Cornerstone Community Bancorp Reports Financial Results For the First Quarter Ended March 31, 2021

Rhea-AI Summary

Cornerstone Community Bancorp (OTC Pink: CRSB) reported impressive financial results for Q1 2021, with net income surging to $2,046,000 from $47,000 year-over-year. Diluted earnings per share improved to $1.38, up from $0.03. The return on average assets reached 1.56%, while return on average equity was 26.41%. Total loans rose to $382.3 million and deposits increased to $485.3 million, compared to $250.4 million and $268.0 million a year ago. The efficiency ratio also demonstrated improvement at 35.61% compared to 58.65% last year.

Positive

• Net income increased to $2,046,000 from $47,000 YoY.
• Diluted EPS rose to $1.38 from $0.03 YoY.
• Total loans grew to $382.3 million from $250.4 million YoY.
• Total deposits increased to $485.3 million from $268.0 million YoY.
• Efficiency ratio improved to 35.61% from 58.65% YoY.

Negative

• Net interest margin decreased to 3.43% from 4.09% YoY.
• Provision for credit losses was still significant at $400,000.

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the first quarter ended March 31, 2021.

The Company reported net income of $2,046,000 for the three months ended March 31, 2021 compared to net income of $47,000 for the same period last year. Diluted earnings per share were $1.38 for the three months ended March 31, 2021 compared to $0.03 for the same period last year.

The return on average assets for the three months ended March 31, 2021 was 1.56% and the return on average equity was 26.41%. The tax-equivalent net interest margin was 3.43% for the three months ended March 31, 2021 compared to 4.09% for the same period last year and the efficiency ratio declined to 35.61% for the three months ended March 31, 2021 compared to 58.65% for the same period last year.

President and CEO, Jeff Finck stated, “We had a solid performance in the first quarter. Our team continued to help both new and existing customers through the Paycheck Protection Program (PPP) application and forgiveness process.”

Net Interest Income

Net interest income increased to $4,217,000 for the quarter ended March 31, 2021 compared to $2,842,000 for the same quarter last year. First quarter 2021 net interest income was driven by accelerated PPP fee recognition from borrower forgiveness processing.

Provision for credit losses

Provision for credit losses were $400,000 for the quarter ended March 31, 2021 compared to $1,450,000 for the same quarter last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2021 was $877,000 compared to $394,000 for the quarter ended March 31, 2020.

Non-Interest Expense

Non-interest expense was $1,814,000 for the quarter ended March 31, 2021 compared to $1,898,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income at March 31, 2021 were $382.3 million compared to $250.4 million at March 31, 2020.

Total deposits were $485.3 million at March 31, 2021 compared to total deposits of $268.0 million at March 31, 2020.

Credit Quality

The allowance for loan losses was $4,409,000, or 1.15% of loans, net of unearned income at March 31, 2021, compared to $3,859,000, or 1.54% of loans, net of unearned income at March 31, 2020. There were no nonperforming assets at March 31, 2021 and March 31, 2020.

Capital

At March 31, 2021, shareholders’ equity totaled $31.4 million compared to $26.1 million at March 31, 2020. Book value was $21.65 per share at March 31, 2021 compared to $17.63 per share at March 31, 2020.

During the fourth quarter of 2021, the Company repurchased 500 shares of its common stock for a total of $9,500.

