Cornerstone Community Bancorp Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2020

·10 min read

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the fourth quarter ended December 31, 2020.

The Company reported net income of $2,059,000 for the three months ended December 31, 2020 compared to net income of $884,000 for the same period last year. Diluted earnings per share were $1.36 for the three months ended December 31, 2020 compared to $0.58 for the same period last year.

The return on average assets for the three months ended December 31, 2020 was 1.68% and the return on average equity was 27.70%. The tax-equivalent net interest margin was 3.81% for the three months ended December 31, 2020 compared to 4.03% for the same period last year and the efficiency ratio declined to 39.69% for the three months ended December 31, 2020 compared to 58.78% for the same period last year.

For the year ended December 31, 2020, the Company reported net income of $4,626,000 compared to net income of $3,452,000 for the same period last year. Diluted earnings per share were $3.04 for the year ended December 31, 2020 compared to $2.27 for the same period last year.

The return on average assets for the year ended December 31, 2020 was 1.09% and the return on average equity was 16.53%.

Net income for the year ended December 31, 2020 reflects a $1.6 million provision for credit losses related to the economic uncertainties of the COVID-19 pandemic.

President and CEO, Jeff Finck stated, "We had a record quarter and year. During the year, our team was busy helping both new and existing customers through the Paycheck Protection Program (PPP) application process. During the fourth quarter, the team was helping them navigate the forgiveness process. These efforts served to strengthen relationships with existing customers and attract new ones."

Net Interest Income

Net interest income increased to $4,465,000 for the quarter ended December 31, 2020 compared to $2,834,000 for the same quarter last year. Fourth quarter 2020 net interest income was driven by accelerated PPP fee recognition from borrower forgiveness processing. For the year ended December 31, 2020, net interest income increased to $13,836,000 compared to $10,971,000 for the same period last year.

The Company's tax-equivalent net interest margin was 3.81% for the fourth quarter of 2020 and 3.45% for the year ended December 31, 2020.

Provision for credit losses

There was no provision for credit losses recorded for the quarter ended December 31, 2020 compared to $100,000 for the same quarter last year. For the year ended December 31, 2020, the Company recorded a $1,600,000 provision for credit losses compared to $340,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended December 31, 2020 was $345,000 compared to $201,000 for the quarter ended December 31, 2019. For the year ended December 31, 2020, non-interest income was $1,239,000 compared to $1,206,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,909,000 for the quarter ended December 31, 2020 compared to $1,784,000 for the same period last year. For the year ended December 31, 2020, non-interest expense was $7,156,000 compared to $7,071,000 for the same period last year.

Balance Sheet

Interest-bearing deposits increased $74.2 million at December 31, 2020 compared to December 31, 2019. Investment securities increased $37.0 million at December 31, 2020 compared to December 31, 2019.

Total loans, net of unearned income at December 31, 2020 were $332.2 million compared to $241.7 million at December 31, 2019.

Total deposits were $433.3 million at December 31, 2020 compared to total deposits of $253.4 million at December 31, 2019.

Credit Quality

The allowance for loan losses was $4,009,000, or 1.21% of loans, net of unearned income at December 31, 2020, compared to $2,409,000, or 1.00% of loans, net of unearned income at December 31, 2019. There were no nonperforming assets at December 31, 2020 and December 31, 2019.

Capital

At December 31, 2020, shareholders’ equity totaled $30.1 million compared to $25.8 million at December 31, 2019. Book value was $20.87 per share at December 31, 2020 compared to $17.79 per share at December 31, 2019.

During the fourth quarter of 2020, the Company repurchased 49,800 shares of its common stock for a total of $900,368.

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 2020), 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)

12/31/20

09/30/20

06/30/20

03/31/20

12/31/19

ASSETS

Cash and due from banks

$

3,811

$

5,455

$

6,350

$

4,965

$

6,038

Federal funds sold

14,166

5,045

10,402

17,385

4,575

Interest-bearing deposits

77,045

62,110

73,310

18,928

2,825

Investment securities

50,336

50,699

16,173

13,144

13,355

Loans held for sale

-

-

-

-

-

Loans, net of unearned income

332,176

342,416

333,620

250,353

241,662

Allowance for loan losses

(4,009

)

(4,009

)

(4,009

)

(3,859

)

(2,409

)

Loans, net

328,167

338,407

329,611

246,494

239,253

Premises and equipment, net

11,581

10,992

11,095

11,180

11,216

Other assets

12,255

12,577

11,882

11,330

11,093

Total assets

$

497,361

$

485,285

$

458,823

$

323,426

$

288,355

LIABILITIES

Deposits:

