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Cornerstone Community Bancorp Reports Financial Results For the First Quarter Ended March 31, 2023

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the first quarter ended March 31, 2023.

The Company reported net income of $1,695,000 for the three months ended March 31, 2023 compared to net income of $1,675,000 for the same period last year. Diluted earnings per share were $1.11 for the three months ended March 31, 2023 compared to $1.09 for the same period last year.

The return on average assets for the three months ended March 31, 2023 was 1.13% and the return on average equity was 19.20%. The tax-equivalent net interest margin was 3.65% for the three months ended March 31, 2023 compared to 3.17% for the same period last year.

President and CEO, Matt Moseley, stated, “Cornerstone Community Bank continues to be a well performing bank due to our strong team and loyal customer base. While elevated levels of deposits have exited banks nation-wide, Cornerstone experienced deposit growth in the 1st quarter compared to both year-end 2022 and 1st quarter of 2022. The bank has a well-positioned liquidity profile with a diversified deposit base. Our estimated level of uninsured deposits at March 31, 2023 was 37% and the bank maintains both on and off balance sheet liquidity of $283 million. We have and will continue to focus on our core business practices. We are confident that our business model and our presence in the communities we serve will continue to deliver positive results to our shareholders and customers alike.”

Net Interest Income

Net interest income increased to $5,180,000 for the quarter ended March 31, 2023 compared to $4,350,000 for the same quarter last year.

Provision for credit losses on loans

The Company recorded a $110,000 provision for credit losses on loans during the three months ended March 31, 2023 compared to $18,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2023 was $310,000 compared to $264,000 for the quarter ended March 31, 2022.

Non-Interest Expense

Non-interest expense was $3,024,000 for the quarter ended March 31, 2023 compared to $2,243,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at March 31, 2023 were $431.5 million compared to $375.4 million at March 31, 2022.

Total deposits were $565.7 million at March 31, 2023 compared to total deposits of $532.3 million at March 31, 2022.

Credit Quality

The allowance for credit losses on loans was $5,397,000, or 1.25% of loans, net of unearned income, at March 31, 2023, compared to $5,077,000, or 1.35% of loans, net of unearned income, at March 31, 2022. Nonperforming assets totaled $233,000 at March 31, 2023. There were no nonperforming assets at March 31, 2022.

Adoption of CECL

The Company adopted the current expected credit loss ("CECL") accounting standard on January 1, 2023. Upon adoption of the CECL standard, the Company increased the allowance for credit losses on loans by $127,549 and reduced the allowance for credit losses on unfunded loan commitments by $90,366. The Company adopted this standard using a modified retrospective approach through a cumulative-effect adjustment to retained earnings of $26,191.

Capital

At March 31, 2023, shareholders’ equity totaled $36.4 million compared to $33.7 million at March 31, 2022. At March 31, 2023, the Company's book value per common share was $24.57 compared to $22.93 at March 31, 2022.

At March 31, 2023, the Bank’s estimated total risk-based capital ratio was 12.95% and its tier 1 capital to risk weighted assets ratio was 11.84%. 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)
 
03/31/23 12/31/22 09/30/22 06/30/22 03/31/22
 
ASSETS
Cash and due from banks

$

7,365

 

$

5,628

 

$

6,011

 

$

5,230

 

$

4,175

 

Federal funds sold

 

124

 

 

123

 

 

122

 

 

121

 

 

121

 

Interest-bearing deposits

 

44,706

 

 

25,212

 

 

57,618

 

 

48,277

 

 

73,629

 

Investment securities

 

95,139

 

 

94,435

 

 

95,511

 

 

102,692

 

 

99,748

 

Loans held for sale

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Loans, net of unearned income

 

431,475

 

 

420,415

 

 

400,480

 

 

399,156

 

 

375,369

 

Allowance for credit losses on loans

 

(5,397

)

 

(5,159

)

 

(5,172

)

 

(5,132

)

 

(5,077

)

Loans, net

 

426,079

 

 

415,256

 

 

395,308

 

 

394,024

 

 

370,292

 

Premises and equipment, net

 

14,492

 

 

14,601

 

 

14,671

 

 

14,691

 

 

14,757

 

Other assets

 

28,906

 

 

27,326

 

 

21,261

 

 

20,588

 

 

16,930

 

Total assets

$

616,812

 

$

582,581

 

$

590,502

 

$

585,623

 

$

579,652

 

 
LIABILITIES
Deposits:
Demand noninterest-bearing

$

125,008

 

$

126,946

 

$

129,236

 

$

130,249

 

$

131,136

 

Demand interest-bearing

 

165,203

 

 

136,655

 

 

138,630

 

 

131,623

 

 

126,331

 

Money market and savings

 

180,996

 

 

182,787

 

 

201,316

 

 

201,106

 

 

