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Cornerstone Community Bancorp Reports Financial Results For the Second Quarter Ended June 30, 2022

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RED BLUFF, Calif., July 21, 2022--(BUSINESS WIRE)--Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the second quarter ended June 30, 2022.

The Company reported net income of $1,706,000 for the three months ended June 30, 2022 compared to net income of $1,816,000 for the same period last year. Diluted earnings per share were $1.12 for the three months ended June 30, 2022 compared to $1.20 for the same period last year.

The return on average assets for the three months ended June 30, 2022 was 1.18% and the return on average equity was 20.33%. The tax-equivalent net interest margin was 3.32% for the three months ended June 30, 2022 compared to 3.33% for the same period last year and the efficiency ratio was 49.80% for the three months ended June 30, 2022 compared to 42.68% for the same period last year.

For the six months ended June 30, 2022, the Company reported record net income of $3,381,000 compared to net income of $3,863,000 for the same period last year. Diluted earnings per share were $2.21 for the six months ended June 30, 2022 compared to $2.58 for the same period last year.

The return on average assets for the six months ended June 30, 2022 was 1.17% and the return on average equity was 19.23%.

President and CEO, Matt Moseley stated, "We produced solid returns in the second quarter even with the added expenses involved with opening our Anderson branch earlier this year and adding staff in some key positions in order to create the infrastructure needed for the bank’s continued growth."

Net Interest Income

Net interest income increased to $4,605,000 for the quarter ended June 30, 2022 compared to $4,239,000 for the same quarter last year. For the six months ended June 30, 2022, net interest income increased to $8,955,000 compared to $8,456,000 for the same period last year.

Provision for credit losses

Provision for credit losses were $55,000 for the quarter ended June 30, 2022 compared to $100,000 for the same quarter last year. For the six months ended June 30, 2022, the Company recorded a $73,000 provision for credit losses compared to $500,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended June 30, 2022 was $266,000 compared to $377,000 for the quarter ended June 30, 2021. For the six months ended June 30, 2022, non-interest income was $530,000 compared to $1,254,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $2,426,000 for the quarter ended June 30, 2022 compared to $1,970,000 for the same period last year. For the six months ended June 30, 2022, non-interest expense was $4,669,000 compared to $3,783,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at June 30, 2022 were $399.2 million compared to $390.7 million at June 30, 2021.

Total deposits were $539.6 million at June 30, 2022 compared to total deposits of $473.3 million at June 30, 2021.

Credit Quality

The allowance for loan losses was $5,132,000, or 1.29% of loans, net of unearned income, at June 30, 2022, compared to $4,509,000, or 1.15% of loans, net of unearned income, at June 30, 2021. There were no nonperforming assets at June 30, 2022 and June 30, 2021.

Capital

At June 30, 2022, shareholders’ equity totaled $31.7 million compared to $33.8 million at June 30, 2021. At June 30, 2022, the Company's book value per common share was $21.51 compared to $22.93 at March 31, 2022 and $23.22 at June 30, 2021. During the six months ended June 30, 2022, increasing interest rates resulted in a decline in the fair value of available for sale investment securities. This impact is reflected in the decline in accumulated other comprehensive income (AOCI) to ($9,805,000) at June 30, 2022, compared to ($5,995,000) at March 31, 2022 and $22,000 at June 30, 2021. Excluding AOCI, book value increased to $28.16 at June 30, 2022, compared to $27.00 at March 31, 2022 and $23.21 at June 30, 2021.

AOCI has no effect on Cornerstone Community Bank’s (the Bank) regulatory capital ratios as the Bank opted to exclude it from regulatory capital calculations. At June 30, 2022, the Bank’s total risk-based capital ratio was 13.00% and its tier 1 capital to risk weighted assets ratio was 11.80%. 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)

06/30/22

03/31/22

12/31/21

09/30/21

06/30/21

ASSETS

Cash and due from banks

$

5,230

$

4,175

$

4,552

$

4,765

$

5,450

Federal funds sold

121

121

121

2,600

2,256

Interest-bearing deposits

48,277

73,629

77,933

24,636

28,549

Investment securities

102,692

99,748

108,253

110,470

75,258

Loans held for sale

-

-

-

-

-

Loans, net of unearned income

399,156

375,369

387,374

388,532

390,748

Allowance for loan losses

(5,132

)

(5,077

)

(5,059

)

(4,909

)

(4,509

)