Demand noninterest-bearing

$

108,147

$

103,824

$

96,395

$

58,357

$

52,352

Demand interest-bearing

108,097

104,819

90,633

51,608

52,058

Money market and savings

146,655

87,035

79,550

77,273

74,560

Time deposits of less than $100,000

15,418

21,103

22,925

26,503

18,395

Time deposits of $100,000 or more

55,021

54,695

51,919

54,274

56,016

Total deposits

433,338

371,476

341,422

268,015

253,381

Borrowings and other obligations

15,000

78,136

83,136

23,000

3,000

Subordinated debentures

16,645

4,923

4,920

4,917

4,914

Interest payable and other liabilities

2,294

1,854

1,765

1,382

1,235

Total liabilities

467,277

456,389

431,243

297,314

262,530

SHAREHOLDERS' EQUITY

Common stock

14,584

15,462

15,440

15,336

15,264

Retained Earnings

15,136

13,077

11,841

10,557

10,510

Accumulated other comprehensive income (loss)

364

357

299

219

51

Total shareholders' equity

30,084

28,896

27,580

26,112

25,825

Total liabilities and shareholders' equity

$

497,361

$

485,285

$

458,823

$

323,426

$

288,355

Total equity / total assets

6.05

%

5.95

%

6.01

%

8.07

%

8.96

%

Book value per share

$

20.87

$

19.38

$

18.50

$

17.63

$

17.79

Shares outstanding

1,441,241

1,491,041

1,491,041

1,481,041

1,452,041

CORNERSTONE COMMUNITY BANCORP

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in Thousands)

Three months ended

Year ended

12/31/20

09/30/20

12/31/19

12/31/20

12/31/19

INTEREST INCOME

Loans

$

4,761

$

3,695

$

3,349

$

15,424

$

13,065

Federal funds sold

2

1

40

24

175

Investment securities

162

161

65

495

238

Other

51

33

130

174

444

Total interest income

4,976

3,890

3,584

16,117

13,922

INTEREST EXPENSE

Deposits:

Interest-bearing demand

55

51

50

181

139

Money market and savings

80

79

241

464

906

Time deposits

155

198

351

944

1,465

Other

221

186

108

692

441

Total interest expense

511

514

750

2,281

2,951

Net interest income

4,465

3,376

2,834

13,836

10,971

Provision for credit losses

-

-

100

1,600

340

Net interest income after provision

for credit losses

4,465

3,376

2,734

12,236

10,631

NON-INTEREST INCOME

Service charges on deposit accounts

55

49

61

222

255

Gain on sale of loans

61

-

-

247

417

Gain (loss) on sale of other real estate owned

-

-

-

-

-

Gain (loss) on sale of securities

-

91

-

91

-

Other non-interest income

229

156

140

679

534

Total non-interest income

345

296

201

1,239

1,206

OPERATING EXPENSES

Salaries and benefits

970

979

887

3,280

3,636

Premises and fixed assets

182

200

239

891

859

Other

757

760

658

2,985

2,576

Total operating expenses

1,909

1,939

1,784

7,156

7,071

Income before income taxes

2,901

1,733

1,151

6,319

4,766

Income taxes

842

497

267

1,693

1,314

NET INCOME

$

2,059

$

1,236

$

884

$

4,626

$

3,452

EARNINGS PER SHARE

Basic earnings per share

$

1.39

$

0.83

$

0.61

$

3.12

$

2.41

Diluted earnings per share

$

1.36

$

0.81

$

0.58

$

3.04

$

2.27

Average common shares outstanding

1,477,361

1,491,041

1,442,639

1,483,575

1,435,255

Average common and equivalent

shares outstanding

1,511,365

1,522,872

1,527,238

1,522,714

1,521,093

PERFORMANCE MEASURES

Return on average assets

1.68

%

1.05

%

1.16

%

1.09

%

1.22

%

Return on average equity

27.70

%

17.36

%

13.87

%

16.53

%

14.33

%

Tax-equivalent net interest margin

3.81

%

2.99

%

4.03

%

3.45

%

4.21

%

Efficiency ratio

39.69

%

52.81

%

58.78

%

47.47

%

58.07

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210121005993/en/

Contacts

Jeffrey P. Finck
President & CEO
530.222.1460

Patrick E. Phelan
Chief Financial Officer
530.222.1460