Cornerstone Community Bancorp Reports Financial Results for the Fourth Quarter and Full Year Ended December 31, 2016 and Appoints Bruce Dean Director

RED BLUFF, Calif.--()--Cornerstone Community Bancorp, (OTC Pink: CRSB), announced today its financial results for the fourth quarter and full year ended December 31, 2016.

The Company reported net income of $457,000 for the three months ended December 31, 2016 compared to net income of $144,000 for the same period last year. Diluted earnings per share were $0.35 for the three months ended December 31, 2016 compared to $0.11 for the same period last year.

Net income for the year ended December 31, 2016 was $1,353,000, or $1.02 per diluted share compared to net income of $918,000, or $0.68 per diluted share, for the year ended December 31, 2015.

The return on average assets for the three months ended December 31, 2016 was 0.94% and the return on average equity was 11.74%. For the year ended December 31, 2016, the return on average assets was 0.73% and the return on average equity was 8.85%.

President and CEO, Jeff Finck, stated, “2016 was another great year for the Company. The continued momentum in loan and deposit growth led to a 50% increase in diluted earnings per share and a 10% increase in book value per share.”

Net Interest Income

Net interest income was $1,819,000 for the quarter ended December 31, 2016 compared to $1,533,000 for the same quarter last year. For the year ended December 31, 2016, net interest income was $6,679,000 compared to $6,076,000 for the year ended December 31, 2015 representing an increase of $603,000, or 10%.

Provision for credit losses

There was no provision for credit losses for the quarter ended December 31, 2016 and December 31, 2015. There was also no provision for credit losses for the year ended December 31, 2016 and December 31, 2015.

Non-Interest Income

Non-interest income for the quarter ended December 31, 2016 was $257,000 compared to $9,000 for the quarter ended December 31, 2015.

For the year ended December 31, 2016, non-interest income was $760,000 compared to $900,000 for the year ended December 31, 2015. The decline in non-interest income was primarily due to the reduction in mortgage income.

Non-Interest Expense

Non-interest expense was $1,301,000 for the quarter ended December 31, 2016 compared to $1,298,000 for the same period last year. For the year ended December 31, 2016, non-interest expense was $5,145,000 compared to $5,417,000 for the same period last year.

Balance Sheet

The Company had total assets at December 31, 2016 of $194.4 million, compared to $171.4 million at December 31, 2015.

Total loans outstanding at December 31, 2016, were $154.4 million compared to $137.1 million at December 31, 2015, representing an increase of $17.3 million, or 12.6%.

Total deposits were $161.1 million at December 31, 2016 compared to total deposits of $136.1 million at December 31, 2015, representing an increase of $25.0 million, or 18.4%.

Credit Quality

The allowance for loan losses was $1,623,000, or 1.08% of loans, net of unearned income at December 31, 2016, compared to $1,619,000, or 1.18% of loans, net of unearned income at December 31, 2015. Nonperforming assets at December 31, 2016 were $11,000, or 0.01% of total assets, compared to $381,000, or 0.22% of total assets at December 31, 2015.

Capital

At December 31, 2016, shareholders’ equity totaled $15.7 million compared to $14.7 million at December 31, 2015. Book value per share increased by 10.2% to $12.90 per share at December 31, 2016 compared to $11.71 per share at December 31, 2015.

During 2016, the Company, pursuant to its existing stock repurchase plan, repurchased 47,744 shares of its common stock at an average price of $10.04 per share, for a total of $479,185.

Board of Directors Welcome New Member

Bruce Dean, President and Chief Executive Officer of Black Bear Diner, has joined the Cornerstone Community Bancorp and Cornerstone Community Bank Board of Directors. “Mr. Dean is a restaurant industry veteran with 40 plus years of experience and oversees all facets of Black Bear Diner’s business, franchise, and menu development. We are honored to have Mr. Dean join our Board of Directors,” said Ken Robison, Chairman of Cornerstone Community Bancorp’s Board of Directors. “His business knowledge and experience, coupled with his involvement in Redding and the North State makes him a valuable addition to our growing company.”

Mr. Dean is the co-founder of Black Bear Diner. He holds a B.S. degree in business administration from the University of California, Davis. In 2015, Mr. Dean served as the California Restaurant Association’s Chairman of the Board.

