Cornerstone Community Bancorp Reports Financial Results For the Third Quarter Ended September 30, 2023

RED BLUFF, Calif., October 23, 2023--(BUSINESS WIRE)--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the third quarter ended September 30, 2023.

The Company reported net income of $1,920,000 for the three months ended September 30, 2023 compared to net income of $1,936,000 for the same period last year. Diluted earnings per share were $1.26 for the three months ended September 30, 2023 compared to $1.27 for the same period last year.

The return on average assets for the three months ended September 30, 2023 was 1.21% and the return on average equity was 19.58%. The tax-equivalent net interest margin was 3.68% for the three months ended September 30, 2023 compared to 3.60% for the same period last year.

For the nine months ended September 30, 2023, the Company reported net income of $5,479,000 compared to net income of $5,317,000 for the same period last year. Diluted earnings per share were $3.60 for the nine months ended September 30, 2023 compared to $3.48 for the same period last year.

The return on average assets for the nine months ended September 30, 2023 was 1.18% and the return on average equity was 19.51%.

President and CEO, Matt Moseley stated, "Cornerstone Community Bank continues to perform well in this challenging environment and enjoys strong community and customer support. I am proud of our team and our continued success."

Net Interest Income

Net interest income increased to $5,646,000 for the quarter ended September 30, 2023 compared to $5,196,000 for the same quarter last year. For the nine months ended September 30, 2023, net interest income increased to $16,366,000 compared to $14,151,000 for the same period last year.

Provision for credit losses on loans

The Company recorded a $200,000 provision for credit losses on loans during the three months ended September 30, 2023 compared to $40,000 for the same period last year. For the nine months ended September 30, 2023, the Company recorded a $530,000 provision for credit losses compared to $113,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended September 30, 2023 was $369,000 compared to $265,000 for the quarter ended September 30, 2022. For the nine months ended September 30, 2023, noninterest income was $1,031,000 compared to $795,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $3,168,000 for the quarter ended September 30, 2023 compared to $2,699,000 for the same period last year. For the nine months ended September 30, 2023, non-interest expense was $9,276,000 compared to $7,368,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at September 30, 2023 were $470.1 million compared to $400.5 million at September 30, 2022.

Total deposits were $575.7 million at September 30, 2023 compared to total deposits of $545.3 million at September 30, 2022.

Credit Quality

The allowance for credit losses on loans was $5,813,000, or 1.24% of loans, net of unearned income, at September 30, 2023, compared to $5,172,000, or 1.29% of loans, net of unearned income, at September 30, 2022. Nonperforming assets totaled $229,000 at September 30, 2023. There were no nonperforming assets at September 30, 2022.

Capital

At September 30, 2023, shareholders’ equity totaled $38.5 million compared to $30.6 million at September 30, 2022. At September 30, 2023, the Company's book value per common share was $26.01 compared to $20.81 at September 30, 2022.

At September 30, 2023, the Bank’s estimated total risk-based capital ratio was 12.78% and its tier 1 capital to risk weighted assets ratio was 11.66%. The Bank remains well capitalized under the regulatory framework for prompt corrective action.

