Cornerstone Community Bancorp Reports Financial Results for the First Quarter Ended March 31, 2015

RED BLUFF, Calif.--()--Cornerstone Community Bancorp (OTCQB:CRSB) announced today its financial results for the first quarter ended March 31, 2015.

“Loan growth continues to drive the Company forward. The 23% growth in loans led to the Company’s 73% increase in net income for the first quarter.”

The Company reported net income of $226,000 for the three months ended March 31, 2015 compared to net income of $131,000 for the same period last year, an increase of $95,000, or 73%. Diluted earnings per share for the three months ended March 31, 2015 were $0.17 compared to $0.10 for the same period last year, an increase of $0.07, or 70%.

The return on average assets for the three months ended March 31, 2015 was 0.58% compared to 0.41% for the three months ended March 31, 2014. The return on average equity was 6.49% for the three months ended March 31, 2015 compared to 4.11% for the same period last year.

President and CEO Jeff Finck commented, “Loan growth continues to drive the Company forward. The 23% growth in loans led to the Company’s 73% increase in net income for the first quarter.”

Net Interest Income

Net interest income was $1,513,000 for the quarter ended March 31, 2015 representing an increase of $194,000, or 15%, from $1,319,000 for the same period one year earlier. The net interest margin decreased to 4.11% during the quarter ended March 31, 2015 compared to 4.42% during the same period last year.

Provision for credit losses

There was no provision for credit losses recorded for the quarter ended March 31, 2015 compared to $24,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2015 was $178,000 compared to $110,000 for the quarter ended March 31, 2014.

Non-Interest Expense

Non-interest expense was $1,307,000 for the quarter ended March 31, 2015 compared to $1,192,000 for the same period one year earlier.

Balance Sheet

The Company had total assets at March 31, 2015 of $167.2 million, compared to $126.8 million at March 31, 2014, representing growth of $40.4 million, or 32%.

Total loans outstanding at March 31, 2015 were $127.0 million compared to $103.1 million at March 31, 2014, representing an increase of $23.9 million, or 23%.

Total deposits were $147.7 million at March 31, 2015 compared to total deposits of $111.6 million at March 31, 2014, representing an increase of $36.1 million, or 32%.

Credit Quality

The allowance for loan losses was $1,608,000, or 1.27% of loans, net of unearned income at March 31, 2015, compared to $1,415,000, or 1.42% of loans, net of unearned income at March 31, 2014. Nonperforming assets at March 31, 2015 were $423,000 compared to $202,000 at March 31, 2014. The bank recognized $3,000 in net loan recoveries during the quarter ended March 31, 2015.

Capital

At March 31, 2015, shareholders’ equity totaled $14.0 million compared to $12.8 million at March 31, 2014, an increase of $1.2 million, or 9.4%.

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 a banking office 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)
         
 
 
03/31/15   12/31/14   09/30/14   06/30/14   03/31/14
 
ASSETS
Cash and due from banks $ 3,982 $ 2,750 $ 2,657 $ 4,268 $ 3,203
Federal funds sold - - - - -
Interest-bearing deposits 21,281 6,070 10,401 11,113 533
Investment securities 10,511 11,149 11,378 14,988 15,250
Loans held for sale - - - 3,072 3,134
Loans, net of unearned income 127,045 124,547 115,954 108,796 99,960
Allowance for loan losses   (1,608 )     (1,605 )     (1,607 )     (1,464 )     (1,415 )
Loans, net 125,437 122,942 114,347 107,332 98,545
Premises and equipment, net 851 909 958 1,010 1,049
Other assets   5,157       5,295       5,202       5,288       5,134  
Total assets $ 167,219     $ 149,115     $ 144,943     $ 147,071     $ 126,848  
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 29,852 $ 24,707 $ 23,566 $ 23,434 $ 19,198
Demand interest-bearing 20,607 21,566 15,817 17,128 19,404
Money market and savings 54,169 42,114 45,221 45,942 41,072
Time deposits of less than $100,000 16,239 17,939 17,824 17,719 13,298
Time deposits of $100,000 or more   26,798       28,606       28,656       29,321       18,579  
Total deposits 147,665 134,932 131,084 133,544 111,551
Federal Home Loan Bank borrowings - - - - 2,000
Subordinated debentures 4,870 - - - -
Interest payable and other liabilities   668       456       510       454       464  
Total liabilities   153,203       135,388       131,594       133,998       114,015  
 
SHAREHOLDERS' EQUITY
Common stock 13,185 13,161 13,095 12,981 12,960
Retained Earnings 615 414 160 (65 ) (234 )
Accumulated other comprehensive income (loss)   216       152       94       157       107  
Total shareholders' equity   14,016       13,727       13,349       13,073       12,833  
Total liabilities and shareholders' equity $ 167,219     $ 149,115     $ 144,943     $ 147,071     $ 126,848  
 
Total equity / total assets 8.38 % 9.21 % 9.21 % 8.89 % 10.12 %
Book value per share $ 11.19 $ 10.96 $ 10.84 $ 10.79 $ 10.59
 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
     
 
Three months ended
  03/31/15       12/31/14       03/31/14  
 
INTEREST INCOME
Loans $ 1,587 $ 1,552 $ 1,275
Federal funds sold - - -
Investment securities 77 83 155
Other   18       17       10  
Total interest income   1,682       1,652       1,440  
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 6 5 5
Money market and savings 35 27 58
Time deposits 87 91 57
Other   41       -       1  
Total interest expense   169       123       121  
 
Net interest income 1,513 1,529 1,319
Provision for credit losses   -       -       24  

Net interest income after provision for credit losses

  1,513       1,529       1,295  
 
NON-INTEREST INCOME
Service charges on deposit accounts 22 32 19
Gain on sale of SBA loans - - -
Gain (loss) on sale of other real estate owned - -
Gain on sale of securities - - (6 )
Other non-interest income   156       130       97  
Total non-interest income   178       162       110  
 
OPERATING EXPENSES
Salaries and benefits 733 715 638
Premises and fixed assets 140 138 139
Other   434       413       415  
Total operating expenses   1,307       1,266       1,192  
 
Income before income taxes 384 425 213
Income taxes 158 171 82
         
NET INCOME $ 226     $ 254     $ 131  
 
EARNINGS PER SHARE
Basic earnings per share $ 0.18     $ 0.20     $ 0.11  
Diluted earnings per share $ 0.17     $ 0.19     $ 0.10  
Average common shares outstanding   1,252,000       1,247,652       1,212,000  

Average common and equivalent shares outstanding

  1,342,315       1,339,125       1,316,906  
 
PERFORMANCE MEASURES
Return on average assets 0.58 % 0.68 % 0.41 %
Return on average equity 6.49 % 7.43 % 4.11 %
Net interest margin 4.11 % 4.26 % 4.42 %
Efficiency ratio 77.29 % 74.87 % 83.41 %

Contacts

Cornerstone Community Bancorp
Jeffrey P. Finck, 530-222-1460
President & CEO
jfinck@bankcornerstone.com
Patrick E. Phelan, 530-222-1460
Chief Financial Officer
pphelan@bankcornerstone.com

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