Cornerstone Community Bancorp Reports Financial Results for the Third Quarter Ended September 30, 2021

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RED BLUFF, Calif., October 19, 2021--(BUSINESS WIRE)--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the third quarter ended September 30, 2021.

The Company reported record net income of $2,085,000 for the three months ended September 30, 2021 compared to net income of $1,236,000 for the same period last year. Diluted earnings per share were $1.38 for the three months ended September 30, 2021 compared to $0.81 for the same period last year.

The return on average assets for the three months ended September 30, 2021 was 1.53% and the return on average equity was 23.52%. The tax-equivalent net interest margin was 3.66% for the three months ended September 30, 2021 compared to 2.99% for the same period last year and the efficiency ratio was 39.07% for the three months ended September 30, 2021 compared to 52.81% for the same period last year.

For the nine months ended September 30, 2021, the Company reported net income of $5,948,000 compared to net income of $2,567,000 for the same period last year. Diluted earnings per share were $3.96 for the nine months ended September 30, 2021 compared to $1.68 for the same period last year.

The return on average assets for the nine months ended September 30, 2021 was 1.48% and the return on average equity was 23.98%.

President and CEO, Jeff Finck stated, "We posted record profits in the third quarter as loan and deposit totals continued to grow at a solid pace."

Net Interest Income

Net interest income increased to $4,756,000 for the quarter ended September 30, 2021 compared to $3,376,000 for the same quarter last year. For the nine months ended September 30, 2021, net interest income increased to $13,212,000 compared to $9,371,000 for the same period last year.

Provision for credit losses

Provision for credit losses were $400,000 for the quarter ended September 30, 2021 compared to no provision for the same quarter last year. For the nine months ended September 30, 2021, the Company recorded a $900,000 provision for credit losses compared to $1,600,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended September 30, 2021 was $714,000 compared to $296,000 for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, non-interest income was $2,013,000 compared to $894,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $2,137,000 for the quarter ended September 30, 2021 compared to $1,939,000 for the same period last year. For the nine months ended September 30, 2021, non-interest expense was $5,965,000 compared to $5,247,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income at September 30, 2021 were $388.5 million compared to $342.4 million at September 30, 2020.

Total deposits were $500.1 million at September 30, 2021 compared to total deposits of $371.5 million at September 30, 2020.

Credit Quality

The allowance for loan losses was $4,909,000, or 1.26% of loans, net of unearned income at September 30, 2021, compared to $4,009,000, or 1.17% of loans, net of unearned income at September 30, 2020. There were no nonperforming assets at September 30, 2021 and September 30, 2020.

Capital

At September 30, 2021, shareholders’ equity totaled $35.5 million compared to $28.9 million at September 30, 2020. Book value was $24.37 per share at September 30, 2021 compared to $19.38 per share at September 30, 2020.

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 2021), 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)

09/30/21

06/30/21

03/31/21

12/31/20

09/30/20

ASSETS

Cash and due from banks

$

4,765

$

5,450

$

5,417

$

3,811

$

5,455

Federal funds sold

2,600

2,256

5,761

14,166

5,045

Interest-bearing deposits

24,636

28,549

68,283

77,045

62,110

Investment securities

110,470

75,258

52,084

50,336

50,699

Loans held for sale

-

-

1,102

-

-

Loans, net of unearned income

388,532

390,748

382,253

332,176

342,416

Allowance for loan losses

(4,909

)

(4,509

)

(4,409

)

(4,009

)

(4,009

)

Loans, net

383,623

386,239

377,844

328,167

338,407

Premises and equipment, net

13,567

13,013

12,767

11,581

10,992

Other assets

14,863

14,972

13,974

12,724

12,577

Total assets

$

554,524

$

525,737

$

537,232

$

497,830

$

485,285

LIABILITIES

Deposits:

