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Cornerstone Community Bancorp Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2020

RED BLUFF, Calif.–(BUSINESS WIRE)–Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the fourth quarter ended December 31, 2020.

The Company reported net income of $2,059,000 for the three months ended December 31, 2020 compared to net income of $884,000 for the same period last year. Diluted earnings per share were $1.36 for the three months ended December 31, 2020 compared to $0.58 for the same period last year.

The return on average assets for the three months ended December 31, 2020 was 1.68% and the return on average equity was 27.70%. The tax-equivalent net interest margin was 3.81% for the three months ended December 31, 2020 compared to 4.03% for the same period last year and the efficiency ratio declined to 39.69% for the three months ended December 31, 2020 compared to 58.78% for the same period last year.

For the year ended December 31, 2020, the Company reported net income of $4,626,000 compared to net income of $3,452,000 for the same period last year. Diluted earnings per share were $3.04 for the year ended December 31, 2020 compared to $2.27 for the same period last year.

The return on average assets for the year ended December 31, 2020 was 1.09% and the return on average equity was 16.53%.

Net income for the year ended December 31, 2020 reflects a $1.6 million provision for credit losses related to the economic uncertainties of the COVID-19 pandemic.

President and CEO, Jeff Finck stated, “We had a record quarter and year. During the year, our team was busy helping both new and existing customers through the Paycheck Protection Program (PPP) application process. During the fourth quarter, the team was helping them navigate the forgiveness process. These efforts served to strengthen relationships with existing customers and attract new ones.”

Net Interest Income

Net interest income increased to $4,465,000 for the quarter ended December 31, 2020 compared to $2,834,000 for the same quarter last year. Fourth quarter 2020 net interest income was driven by accelerated PPP fee recognition from borrower forgiveness processing. For the year ended December 31, 2020, net interest income increased to $13,836,000 compared to $10,971,000 for the same period last year.

The Company’s tax-equivalent net interest margin was 3.81% for the fourth quarter of 2020 and 3.45% for the year ended December 31, 2020.

Provision for credit losses

There was no provision for credit losses recorded for the quarter ended December 31, 2020 compared to $100,000 for the same quarter last year. For the year ended December 31, 2020, the Company recorded a $1,600,000 provision for credit losses compared to $340,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended December 31, 2020 was $345,000 compared to $201,000 for the quarter ended December 31, 2019. For the year ended December 31, 2020, non-interest income was $1,239,000 compared to $1,206,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,909,000 for the quarter ended December 31, 2020 compared to $1,784,000 for the same period last year. For the year ended December 31, 2020, non-interest expense was $7,156,000 compared to $7,071,000 for the same period last year.

Balance Sheet

Interest-bearing deposits increased $74.2 million at December 31, 2020 compared to December 31, 2019. Investment securities increased $37.0 million at December 31, 2020 compared to December 31, 2019.

Total loans, net of unearned income at December 31, 2020 were $332.2 million compared to $241.7 million at December 31, 2019.

Total deposits were $433.3 million at December 31, 2020 compared to total deposits of $253.4 million at December 31, 2019.

Credit Quality

The allowance for loan losses was $4,009,000, or 1.21% of loans, net of unearned income at December 31, 2020, compared to $2,409,000, or 1.00% of loans, net of unearned income at December 31, 2019. There were no nonperforming assets at December 31, 2020 and December 31, 2019.

Capital

At December 31, 2020, shareholders’ equity totaled $30.1 million compared to $25.8 million at December 31, 2019. Book value was $20.87 per share at December 31, 2020 compared to $17.79 per share at December 31, 2019.

During the fourth quarter of 2020, the Company repurchased 49,800 shares of its common stock for a total of $900,368.

