Cornerstone Community Bancorp Reports Financial Results for the First Quarter Ended March 31, 2022

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the first quarter ended March 31, 2022.

The Company reported net income of $1,675,000 for the three months ended March 31, 2022 compared to net income of $2,046,000 for the same period last year. Diluted earnings per share were $1.09 for the three months ended March 31, 2022 compared to $1.38 for the same period last year. First quarter 2022 results were impacted by the decline in PPP (Paycheck Protection Program) fees and related interest income due to loan forgiveness.

The return on average assets for the three months ended March 31, 2022 was 1.15% and the return on average equity was 18.22%. The tax-equivalent net interest margin was 3.17% for the three months ended March 31, 2022 compared to 3.43% for the same period last year and the efficiency ratio was 48.61% for the three months ended March 31, 2022 compared to 35.61% for the same period last year.

President and CEO, Jeff Finck stated, “Even with the decline in PPP income, we were able to generate strong returns on average assets and average equity during the first quarter. Also during the first quarter, we opened our Anderson branch and we look forward to building relationships with the small businesses and individuals in that community in 2022.”

Net Interest Income

Net interest income increased to $4,350,000 for the quarter ended March 31, 2022 compared to $4,217,000 for the same quarter last year.

Provision for credit losses

Provision for credit losses were $18,000 for the quarter ended March 31, 2022 compared to $400,000 for the same quarter last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2022 was $264,000 compared to $877,000 for the quarter ended March 31, 2021.

Non-Interest Expense

Non-interest expense was $2,243,000 for the quarter ended March 31, 2022 compared to $1,814,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at March 31, 2022 were $375.4 million compared to $382.3 million at March 31, 2021.

Total deposits were $532.3 million at March 31, 2022 compared to total deposits of $485.3 million at March 31, 2021.

Credit Quality

The allowance for loan losses was $5,077,000, or 1.35% of loans, net of unearned income, at March 31, 2022, compared to $4,409,000, or 1.15% of loans, net of unearned income, at March 31, 2021. There were no nonperforming assets at March 31, 2022 and March 31, 2021.

Capital

At March 31, 2022, shareholders’ equity totaled $33.7 million compared to $31.4 million at March 31, 2021. At March 31, 2022, the Company's book value per common share was $22.93 compared to $25.31 at December 31, 2021 and $21.65 at March 31, 2021. During the first quarter of 2022, increasing interest rates resulted in a decline in the fair value of available for sale investment securities. This impact is reflected in the decline in accumulated other comprehensive income (AOCI) to ($5,995,000), compared to ($945,000) at December 31, 2021 and ($441,000) at March 31, 2021. Excluding AOCI, book value increased to $27.00 at March 31, 2022, compared to $25.96 at December 31, 2021 and $21.96 at March 31, 2021.

AOCI has no effect on Cornerstone Community Bank’s (the Bank) regulatory capital ratios as the Bank opted to exclude it from regulatory capital calculations. At March 31, 2022, the Bank’s total risk-based capital ratio was 13.25% and its tier 1 capital to risk weighted assets ratio was 12.00%. The Bank remains well capitalized under the regulatory framework for prompt corrective action.

About Cornerstone Community Bancorp

Cornerstone Community Bancorp, a bank holding company headquartered in Red Bluff, California, serves the Red Bluff, Redding and Anderson communities through its wholly-owned subsidiary, Cornerstone Community Bank with a headquarters office in Red Bluff, two banking offices in Redding and one in Anderson. 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 Coronavirus Aid, Relief and Economic Security Act of 2022), 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)
 
03/31/22 12/31/21 09/30/21 06/30/21 03/31/21
 
ASSETS
Cash and due from banks

$

4,175

 

$

4,552

 

$

4,765

 

$

5,450

 

$

5,417

 

Federal funds sold

 

121

 

 

121

 

 

2,600

 

 

2,256

 

 

5,761

 

Interest-bearing deposits

 

73,629

 

 

77,933

 

 

24,636

 

 

28,549

 

 

68,283

 

Investment securities

 

99,748

 

 

108,253

 

 

110,470

 

 

75,258

 

 

52,084

 

Loans held for sale

 

-

 

 

-

 

 

-

 

 

-

 

 

1,102

 

Loans, net of unearned income

 

375,369

 

 

387,374

 

 

388,532

 

 

390,748

 

 

382,253

 

Allowance for loan losses

 

(5,077

)

 

(5,059

)

 

(4,909

)

 

(4,509

)

 

(4,409

)

Loans, net

 

370,292

 

 

382,315

 

 

383,623

 

 

386,239

 

 

377,844

 

Premises and equipment, net

 

14,757

 

 

14,784

 

 

13,567

 

 

13,013

 

 

12,767

 

Other assets

 

16,930

 

 

15,622

 

 

14,863

 

 

14,972

 

 

13,974

 

Total assets

$

579,652

 

$

603,580

 

$

554,524

 

$

525,737

 

$

537,232

 

 
LIABILITIES
Deposits:
Demand noninterest-bearing

$

131,136

 

$

174,282

 

$

141,734

 

$

126,107

 

