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

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

%

 

Contacts

Matthew B. Moseley

President & CEO

530.222.1460

Patrick E. Phelan

Chief Financial Officer

530.222.1460

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