Demand noninterest-bearing

$

141,734

$

126,107

$

126,481

$

108,147

$

103,824

Demand interest-bearing

131,964

126,724

122,506

108,097

104,819

Money market and savings

150,149

150,086

163,232

146,655

87,035

Time deposits of less than $100,000

13,180

13,393

15,812

15,418

21,103

Time deposits of $100,000 or more

63,111

56,993

57,299

55,021

54,695

Total deposits

500,138

473,303

485,330

433,338

371,476

Borrowings and other obligations

5,000

5,000

5,000

15,000

78,136

Subordinated debentures

11,715

11,709

11,703

16,645

4,923

Interest payable and other liabilities

2,151

1,933

3,776

2,763

1,854

Total liabilities

519,004

491,945

505,809

467,746

456,389

SHAREHOLDERS' EQUITY

Common stock

14,814

14,771

14,681

14,584

15,462

Retained Earnings

21,084

18,999

17,183

15,136

13,077

Accumulated other comprehensive income (loss)

(378

)

22

(441

)

364

357

Total shareholders' equity

35,520

33,792

31,423

30,084

28,896

Total liabilities and shareholders' equity

$

554,524

$

525,737

$

537,232

$

497,830

$

485,285

Total equity / total assets

6.41

%

6.43

%

5.85

%

6.04

%

5.95

%

Book value per share

$

24.37

$

23.22

$

21.65

$

20.87

$

19.38

Shares outstanding

1,457,591

1,455,091

1,451,091

1,441,241

1,491,041

CORNERSTONE COMMUNITY BANCORP

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in Thousands)

Three months ended

Nine months ended

09/30/21

06/30/21

09/30/20

09/30/21

09/30/20

INTEREST INCOME

Loans

$

4,772

$

4,379

$

3,695

$

13,602

$

10,663

Federal funds sold

-

1

1

3

22

Investment securities

360

217

161

739

333

Other

35

53

33

120

123

Total interest income

5,167

4,650

3,890

14,464

11,141

INTEREST EXPENSE

Deposits:

Interest-bearing demand

46

45

51

138

126

Money market and savings

96

93

79

276

384

Time deposits

107

114

198

345

789

Other

162

159

186

493

471

Total interest expense

411

411

514

1,252

1,770

Net interest income

4,756

4,239

3,376

13,212

9,371

Provision for credit losses

400

100

-

900

1,600

Net interest income after provision for credit losses

4,356

4,139

3,376

12,312

7,771

NON-INTEREST INCOME

Service charges on deposit accounts

62

59

49

179

167

Gain on sale of loans

396

135

-

1,231

186

Gain (loss) on sale of other real estate owned

-

-

-

-

-

Gain (loss) on sale of securities

-

-

91

(45

)

91

Other non-interest income

256

228

156

648

450

Total non-interest income

714

422

296

2,013

894

OPERATING EXPENSES

Salaries and benefits

1,048

968

979

2,695

2,310

Premises and fixed assets

212

199

200

590

709

Other

877

848

760

2,680

2,228

Total operating expenses

2,137

2,015

1,939

5,965

5,247

Income before income taxes

2,933

2,546

1,733

8,360

3,418

Income taxes

848

730

497

2,412

851

NET INCOME

$

2,085

$

1,816

$

1,236

$

5,948

$

2,567

EARNINGS PER SHARE

Basic earnings per share

$

1.43

$

1.25

$

0.83

$

4.09

$

1.73

Diluted earnings per share

$

1.38

$

1.20

$

0.81

$

3.96

$

1.68

Average common shares outstanding

1,456,531

1,453,915

1,491,041

1,452,768

1,485,661

Average common and equivalent shares outstanding

1,512,738

1,510,621

1,522,872

1,503,150

1,526,516

PERFORMANCE MEASURES

Return on average assets

1.53

%

1.35

%

1.05

%

1.48

%

0.85

%

Return on average equity

23.52

%

22.17

%

17.36

%

23.98

%

12.49

%

Tax-equivalent net interest margin

3.66

%

3.33

%

2.99

%

3.48

%

3.28

%

Efficiency ratio

39.07

%

43.23

%

52.81

%

39.18

%

51.12

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20211019005728/en/

Contacts

Jeffrey P. Finck
President & CEO
530.222.1460

Patrick E. Phelan
Chief Financial Officer
530.222.1460

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