin		4.36	%		4.35	%		4.23	%			4.35	%		4.17	%
Efficiency ratio		56.05	%		59.44	%		61.13	%			57.69	%		63.52	%

 

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