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)
 
 
12/31/16     09/30/16     06/30/16     03/31/16     12/31/15
 
ASSETS
Cash and due from banks $ 3,360 $ 2,937 $ 2,630 $ 3,007 $ 3,206
Federal funds sold 20 20 20 20 -
Interest-bearing deposits 17,225 25,372 10,370 18,009 15,877
Investment securities 13,338 14,003 14,453 14,645 9,640
Loans held for sale 3,974 - - - -
Loans, net of unearned income 150,413 147,477 145,939 139,660 137,057
Allowance for loan losses   (1,623 )       (1,621 )       (1,620 )       (1,620 )       (1,619 )
Loans, net 148,790 145,856 144,319 138,040 135,438
Premises and equipment, net 1,032 1,086 1,038 1,051 1,013
Other assets   6,628         6,269         5,659         6,029         6,208  
Total assets $ 194,367       $ 195,543       $ 178,489       $ 180,801       $ 171,382  
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 23,042 $ 27,460 $ 24,856 $ 23,678 $ 22,269
Demand interest-bearing 22,490 22,212 21,222 20,843 20,605
Money market and savings 62,161 65,426 52,239 53,240 45,256
Time deposits of less than $100,000 18,595 12,692 12,498 14,334 15,092
Time deposits of $100,000 or more   34,804         34,771         34,662         33,219         32,889  
Total deposits 161,092 162,561 145,477 145,314 136,111
Federal Home Loan Bank borrowings 12,000 12,000 12,000 15,000 15,000
Subordinated debentures 4,883 4,880 4,878 4,876 4,874
Interest payable and other liabilities   731         850         765         697         734  
Total liabilities   178,706         180,291         163,120         165,887         156,719  
 
SHAREHOLDERS' EQUITY
Common stock 12,925 12,847 13,303 13,280 13,257
Retained Earnings 2,659 2,202 1,871 1,510 1,307
Accumulated other comprehensive income (loss)   77         203         195         124         99  
Total shareholders' equity   15,661         15,252         15,369         14,914         14,663  
Total liabilities and shareholders' equity $ 194,367       $ 195,543       $ 178,489       $ 180,801       $ 171,382  
 
Total equity / total assets 8.06 % 7.80 % 8.61 % 8.25 % 8.56 %
Book value per share $ 12.90 $ 12.67 $ 12.28 $ 11.91 $ 11.71
 
             
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
         
 
 
 
Three months ended Year ended
12/31/16     09/30/16     12/31/15 12/31/16     12/31/15
 
INTEREST INCOME
Loans $ 2,002 $ 1,897 $ 1,754 $ 7,493 $ 6,766
Federal funds sold - - - - -
Investment securities 79 81 74 324 300
Other   91         45         33     208         140  
Total interest income   2,172         2,023         1,861     8,025         7,206  
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 11 10 11 39 29
Money market and savings 92 83 62 316 196
Time deposits 117 110 115 456 418
Other   133         134         140     535         487  
Total interest expense   353         337         328     1,346         1,130  
 
Net interest income 1,819 1,686 1,533 6,679 6,076
Provision for credit losses   -         -         -     -         -  

Net interest income after provision for credit losses

  1,819         1,686         1,533     6,679         6,076  
 
NON-INTEREST INCOME
Service charges on deposit accounts 45 44 33 165 137
Gain on sale of loans 127 - - 335 321
Gain (loss) on sale of other real estate owned - - (100 ) (77 ) (100 )
Gain (loss) on sale of securities - - - - -
Other non-interest income   85         87         76     337         542  
Total non-interest income   257         131         9     760         900  
 
OPERATING EXPENSES
Salaries and benefits 730 666 704 2,766 2,904
Premises and fixed assets 137 140 139 574 561
Other   434         448         455     1,805         1,952  
Total operating expenses   1,301         1,254         1,298     5,145         5,417  
 
Income before income taxes 775 563 244 2,294 1,559
Income taxes 318 231 100 941 641
                     
NET INCOME $ 457       $ 332       $ 144   $ 1,353       $ 918  
 
EARNINGS PER SHARE
Basic earnings per share $ 0.38       $ 0.27       $ 0.12   $ 1.09       $ 0.73  
Diluted earnings per share $ 0.35       $ 0.25       $ 0.11   $ 1.02       $ 0.68  
Average common shares outstanding   1,206,756         1,234,156         1,252,000     1,236,141         1,252,000  

Average common and equivalent shares outstanding

  1,304,164         1,330,424         1,347,958     1,330,522         1,343,211  
 
PERFORMANCE MEASURES
Return on average assets 0.94 % 0.70 % 0.33 % 0.73 % 0.54 %
Return on average equity 11.74 % 8.58 % 3.90 % 8.85 % 6.41 %
Net interest margin 3.85 % 3.70 % 3.66 % 3.78 % 3.74 %
Efficiency ratio 62.67 % 69.01 % 84.18 % 69.16 % 77.65 %

Contacts

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

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