Cornerstone Community Bancorp Reports Financial Results For the Third Quarter Ended September 30, 2022

Rhea-AI Summary

Cornerstone Community Bancorp (CRSB) reported third-quarter financial results, showing a net income of $1.94 million, down from $2.09 million year-over-year. Diluted earnings per share decreased to $1.27 from $1.38. The net interest income rose to $5.20 million, up from $4.76 million a year earlier. However, non-interest income fell sharply to $265,000 from $652,000. The efficiency ratio increased to 49.42%, while total loans reached $400.5 million, an increase from $388.5 million. Shareholders’ equity declined to $30.6 million from $35.5 million year-over-year.

Positive

• Net interest income increased to $5.20 million for Q3 2022, compared to $4.76 million last year.
• Total loans grew to $400.5 million from $388.5 million year-over-year.
• There were no nonperforming assets reported.

Negative

• Net income decreased to $1.94 million from $2.09 million year-over-year.
• Diluted earnings per share fell to $1.27 from $1.38 compared to last year.
• Non-interest income declined significantly from $652,000 to $265,000.
• Efficiency ratio rose to 49.42% from 38.37% year-over-year.
• Shareholders' equity decreased to $30.6 million from $35.5 million.

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

The Company reported net income of $1,936,000 for the three months ended September 30, 2022 compared to net income of $2,085,000 for the same period last year. Diluted earnings per share were $1.27 for the three months ended September 30, 2022 compared to $1.38 for the same period last year.

The return on average assets for the three months ended September 30, 2022 was 1.30% and the return on average equity was 23.11%. The tax-equivalent net interest margin was 3.60% for the three months ended September 30, 2022 compared to 3.66% for the same period last year and the efficiency ratio was 49.42% for the three months ended September 30, 2022 compared to 38.37% for the same period last year.

For the nine months ended September 30, 2022, the Company reported net income of $5,317,000 compared to net income of $5,948,000 for the same period last year. Diluted earnings per share were $3.48 for the nine months ended September 30, 2022 compared to $3.96 for the same period last year.

The return on average assets for the nine months ended September 30, 2022 was 1.21% and the return on average equity was 20.48%.

President and CEO, Matt Moseley stated, “We continue to produce strong returns on assets and equity. Credit quality remains strong with no nonperforming assets. Operating expenses have increased as the bank continues to hire and build its infrastructure for future growth.”

Net Interest Income

Net interest income increased to $5,196,000 for the quarter ended September 30, 2022 compared to $4,756,000 for the same quarter last year. For the nine months ended September 30, 2022, net interest income increased to $14,151,000 compared to $13,212,000 for the same period last year.

Provision for credit losses

Provision for credit losses were $40,000 for the quarter ended September 30, 2022 compared to $400,000 for the same quarter last year. For the nine months ended September 30, 2022, the Company recorded a $113,000 provision for credit losses compared to $900,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended September 30, 2022 was $265,000 compared to $652,000 for the quarter ended September 30, 2021. For the nine months ended September 30, 2022, non-interest income was $795,000 compared to $2,013,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $2,699,000 for the quarter ended September 30, 2022 compared to $2,075,000 for the same period last year. For the nine months ended September 30, 2022, non-interest expense was $7,368,000 compared to $5,965,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at September 30, 2022 were $400.5 million compared to $388.5 million at September 30, 2021.

Total deposits were $545.3 million at September 30, 2022 compared to total deposits of $500.1 million at September 30, 2021.

Credit Quality

The allowance for loan losses was $5,172,000, or 1.29% of loans, net of unearned income, at September 30, 2022, compared to $4,909,000, or 1.26% of loans, net of unearned income, at September 30, 2021. There were no nonperforming assets at September 30, 2022 and September 30, 2021.