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 2020), 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 BANCORP
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
 
 
12/31/2009/30/2006/30/2003/31/2012/31/19
 
ASSETS
Cash and due from banks

$

3,811

 

$

5,455

 

$

6,350

 

$

4,965

 

$

6,038

 

Federal funds sold

 

14,166

 

 

5,045

 

 

10,402

 

 

17,385

 

 

4,575

 

Interest-bearing deposits

 

77,045

 

 

62,110

 

 

73,310

 

 

18,928

 

 

2,825

 

Investment securities

 

50,336

 

 

50,699

 

 

16,173

 

 

13,144

 

 

13,355

 

Loans held for sale

 

 

 

 

 

 

 

 

 

 

Loans, net of unearned income

 

332,176

 

 

342,416

 

 

333,620

 

 

250,353

 

 

241,662

 

Allowance for loan losses

 

(4,009

)

 

(4,009

)

 

(4,009

)

 

(3,859

)

 

(2,409

)

Loans, net

 

328,167

 

 

338,407

 

 

329,611

 

 

246,494

 

 

239,253

 

Premises and equipment, net

 

11,581

 

 

10,992

 

 

11,095

 

 

11,180

 

 

11,216

 

Other assets

 

12,255

 

 

12,577

 

 

11,882

 

 

11,330

 

 

11,093

 

Total assets

$

497,361

 

$

485,285

 

$

458,823

 

$

323,426

 

$

288,355

 

 
LIABILITIES
Deposits:
Demand noninterest-bearing

$

108,147

 

$

103,824

 

$

96,395

 

$

58,357

 

$

52,352

 

Demand interest-bearing

 

108,097

 

 

104,819

 

 

90,633

 

 

51,608

 

 

52,058

 

Money market and savings

 

146,655

 

 

87,035

 

 

79,550

 

 

77,273

 

 

74,560

 

Time deposits of less than $100,000

 

15,418

 

 

21,103

 

 

22,925

 

 

26,503

 

 

18,395

 

Time deposits of $100,000 or more

 

55,021

 

 

54,695

 

 

51,919

 

 

54,274

 

 

56,016

 

Total deposits

 

433,338

 

 

371,476

 

 

341,422

 

 

268,015

 

 

253,381

 

Borrowings and other obligations

 

15,000

 

 

78,136

 

 

83,136

 

 

23,000

 

 

3,000

 

Subordinated debentures

 

16,645

 

 

4,923

 

 

4,920

 

 

4,917

 

 

4,914

 

Interest payable and other liabilities

 

2,294

 

 

1,854

 

 

1,765

 

 

1,382

 

 

1,235

 

Total liabilities

 

467,277

 

 

456,389

 

 

431,243

 

 

297,314

 

 

262,530

 

 
SHAREHOLDERS’ EQUITY
Common stock

 

14,584

 

 

15,462

 

 

15,440

 

 

15,336

 

 

15,264

 

Retained Earnings

 

15,136

 

 

13,077

 

 

11,841

 

 

10,557

 

 

10,510

 

Accumulated other comprehensive income (loss)

 

364

 

 

357

 

 

299

 

 

219

 

 

51

 

Total shareholders’ equity

 

30,084

 

 

28,896

 

 

27,580

 

 

26,112

 

 

25,825

 

Total liabilities and shareholders’ equity

$

497,361

 

$

485,285

 

$

458,823

 

$

323,426

 

$

288,355

 

 
Total equity / total assets

 

6.05

%

 

5.95

%

 

6.01

%

 

8.07

%

 

8.96

%

Book value per share

$

20.87

 

$

19.38

 

$

18.50

 

$

17.63

 

$

17.79

 

Shares outstanding

 

1,441,241

 

 

1,491,041

 

 

1,491,041

 

 

1,481,041

 

 

1,452,041

 

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
 
 
Three months endedYear ended
12/31/2009/30/2012/31/1912/31/2012/31/19
 
INTEREST INCOME
Loans

$

4,761

 

$

3,695

 

$

3,349

 

$

15,424

 

$

13,065

 

Federal funds sold

 

2

 