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 2021), 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)
	03/31/21			12/31/20			09/30/20			06/30/20			03/31/20
ASSETS
Cash and due from banks	$	5,417		$	3,811		$	5,455		$	6,350		$	4,965
Federal funds sold		5,761			14,166			5,045			10,402			17,385
Interest-bearing deposits		68,283			77,045			62,110			73,310			18,928
Investment securities		52,084			50,336			50,699			16,173			13,144
Loans held for sale		1,102			-			-			-			-
Loans, net of unearned income		382,253			332,176			342,416			333,620			250,353
Allowance for loan losses		(4,409	)		(4,009	)		(4,009	)		(4,009	)		(3,859	)
Loans, net		377,844			328,167			338,407			329,611			246,494
Premises and equipment, net		12,767			11,581			10,992			11,095			11,180
Other assets		13,974			12,724			12,577			11,882			11,330
Total assets	$	537,232		$	497,830		$	485,285		$	458,823		$	323,426
LIABILITIES
Deposits:
Demand noninterest-bearing	$	126,481		$	108,147		$	103,824		$	96,395		$	58,357
Demand interest-bearing		122,506			108,097			104,819			90,633			51,608
Money market and savings		163,232			146,655			87,035			79,550			77,273
Time deposits of less than $100,000		15,812			15,418			21,103			22,925			26,503
Time deposits of $100,000 or more		57,299			55,021			54,695			51,919			54,274
Total deposits		485,330			433,338			371,476			341,422			268,015
Borrowings and other obligations		5,000			15,000			78,136			83,136			23,000
Subordinated debentures		11,703			16,645			4,923			4,920			4,917
Interest payable and other liabilities		3,776			2,763			1,854			1,765			1,382
Total liabilities		505,809			467,746			456,389			431,243			297,314
SHAREHOLDERS' EQUITY
Common stock		14,681			14,584			15,462			15,440			15,336
Retained Earnings		17,183			15,136			13,077			11,841			10,557
Accumulated other comprehensive income (loss)		(441	)		364			357			299			219
Total shareholders' equity		31,423			30,084			28,896			27,580			26,112
Total liabilities and shareholders' equity	$	537,232		$	497,830		$	485,285		$	458,823		$	323,426
Total equity / total assets		5.85	%		6.04	%		5.95	%		6.01	%		8.07	%
Book value per share	$	21.65		$	20.87		$	19.38		$	18.50		$	17.63
Shares outstanding		1,451,091			1,441,241			1,491,041			1,491,041			1,481,041

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
	Three months ended
	03/31/21			12/31/20			03/31/20
INTEREST INCOME
Loans	$	4,451		$	4,761		$	3,356
Federal funds sold		2			2			17
Investment securities		162			162			90
Other		32			51			45
Total interest income		4,647			4,976			3,508
INTEREST EXPENSE
Deposits:
Interest-bearing demand		47			55			35
Money market and savings		87			80			186
Time deposits		124			155			331
Other		172			221			114
Total interest expense		430			511			666
Net interest income		4,217			4,465			2,842
Provision for credit losses		400			-			1,450
Net interest income after provision
for credit losses		3,817			4,465			1,392
NON-INTEREST INCOME
Service charges on deposit accounts		58			55			72
Gain on sale of loans		700			61			186
Gain (loss) on sale of other real estate owned		-			-			-
Gain (loss) on sale of securities		(45	)		-			-
Other non-interest income		164			229			136
Total non-interest income		877			345			394
OPERATING EXPENSES
Salaries and benefits		679			970			939
Premises and fixed assets		179			182			252
Other		956			757			707
Total operating expenses		1,814			1,909			1,898
Income before income taxes		2,880			2,901			(112	)
Income taxes		834			842			(159	)
NET INCOME	$	2,046		$	2,059		$	47
EARNINGS PER SHARE
Basic earnings per share	$	1.41		$	1.39		$	0.03
Diluted earnings per share	$	1.38		$	1.36		$	0.03
Average common shares outstanding		1,447,763			1,477,361			1,480,668
Average common and equivalent
shares outstanding		1,485,953			1,511,365			1,532,685
PERFORMANCE MEASURES
Return on average assets		1.56	%		1.68	%		0.06	%
Return on average equity		26.41	%		27.70	%		0.71	%
Tax-equivalent net interest margin		3.43	%		3.81	%		4.09	%
Efficiency ratio		35.61	%		39.69	%		58.65	%

 

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FAQ

What were the earnings results for CRSB in Q1 2021?

CRSB reported net income of $2,046,000 and diluted EPS of $1.38.

How did CRSB's net interest income change in Q1 2021?

Net interest income increased to $4,217,000 compared to $2,842,000 in Q1 2020.

What is the future outlook for CRSB based on Q1 2021 results?

While CRSB showed strong growth in income and loans, the decrease in net interest margin is a factor to watch.