Capital

At September 30, 2022, shareholders’ equity totaled $30.6 million compared to $35.5 million at September 30, 2021. At September 30, 2022, the Company's book value per common share was $20.81 compared to $24.37 at September 30, 2021. During the nine months ended September 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 $(12,763,000) at September 30, 2022, compared to $(378,000) at September 30, 2021. Excluding AOCI, book value increased to $29.50 at September 30, 2022, compared to $24.63 at September 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 September 30, 2022, the Bank’s total risk-based capital ratio was 13.39% and its tier 1 capital to risk weighted assets ratio was 12.18%. 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)
	09/30/22			06/30/22			03/31/22			12/31/21			09/30/21
ASSETS
Cash and due from banks	$	6,011		$	5,230		$	4,175		$	4,552		$	4,765
Federal funds sold		122			121			121			121			2,600
Interest-bearing deposits		57,618			48,277			73,629			77,933			24,636
Investment securities		95,511			102,692			99,748			108,253			110,470
Loans held for sale		-			-			-			-			-
Loans, net of unearned income		400,480			399,156			375,369			387,374			388,532
Allowance for loan losses		(5,172	)		(5,132	)		(5,077	)		(5,059	)		(4,909	)
Loans, net		395,308			394,024			370,292			382,315			383,623
Premises and equipment, net		14,671			14,691			14,757			14,784			13,567
Other assets		21,261			20,588			16,930			15,622			14,863
Total assets	$	590,502		$	585,623		$	579,652		$	603,580		$	554,524
LIABILITIES
Deposits:
Demand noninterest-bearing	$	129,236		$	130,249		$	131,136		$	174,282		$	141,734
Demand interest-bearing		138,630			131,623			126,331			131,368			131,964
Money market and savings		201,316			201,106			196,653			163,946			150,149
Time deposits		76,121			76,576			78,167			78,111			76,291
Total deposits		545,303			539,554			532,287			547,707			500,138
Borrowings and other obligations		-			-			-			5,000			5,000
Subordinated debentures		11,738			11,732			11,726			11,720			11,715
Interest payable and other liabilities		2,892			2,631			1,899			2,134			2,151
Total liabilities		559,933			553,917			545,912			566,561			519,004
SHAREHOLDERS' EQUITY
Common stock		14,964			15,079			15,009			14,913			14,814
Retained Earnings		28,368			26,432			24,726			23,051			21,084
Accumulated other comprehensive income (loss)		(12,763	)		(9,805	)		(5,995	)		(945	)		(378	)
Total shareholders' equity		30,569			31,706			33,740			37,019			35,520
Total liabilities and shareholders' equity	$	590,502		$	585,623		$	579,652		$	603,580		$	554,524
Total equity / total assets		5.18	%		5.41	%		5.82	%		6.13	%		6.41	%
Book value per share	$	20.81		$	21.51		$	22.93		$	25.31		$	24.37
Shares outstanding		1,469,091			1,474,091			1,471,591			1,462,591			1,457,591

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
	Three months ended										Nine months ended
	09/30/22			06/30/22			09/30/21				09/30/22			09/30/21
INTEREST INCOME
Loans	$	5,018		$	4,485		$	4,772			$	13,851		$	13,602
Federal funds sold		1			-			-				1			3
Investment securities		543			464			360				1,378			739
Other		354			146			35				558			120
Total interest income		5,916			5,095			5,167				15,788			14,464
INTEREST EXPENSE
Deposits:
Interest-bearing demand		130			64			46				240			138
Money market and savings		260			147			96				524			276
Time deposits		182			131			107				420			345
Other		148			148			162				453			493
Total interest expense		720			490			411				1,637			1,252
Net interest income		5,196			4,605			4,756				14,151			13,212
Provision for credit losses		40			55			400				113			900
Net interest income after provision for credit losses		5,156			4,550			4,356				14,038			12,312
NON-INTEREST INCOME
Service charges on deposit accounts		67			62			62				200			179
Gain on sale of loans		-			-			396				-			1,231
Gain (loss) on sale of other real estate owned		-			-			-				-			-
Gain (loss) on sale of securities		-			-			-				-			(45	)
Other non-interest income		198			204			194				595			648
Total non-interest income		265			266			652				795			2,013
OPERATING EXPENSES
Salaries and benefits		1,408			1,219			1,048				3,773			2,695
Premises and fixed assets		227			194			150				612			590
Other		1,064			1,013			877				2,983			2,680
Total operating expenses		2,699			2,426			2,075				7,368			5,965
Income before income taxes		2,722			2,390			2,933				7,465			8,360
Income taxes		786			684			848				2,148			2,412
NET INCOME	$	1,936		$	1,706		$	2,085			$	5,317		$	5,948
EARNINGS PER SHARE
Basic earnings per share	$	1.31		$	1.16		$	1.43			$	3.61		$	4.09
Diluted earnings per share	$	1.27		$	1.12		$	1.38			$	3.48		$	3.96
Average common shares outstanding		1,473,276			1,472,168			1,456,531				1,471,582			1,452,768
Average common and equivalent shares outstanding		1,523,830			1,529,540			1,512,738				1,528,628			1,503,150
PERFORMANCE MEASURES
Return on average assets		1.30	%		1.18	%		1.53	%			1.21	%		1.48	%
Return on average equity		23.11	%		20.33	%		23.52	%			20.48	%		23.98	%
Tax-equivalent net interest margin		3.60	%		3.32	%		3.66	%			3.37	%		3.48	%
Efficiency ratio		49.42	%		49.80	%		38.37	%			49.30	%		39.18	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221020006036/en/

Matthew B. Moseley

President & CEO

530.222.1460

Patrick E. Phelan

Chief Financial Officer

530.222.1460

Source: Cornerstone Community Bancorp

FAQ

What was Cornerstone Community Bancorp's net income for Q3 2022?

Cornerstone Community Bancorp reported a net income of $1.94 million for the third quarter of 2022.

How did diluted earnings per share change for CRSB in Q3 2022?

Diluted earnings per share for CRSB decreased to $1.27 in Q3 2022 from $1.38 in the same quarter last year.

What was the non-interest income for CRSB in Q3 2022?

Non-interest income for CRSB in Q3 2022 was $265,000, down from $652,000 in Q3 2021.

How much did CRSB's loans total at the end of Q3 2022?

At the end of Q3 2022, CRSB's total loans were $400.5 million.

What is the efficiency ratio for Cornerstone Community Bancorp in Q3 2022?

The efficiency ratio for Cornerstone Community Bancorp increased to 49.42% in Q3 2022.