About Cornerstone Community Bancorp

Cornerstone Community Bancorp, a bank holding company headquartered in Red Bluff, California, serves the Red Bluff, Redding and Anderson communities through its wholly-owned subsidiary, Cornerstone Community Bank with a headquarters office in Red Bluff, two banking offices in Redding and one in Anderson. 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 Coronavirus Aid, Relief and Economic Security Act of 2022), 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)
	09/30/23			06/30/23			03/31/23			12/31/22			09/30/22
ASSETS
Cash and due from banks	$	5,492		$	8,482		$	7,365		$	5,628		$	6,011
Federal funds sold		-			-			124			123			122
Interest-bearing deposits		23,970			34,076			44,706			25,212			57,618
Investment securities		90,086			93,889			95,139			94,435			95,511
Loans held for sale		-			-			-			-			-
Loans, net of unearned income		470,060			447,339			431,475			420,415			400,480
Allowance for loan losses		(5,813	)		(5,617	)		(5,397	)		(5,159	)		(5,172	)
Loans, net		464,247			441,722			426,079			415,256			395,308
Premises and equipment, net		14,437			14,492			14,492			14,601			14,671
Other assets		31,241			29,724			28,906			27,326			21,261
Total assets	$	629,472		$	622,385		$	616,812		$	582,581		$	590,502
LIABILITIES
Deposits:
Demand noninterest-bearing	$	100,791		$	109,775		$	125,008		$	126,946		$	129,236
Demand interest-bearing		190,645			179,508			165,203			136,655			138,630
Money market and savings		176,373			177,976			180,996			182,787			201,316
Time deposits		107,894			101,991			94,542			88,430			76,121
Total deposits		575,703			569,250			565,749			534,818			545,303
Borrowings and other obligations		-			-			-			-			-
Subordinated debentures		11,762			11,756			11,750			11,744			11,738
Interest payable and other liabilities		3,512			3,070			2,954			2,755			2,892
Total liabilities		590,977			584,076			580,452			549,317			559,933
SHAREHOLDERS' EQUITY
Common stock		15,130			15,140			15,113			15,075			14,964
Retained Earnings		35,747			33,827			31,963			30,294			28,368
Accumulated other comprehensive income (loss)		(12,382	)		(10,658	)		(10,716	)		(12,105	)		(12,763	)
Total shareholders' equity		38,495			38,309			36,360			33,264			30,569
Total liabilities and shareholders' equity	$	629,472		$	622,385		$	616,812		$	582,581		$	590,502
Total equity / total assets		6.12	%		6.16	%		5.89	%		5.71	%		5.18	%
Book value per share	$	26.01		$	25.89		$	24.57		$	22.48		$	20.81
Shares outstanding		1,479,862			1,479,862			1,479,862			1,479,862			1,469,091

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
	Three months ended										Nine months ended
	09/30/23			06/30/23			09/30/22				09/30/23			09/30/22
INTEREST INCOME
Loans	$	6,517		$	5,955		$	5,018			$	18,023		$	13,851
Federal funds sold		-			2			1				3			1
Investment securities		739			734			543				2,197			1,378
Other		558			667			354				1,692			558
Total interest income		7,814			7,358			5,916				21,915			15,788
INTEREST EXPENSE
Deposits:
Interest-bearing demand		289			209			130				745			240
Money market and savings		798			675			260				2,052			524
Time deposits		933			784			182				2,306			420
Other		148			149			148				446			453
Total interest expense		2,168			1,817			720				5,549			1,637
Net interest income		5,646			5,541			5,196				16,366			14,151
Provision for credit losses		200			220			40				530			113
Net interest income after provision
for credit losses		5,446			5,321			5,156				15,836			14,038
NON-INTEREST INCOME
Service charges on deposit accounts		63			75			67				200			200
Gain on sale of loans		-			-			-				-			-
Gain (loss) on sale of other real estate owned		-			-			-				-			-
Gain (loss) on sale of securities		-			-			-				-			-
Other non-interest income		306			278			198				831			595
Total non-interest income		369			353			265				1,031			795
OPERATING EXPENSES
Salaries and benefits		1,781			1,668			1,408				5,098			3,773
Premises and fixed assets		268			266			227				847			612
Other		1,119			1,151			1,064				3,331			2,983
Total operating expenses		3,168			3,085			2,699				9,276			7,368
Income before income taxes		2,647			2,589			2,722				7,591			7,465
Income taxes		727			725			786				2,112			2,148
NET INCOME	$	1,920		$	1,864		$	1,936			$	5,479		$	5,317
EARNINGS PER SHARE
Basic earnings per share	$	1.30		$	1.26		$	1.31			$	3.70		$	3.61
Diluted earnings per share	$	1.26		$	1.22		$	1.27			$	3.60		$	3.48
Average common shares outstanding		1,479,862			1,479,862			1,473,276				1,479,862			1,471,582
Average common and equivalent
shares outstanding		1,524,640			1,522,072			1,523,830				1,524,029			1,528,628
PERFORMANCE MEASURES
Return on average assets		1.21	%		1.20	%		1.30	%			1.18	%		1.21	%
Return on average equity		19.58	%		19.71	%		23.11	%			19.51	%		20.48	%
Tax-equivalent net interest margin		3.68	%		3.73	%		3.60	%			3.69	%		3.37	%
Efficiency ratio		52.67	%		52.34	%		49.42	%			53.32	%		49.30	%

View source version on businesswire.com: https://www.businesswire.com/news/home/20231023232684/en/

Contacts

Matthew B. Moseley
President & CEO
530.222.1460

Patrick E. Phelan
Chief Financial Officer
530.222.1460