Loans, net

394,024

370,292

382,315

383,623

386,239

Premises and equipment, net

14,691

14,757

14,784

13,567

13,013

Other assets

20,588

16,930

15,622

14,863

14,972

Total assets

$

585,623

$

579,652

$

603,580

$

554,524

$

525,737

LIABILITIES

Deposits:

Demand noninterest-bearing

$

130,249

$

131,136

$

174,282

$

141,734

$

126,107

Demand interest-bearing

131,623

126,331

131,368

131,964

126,724

Money market and savings

201,106

196,653

163,946

150,149

150,086

Time deposits

76,576

78,167

78,111

76,291

70,386

Total deposits

539,554

532,287

547,707

500,138

473,303

Borrowings and other obligations

-

-

5,000

5,000

5,000

Subordinated debentures

11,732

11,726

11,720

11,715

11,709

Interest payable and other liabilities

2,631

1,899

2,134

2,151

1,933

Total liabilities

553,917

545,912

566,561

519,004

491,945

SHAREHOLDERS' EQUITY

Common stock

15,079

15,009

14,913

14,814

14,771

Retained Earnings

26,432

24,726

23,051

21,084

18,999

Accumulated other comprehensive income (loss)

(9,805

)

(5,995

)

(945

)

(378

)

22

Total shareholders' equity

31,706

33,740

37,019

35,520

33,792

Total liabilities and shareholders' equity

$

585,623

$

579,652

$

603,580

$

554,524

$

525,737

Total equity / total assets

5.41

%

5.82

%

6.13

%

6.41

%

6.43

%

Book value per share

$

21.51

$

22.93

$

25.31

$

24.37

$

23.22

Shares outstanding

1,474,091

1,471,591

1,462,591

1,457,591

1,455,091

CORNERSTONE COMMUNITY BANCORP

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in Thousands)

Three months ended

Six months ended

06/30/22

03/31/22

06/30/21

06/30/22

06/30/21

INTEREST INCOME

Loans

$

4,485

$

4,348

$

4,379

$

8,833

$

8,830

Federal funds sold

-

-

1

-

3

Investment securities

464

371

217

835

379

Other

146

58

53

204

85

Total interest income

5,095

4,777

4,650

9,872

9,297

INTEREST EXPENSE

Deposits:

Interest-bearing demand

64

46

45

110

92

Money market and savings

147

117

93

264

180

Time deposits

131

107

114

238

238

Other

148

157

159

305

331

Total interest expense

490

427

411

917

841

Net interest income

4,605

4,350

4,239

8,955

8,456

Provision for credit losses

55

18

100

73

500

Net interest income after provision for credit losses

4,550

4,332

4,139

8,882

7,956

NON-INTEREST INCOME

Service charges on deposit accounts

62

71

59

133

117

Gain on sale of loans

-

-

135

-

835

Gain (loss) on sale of other real estate owned

-

-

-

-

-

Gain (loss) on sale of securities

-

-

-

-

(45

)

Other non-interest income

204

193

183

397

347

Total non-interest income

266

264

377

530

1,254

OPERATING EXPENSES

Salaries and benefits

1,219

1,146

968

2,365

1,647

Premises and fixed assets

194

191

154

385

332

Other

1,013

906

848

1,919

1,804

Total operating expenses

2,426

2,243

1,970

4,669

3,783

Income before income taxes

2,390

2,353

2,546

4,743

5,427

Income taxes

684

678

730

1,362

1,564

NET INCOME

$

1,706

$

1,675

$

1,816

$

3,381

$

3,863

EARNINGS PER SHARE

Basic earnings per share

$

1.16

$

1.14

$

1.25

$

2.30

$

2.66

Diluted earnings per share

$

1.12

$

1.09

$

1.20

$

2.21

$

2.58

Average common shares outstanding

1,472,168

1,469,258

1,453,915

1,470,721

1,450,856

Average common and equivalent shares outstanding

1,529,540

1,532,163

1,510,621

1,530,890

1,497,565

PERFORMANCE MEASURES

Return on average assets

1.18

%

1.15

%

1.35

%

1.17

%

1.45

%

Return on average equity

20.33

%

18.22

%

22.17

%

19.23

%

24.24

%

Tax-equivalent net interest margin

3.32

%

3.17

%

3.33

%

3.25

%

3.38

%

Efficiency ratio

49.80

%

48.61

%

42.68

%

49.23

%

38.96

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20220721005944/en/

Contacts

Matthew B. Moseley
President & CEO
530.222.1460

Patrick E. Phelan
Chief Financial Officer
530.222.1460