Cornerstone Community Bancorp Reports Financial Results for the Second Quarter Ended June 30, 2017

RED BLUFF, Calif.--()--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the second quarter ended June 30, 2017.

The Company reported net income of $508,000 for the three months ended June 30, 2017 compared to net income of $361,000 for the same period last year. Diluted earnings per share were $0.37 for the three months ended June 30, 2017 compared to $0.27 for the same period last year.

The return on average assets for the three months ended June 30, 2017 was 0.99% and the return on average equity was 12.23%.

For the six months ended June 30, 2017, the Company reported net income of $898,000 compared to net income of $564,000 for the same period last year. Diluted earnings per share were $0.67 for the six months ended June 30, 2017 compared to $0.42 for the same period last year.

The return on average assets for the six months ended June 30, 2017 was 0.89% and the return on average equity was 10.97%.

President and CEO, Jeff Finck, stated, “We are pleased with our second quarter results. We achieved double-digit percentage growth in loans, deposits and earnings. Earlier this month, we opened our downtown Redding branch office which will provide us with additional lending and deposit generation opportunities.”

Net Interest Income

Net interest income increased by 21.3% to $1,985,000 for the quarter ended June 30, 2017 compared to $1,636,000 for the same quarter last year. For the six months ended June 30, 2017, net interest income increased by 18.7% to $3,768,000 compared to $3,174,000 for the same period last year.

Provision for credit losses

There was no provision for credit losses recorded during both the quarter ended June 30, 2017 and June 30, 2016.

The Company recorded a $150,000 provision for credit losses for the six months ended June 30, 2017 compared to no provision for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended June 30, 2017 was $216,000 compared to $257,000 for the quarter ended June 30, 2016. For the six months ended June 30, 2017, non-interest income was $591,000 compared to $372,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,339,000 for the quarter ended June 30, 2017 compared to $1,281,000 for the same period last year. For the six months ended June 30, 2017, non-interest expense was $2,683,000 compared to $2,590,000 for the same period last year.

Balance Sheet

The Company had total assets at June 30, 2017 of $210.6 million compared to $178.5 million at June 30, 2016.

Total loans outstanding at June 30, 2017 were $171.7 million compared to $145.9 million at June 30, 2016, representing an increase of $25.8 million, or 17.7%.

Total deposits were $179.1 million at June 30, 2017 compared to total deposits of $145.5 million at June 30, 2016, representing an increase of $33.6 million, or 23.1%.

Credit Quality

The allowance for loan losses was $1,778,000, or 1.05% of loans, net of unearned income at June 30, 2017, compared to $1,620,000, or 1.11% of loans, net of unearned income at June 30, 2016. Nonperforming assets at June 30, 2017 were $4,000 compared to $18,000 at June 30, 2016.

Capital

At June 30, 2017, shareholders’ equity totaled $16.8 million compared to $15.4 million at June 30, 2016. Book value per share increased by 10.2% to $13.53 per share at June 30, 2017 compared to $12.28 per share at June 30, 2016.

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)
           
 
 
  06/30/17       03/31/17       12/31/16       09/30/16       06/30/16  
 
ASSETS
Cash and due from banks $ 3,516 $ 3,809 $ 3,360 $ 2,937 $ 2,630
Federal funds sold 20 20 20 20 20
Interest-bearing deposits 13,739 16,773 17,225 25,372 10,370
Investment securities 12,793 13,052 13,338 14,003 14,453
Loans held for sale 2,603 - 3,974 - -
Loans, net of unearned income 169,070 159,768 150,413 147,477 145,939
Allowance for loan losses   (1,778 )     (1,773 )     (1,623 )     (1,621 )     (1,620 )
Loans, net