$

126,481

 

Demand interest-bearing

 

126,331

 

 

131,368

 

 

131,964

 

 

126,724

 

 

122,506

 

Money market and savings

 

196,653

 

 

163,946

 

 

150,149

 

 

150,086

 

 

163,232

 

Time deposits

 

78,167

 

 

78,111

 

 

76,291

 

 

70,386

 

 

73,111

 

Total deposits

 

532,287

 

 

547,707

 

 

500,138

 

 

473,303

 

 

485,330

 

Borrowings and other obligations

 

-

 

 

5,000

 

 

5,000

 

 

5,000

 

 

5,000

 

Subordinated debentures

 

11,726

 

 

11,720

 

 

11,715

 

 

11,709

 

 

11,703

 

Interest payable and other liabilities

 

1,899

 

 

2,134

 

 

2,151

 

 

1,933

 

 

3,776

 

Total liabilities

 

545,912

 

 

566,561

 

 

519,004

 

 

491,945

 

 

505,809

 

 
SHAREHOLDERS' EQUITY
Common stock

 

15,009

 

 

14,913

 

 

14,814

 

 

14,771

 

 

14,681

 

Retained Earnings

 

24,726

 

 

23,051

 

 

21,084

 

 

18,999

 

 

17,183

 

Accumulated other comprehensive income (loss)

 

(5,995

)

 

(945

)

 

(378

)

 

22

 

 

(441

)

Total shareholders' equity

 

33,740

 

 

37,019

 

 

35,520

 

 

33,792

 

 

31,423

 

Total liabilities and shareholders' equity

$

579,652

 

$

603,580

 

$

554,524

 

$

525,737

 

$

537,232

 

 
Total equity / total assets

 

5.82

%

 

6.13

%

 

6.41

%

 

6.43

%

 

5.85

%

Book value per share

$

22.93

 

$

25.31

 

$

24.37

 

$

23.22

 

$

21.65

 

Shares outstanding

 

1,471,591

 

 

1,462,591

 

 

1,457,591

 

 

1,455,091

 

 

1,451,091

 

 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
 
 
 
 
Three months ended
03/31/22 12/31/21 03/31/21
 
INTEREST INCOME
Loans

$

4,348

 

$

4,759

 

$

4,451

 

Federal funds sold

 

-

 

 

1

 

 

2

 

Investment securities

 

371

 

 

385

 

 

162

 

Other

 

58

 

 

60

 

 

32

 

Total interest income

 

4,777

 

 

5,205

 

 

4,647

 

 
INTEREST EXPENSE
Deposits:
Interest-bearing demand

 

46

 

 

49

 

 

47

 

Money market and savings

 

117

 

 

109

 

 

87

 

Time deposits

 

107

 

 

107

 

 

124

 

Other

 

157

 

 

159

 

 

172

 

Total interest expense

 

427

 

 

424

 

 

430

 

 
Net interest income

 

4,350

 

 

4,781

 

 

4,217

 

Provision for credit losses

 

18

 

 

150

 

 

400

 

Net interest income after provision for credit losses

 

4,332

 

 

4,631

 

 

3,817

 

 
NON-INTEREST INCOME
Service charges on deposit accounts

 

71

 

 

65

 

 

58

 

Gain on sale of loans

 

-

 

 

-

 

 

700

 

Gain (loss) on sale of other real estate owned

 

-

 

 

-

 

 

-

 

Gain (loss) on sale of securities

 

-

 

 

-

 

 

(45

)

Other non-interest income

 

193

 

 

274

 

 

164

 

Total non-interest income

 

264

 

 

339

 

 

877

 

 
OPERATING EXPENSES
Salaries and benefits

 

1,146

 

 

1,175

 

 

679

 

Premises and fixed assets

 

191

 

 

166

 

 

179

 

Other

 

906

 

 

868

 

 

956

 

Total operating expenses

 

2,243

 

 

2,209

 

 

1,814

 

 
Income before income taxes

 

2,353

 

 

2,761

 

 

2,880

 

Income taxes

 

678

 

 

794

 

 

834

 

 
NET INCOME

$

1,675

 

$

1,967

 

$

2,046

 

 
EARNINGS PER SHARE
Basic earnings per share

$

1.14

 

$

1.35

 

$

1.41

 

Diluted earnings per share

$

1.09

 

$

1.29

 

$

1.38

 

Average common shares outstanding

 

1,469,258

 

 

1,459,667

 

 

1,447,763

 

Average common and equivalent shares outstanding

 

1,532,163

 

 

1,518,908

 

 

1,485,953

 

 
PERFORMANCE MEASURES
Return on average assets

 

1.15

%

 

1.41

%

 

1.56

%

Return on average equity

 

18.22

%

 

21.63

%

 

26.41

%

Tax-equivalent net interest margin

 

3.17

%

 

3.59

%

 

3.43

%

Efficiency ratio

 

48.61

%

 

43.14

%

 

35.61

%

 

Contacts

Jeffrey P. Finck

President & CEO

530.222.1460

Patrick E. Phelan

Chief Financial Officer

530.222.1460

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