196,653

 

Time deposits

 

94,542

 

 

88,430

 

 

76,121

 

 

76,576

 

 

78,167

 

Total deposits

 

565,749

 

 

534,818

 

 

545,303

 

 

539,554

 

 

532,287

 

Borrowings and other obligations

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Subordinated debentures

 

11,750

 

 

11,744

 

 

11,738

 

 

11,732

 

 

11,726

 

Interest payable and other liabilities

 

2,954

 

 

2,755

 

 

2,892

 

 

2,631

 

 

1,899

 

Total liabilities

 

580,452

 

 

549,317

 

 

559,933

 

 

553,917

 

 

545,912

 

 
SHAREHOLDERS' EQUITY
Common stock

 

15,113

 

 

15,075

 

 

14,964

 

 

15,079

 

 

15,009

 

Retained Earnings

 

31,963

 

 

30,294

 

 

28,368

 

 

26,432

 

 

24,726

 

Accumulated other comprehensive income (loss)

 

(10,716

)

 

(12,105

)

 

(12,763

)

 

(9,805

)

 

(5,995

)

Total shareholders' equity

 

36,360

 

 

33,264

 

 

30,569

 

 

31,706

 

 

33,740

 

Total liabilities and shareholders' equity

$

616,812

 

$

582,581

 

$

590,502

 

$

585,623

 

$

579,652

 

 
Total equity / total assets

 

5.89

%

 

5.71

%

 

5.18

%

 

5.41

%

 

5.82

%

Book value per share

$

24.57

 

$

22.48

 

$

20.81

 

$

21.51

 

$

22.93

 

Shares outstanding

 

1,479,862

 

 

1,479,862

 

 

1,469,091

 

 

1,474,091

 

 

1,471,591

 

 
CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
 
Three months ended
03/31/23 12/31/22 03/31/22
 
INTEREST INCOME
Loans

$

5,551

 

$

5,178

 

$

4,348

 

Federal funds sold

 

1

 

 

1

 

 

-

 

Investment securities

 

724

 

 

676

 

 

371

 

Other

 

467

 

 

515

 

 

58

 

Total interest income

 

6,744

 

 

6,370

 

 

4,777

 

 
INTEREST EXPENSE
Deposits:
Interest-bearing demand

 

247

 

 

214

 

 

46

 

Money market and savings

 

579

 

 

450

 

 

117

 

Time deposits

 

589

 

 

401

 

 

107

 

Other

 

149

 

 

149

 

 

157

 

Total interest expense

 

1,564

 

 

1,214

 

 

427

 

 
Net interest income

 

5,180

 

 

5,156

 

 

4,350

 

Provision for credit losses on loans

 

110

 

 

-

 

 

18

 

Net interest income after provision
for credit losses

 

5,070

 

 

5,156

 

 

4,332

 

 
NON-INTEREST INCOME
Service charges on deposit accounts

 

62

 

 

66

 

 

71

 

Gain on sale of loans

 

-

 

 

-

 

 

-

 

Gain (loss) on sale of other real estate owned

 

-

 

 

-

 

 

-

 

Gain (loss) on sale of securities

 

-

 

 

-

 

 

-

 

Other non-interest income

 

247

 

 

199

 

 

193

 

Total non-interest income

 

310

 

 

265

 

 

264

 

 
OPERATING EXPENSES
Salaries and benefits

 

1,649

 

 

1,567

 

 

1,146

 

Premises and fixed assets

 

313

 

 

242

 

 

191

 

Other

 

1,061

 

 

941

 

 

906

 

Total operating expenses

 

3,024

 

 

2,750

 

 

2,243

 

 
Income before income taxes

 

2,355

 

 

2,671

 

 

2,353

 

Income taxes

 

660

 

 

745

 

 

678

 

 
NET INCOME

$

1,695

 

$

1,926

 

$

1,675

 

 
EARNINGS PER SHARE
Basic earnings per share

$

1.15

 

$

1.31

 

$

1.14

 

Diluted earnings per share

$

1.11

 

$

1.27

 

$

1.09

 

Average common shares outstanding

 

1,479,862

 

 

1,474,754

 

 

1,469,258

 

Average common and equivalent
shares outstanding

 

1,525,267

 

 

1,520,935

 

 

1,532,163

 

 
PERFORMANCE MEASURES
Return on average assets

 

1.13

%

 

1.32

%

 

1.15

%

Return on average equity

 

19.20

%

 

24.23

%

 

18.22

%

Tax-equivalent net interest margin

 

3.65

%

 

3.61

%

 

3.17

%

Efficiency ratio

 

55.09

%

 

50.73

%

 

48.61

%

 

Contacts

Matthew B. Moseley

President & CEO

530.222.1460



Patrick E. Phelan

Chief Financial Officer

530.222.1460

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