 

1

 

 

40

 

 

24

 

 

175

 

Investment securities

 

162

 

 

161

 

 

65

 

 

495

 

 

238

 

Other

 

51

 

 

33

 

 

130

 

 

174

 

 

444

 

Total interest income

 

4,976

 

 

3,890

 

 

3,584

 

 

16,117

 

 

13,922

 

 
INTEREST EXPENSE
Deposits:
Interest-bearing demand

 

55

 

 

51

 

 

50

 

 

181

 

 

139

 

Money market and savings

 

80

 

 

79

 

 

241

 

 

464

 

 

906

 

Time deposits

 

155

 

 

198

 

 

351

 

 

944

 

 

1,465

 

Other

 

221

 

 

186

 

 

108

 

 

692

 

 

441

 

Total interest expense

 

511

 

 

514

 

 

750

 

 

2,281

 

 

2,951

 

 
Net interest income

 

4,465

 

 

3,376

 

 

2,834

 

 

13,836

 

 

10,971

 

Provision for credit losses

 

 

 

 

 

100

 

 

1,600

 

 

340

 

Net interest income after provision
for credit losses

 

4,465

 

 

3,376

 

 

2,734

 

 

12,236

 

 

10,631

 

 
NON-INTEREST INCOME
Service charges on deposit accounts

 

55

 

 

49

 

 

61

 

 

222

 

 

255

 

Gain on sale of loans

 

61

 

 

 

 

 

 

247

 

 

417

 

Gain (loss) on sale of other real estate owned

 

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of securities

 

 

 

91

 

 

 

 

91

 

 

 

Other non-interest income

 

229

 

 

156

 

 

140

 

 

679

 

 

534

 

Total non-interest income

 

345

 

 

296

 

 

201

 

 

1,239

 

 

1,206

 

 
OPERATING EXPENSES
Salaries and benefits

 

970

 

 

979

 

 

887

 

 

3,280

 

 

3,636

 

Premises and fixed assets

 

182

 

 

200

 

 

239

 

 

891

 

 

859

 

Other

 

757

 

 

760

 

 

658

 

 

2,985

 

 

2,576

 

Total operating expenses

 

1,909

 

 

1,939

 

 

1,784

 

 

7,156

 

 

7,071

 

 
Income before income taxes

 

2,901

 

 

1,733

 

 

1,151

 

 

6,319

 

 

4,766

 

Income taxes

 

842

 

 

497

 

 

267

 

 

1,693

 

 

1,314

 

 
NET INCOME

$

2,059

 

$

1,236

 

$

884

 

$

4,626

 

$

3,452

 

 
EARNINGS PER SHARE
Basic earnings per share

$

1.39

 

$

0.83

 

$

0.61

 

$

3.12

 

$

2.41

 

Diluted earnings per share

$

1.36

 

$

0.81

 

$

0.58

 

$

3.04

 

$

2.27

 

Average common shares outstanding

 

1,477,361

 

 

1,491,041

 

 

1,442,639

 

 

1,483,575

 

 

1,435,255

 

Average common and equivalent
shares outstanding

 

1,511,365

 

 

1,522,872

 

 

1,527,238

 

 

1,522,714

 

 

1,521,093

 

 
PERFORMANCE MEASURES
Return on average assets

 

1.68

%

 

1.05

%

 

1.16

%

 

1.09

%

 

1.22

%

Return on average equity

 

27.70

%

 

17.36

%

 

13.87

%

 

16.53

%

 

14.33

%

Tax-equivalent net interest margin

 

3.81

%

 

2.99

%

 

4.03

%

 

3.45

%

 

4.21

%

Efficiency ratio

 

39.69

%

 

52.81

%

 

58.78

%

 

47.47

%

 

58.07

%

 

Contacts

Jeffrey P. Finck

President & CEO

530.222.1460

Patrick E. Phelan

Chief Financial Officer

530.222.1460

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