167,292

157,995 148,790 145,856 144,319
Premises and equipment, net 2,006 1,854 1,032 1,086 1,038
Other assets   8,605       6,460       6,643       6,269       5,659  
Total assets $ 210,574     $ 199,963     $ 194,382     $ 195,543     $ 178,489  
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 33,101 $ 27,439 $ 23,042 $ 27,460 $ 24,856
Demand interest-bearing 24,610 23,392 22,490 22,212 21,222
Money market and savings 59,759 60,877 62,161 65,426 52,239
Time deposits of less than $100,000 19,020 18,984 18,595 12,692 12,498
Time deposits of $100,000 or more   42,565       35,317       34,804       34,771       34,662  
Total deposits 179,055 166,009 161,092 162,561 145,477
Federal Home Loan Bank borrowings 9,000 12,000 12,000 12,000 12,000
Subordinated debentures 4,887 4,885 4,883 4,880 4,878
Interest payable and other liabilities   868       865       746       850       765  
Total liabilities   193,810       183,759       178,721       180,291       163,120  
 
SHAREHOLDERS' EQUITY
Common stock 13,115 13,092 12,925 12,847 13,303
Retained Earnings 3,557 3,050 2,659 2,202 1,871
Accumulated other comprehensive income (loss)   92       62       77       203       195  
Total shareholders' equity   16,764       16,204       15,661       15,252       15,369  
Total liabilities and shareholders' equity $ 210,574     $ 199,963     $ 194,382     $ 195,543     $ 178,489  
 
Total equity / total assets 7.96 % 8.10 % 8.06 % 7.80 % 8.61 %
Book value per share $ 13.53 $ 13.08 $ 12.90 $ 12.67 $ 12.28
 
 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
             
 
 
 
Three months ended   Six months ended
  06/30/17       03/31/17       06/30/16       06/30/17       06/30/16  
 
INTEREST INCOME
Loans $ 2,209 $ 1,999 $ 1,844 $ 4,208 $ 3,594
Federal funds sold - - - - -
Investment securities 78 81 89 159 164
Other   76       65       30       141       72  
Total interest income   2,363       2,145       1,963       4,508       3,830  
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 10 11 8 21 18
Money market and savings 95 94 72 189 141
Time deposits 146 126 114 272 229
Other   127       131       133       258       268  
Total interest expense   378       362       327       740       656  
 
Net interest income 1,985 1,783 1,636 3,768 3,174
Provision for credit losses   -       150       -       150       -  

Net interest income after provision for credit losses

  1,985       1,633       1,636       3,618       3,174  
 
NON-INTEREST INCOME
Service charges on deposit accounts 46 44 40 90 76
Gain on sale of loans 78 243 208 321 208
Gain (loss) on sale of other real estate owned - - (77 ) - (77 )
Gain (loss) on sale of securities - - - - -
Other non-interest income   92       88       86       180       165  
Total non-interest income   216       375       257       591       372  
 
OPERATING EXPENSES
Salaries and benefits 732 737 668 1,469 1,370
Premises and fixed assets 134 144 156 278 297
Other   473       463       457       936       923  
Total operating expenses   1,339       1,344       1,281       2,683       2,590  
 
Income before income taxes 862 664 612 1,526 956
Income taxes 354 274 251 628 392
                 
NET INCOME $ 508     $ 390     $ 361     $ 898     $ 564  
 
EARNINGS PER SHARE
Basic earnings per share $ 0.41     $ 0.32     $ 0.29     $ 0.73     $ 0.45  
Diluted earnings per share $ 0.37     $ 0.29     $ 0.27     $ 0.67     $ 0.42  
Average common shares outstanding   1,239,256       1,233,978       1,252,000       1,236,632       1,252,000  

Average common and equivalent shares outstanding

  1,358,631       1,338,511       1,342,715       1,349,363       1,343,937  
 
PERFORMANCE MEASURES
Return on average assets 0.99 % 0.78 % 0.82 % 0.89 % 0.64 %
Return on average equity 12.23 % 9.68 % 9.50 % 10.97 % 7.49 %
Net interest margin 4.04 % 3.78 % 3.88 % 3.91 % 3.76 %
Efficiency ratio 60.84 % 62.28 % 67.67 % 61.55 % 73.04 %
 

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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