Cornerstone Community Bancorp Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2020

Rhea-AI Summary

Cornerstone Community Bancorp (OTC Pink: CRSB) reported strong financial results for Q4 2020, with a net income of $2.06 million, up from $884,000 year-over-year. Diluted EPS rose to $1.36 from $0.58, showing robust performance. The bank's net interest income surged to $4.47 million driven by PPP fee recognition. For the year, net income reached $4.63 million, up from $3.45 million. However, a $1.6 million provision for credit losses was noted due to COVID-19 uncertainties. Assets and deposits showed significant growth, positioning the company favorably moving forward.

Positive

• Net income increased to $4.63 million for the year, up from $3.45 million.
• Diluted earnings per share improved to $3.04 from $2.27 for the year.
• Net interest income rose to $13.84 million for the year, compared to $10.97 million.
• Interest-bearing deposits increased by $74.2 million year-over-year.
• Shareholders' equity grew to $30.1 million from $25.8 million.

Negative

• Provision for credit losses was $1.6 million for the year, up from $340,000 the previous year.
• Tax-equivalent net interest margin decreased to 3.81% from 4.03% year-over-year.

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the fourth quarter ended December 31, 2020.

The Company reported net income of $2,059,000 for the three months ended December 31, 2020 compared to net income of $884,000 for the same period last year. Diluted earnings per share were $1.36 for the three months ended December 31, 2020 compared to $0.58 for the same period last year.

The return on average assets for the three months ended December 31, 2020 was 1.68% and the return on average equity was 27.70%. The tax-equivalent net interest margin was 3.81% for the three months ended December 31, 2020 compared to 4.03% for the same period last year and the efficiency ratio declined to 39.69% for the three months ended December 31, 2020 compared to 58.78% for the same period last year.

For the year ended December 31, 2020, the Company reported net income of $4,626,000 compared to net income of $3,452,000 for the same period last year. Diluted earnings per share were $3.04 for the year ended December 31, 2020 compared to $2.27 for the same period last year.

The return on average assets for the year ended December 31, 2020 was 1.09% and the return on average equity was 16.53%.

Net income for the year ended December 31, 2020 reflects a $1.6 million provision for credit losses related to the economic uncertainties of the COVID-19 pandemic.

President and CEO, Jeff Finck stated, “We had a record quarter and year. During the year, our team was busy helping both new and existing customers through the Paycheck Protection Program (PPP) application process. During the fourth quarter, the team was helping them navigate the forgiveness process. These efforts served to strengthen relationships with existing customers and attract new ones.”

Net Interest Income

Net interest income increased to $4,465,000 for the quarter ended December 31, 2020 compared to $2,834,000 for the same quarter last year. Fourth quarter 2020 net interest income was driven by accelerated PPP fee recognition from borrower forgiveness processing. For the year ended December 31, 2020, net interest income increased to $13,836,000 compared to $10,971,000 for the same period last year.

The Company's tax-equivalent net interest margin was 3.81% for the fourth quarter of 2020 and 3.45% for the year ended December 31, 2020.

Provision for credit losses

There was no provision for credit losses recorded for the quarter ended December 31, 2020 compared to $100,000 for the same quarter last year. For the year ended December 31, 2020, the Company recorded a $1,600,000 provision for credit losses compared to $340,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended December 31, 2020 was $345,000 compared to $201,000 for the quarter ended December 31, 2019. For the year ended December 31, 2020, non-interest income was $1,239,000 compared to $1,206,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,909,000 for the quarter ended December 31, 2020 compared to $1,784,000 for the same period last year. For the year ended December 31, 2020, non-interest expense was $7,156,000 compared to $7,071,000 for the same period last year.

Balance Sheet

Interest-bearing deposits increased $74.2 million at December 31, 2020 compared to December 31, 2019. Investment securities increased $37.0 million at December 31, 2020 compared to December 31, 2019.

Total loans, net of unearned income at December 31, 2020 were $332.2 million compared to $241.7 million at December 31, 2019.

Total deposits were $433.3 million at December 31, 2020 compared to total deposits of $253.4 million at December 31, 2019.

Credit Quality

The allowance for loan losses was $4,009,000, or 1.21% of loans, net of unearned income at December 31, 2020, compared to $2,409,000, or 1.00% of loans, net of unearned income at December 31, 2019. There were no nonperforming assets at December 31, 2020 and December 31, 2019.

Capital

At December 31, 2020, shareholders’ equity totaled $30.1 million compared to $25.8 million at December 31, 2019. Book value was $20.87 per share at December 31, 2020 compared to $17.79 per share at December 31, 2019.

During the fourth quarter of 2020, the Company repurchased 49,800 shares of its common stock for a total of $900,368.

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 2020), 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)
		12/31/20				09/30/20				06/30/20				03/31/20				12/31/19
ASSETS
Cash and due from banks		$	3,811			$	5,455			$	6,350			$	4,965			$	6,038
Federal funds sold			14,166				5,045				10,402				17,385				4,575
Interest-bearing deposits			77,045				62,110				73,310				18,928				2,825
Investment securities			50,336				50,699				16,173				13,144				13,355
Loans held for sale			-				-				-				-				-
Loans, net of unearned income			332,176				342,416				333,620				250,353				241,662
Allowance for loan losses			(4,009	)			(4,009	)			(4,009	)			(3,859	)			(2,409	)
Loans, net			328,167				338,407				329,611				246,494				239,253
Premises and equipment, net			11,581				10,992				11,095				11,180				11,216
Other assets			12,255				12,577				11,882				11,330				11,093
Total assets		$	497,361			$	485,285			$	458,823			$	323,426			$	288,355
LIABILITIES
Deposits:
Demand noninterest-bearing		$	108,147			$	103,824			$	96,395			$	58,357			$	52,352
Demand interest-bearing			108,097				104,819				90,633				51,608				52,058
Money market and savings			146,655				87,035				79,550				77,273				74,560
Time deposits of less than $100,000			15,418				21,103				22,925				26,503				18,395
Time deposits of $100,000 or more			55,021				54,695				51,919				54,274				56,016
Total deposits			433,338				371,476				341,422				268,015				253,381
Borrowings and other obligations			15,000				78,136				83,136				23,000				3,000
Subordinated debentures			16,645				4,923				4,920				4,917				4,914
Interest payable and other liabilities			2,294				1,854				1,765				1,382				1,235
Total liabilities			467,277				456,389				431,243				297,314				262,530
SHAREHOLDERS' EQUITY
Common stock			14,584				15,462				15,440				15,336				15,264
Retained Earnings			15,136				13,077				11,841				10,557				10,510
Accumulated other comprehensive income (loss)			364				357				299				219				51
Total shareholders' equity			30,084				28,896				27,580				26,112				25,825
Total liabilities and shareholders' equity		$	497,361			$	485,285			$	458,823			$	323,426			$	288,355
Total equity / total assets			6.05	%			5.95	%			6.01	%			8.07	%			8.96	%
Book value per share		$	20.87			$	19.38			$	18.50			$	17.63			$	17.79
Shares outstanding			1,441,241				1,491,041				1,491,041				1,481,041				1,452,041

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
		Three months ended												Year ended
		12/31/20				09/30/20				12/31/19				12/31/20				12/31/19
INTEREST INCOME
Loans		$	4,761			$	3,695			$	3,349			$	15,424			$	13,065
Federal funds sold			2				1				40				24				175
Investment securities			162				161				65				495				238
Other			51				33				130				174				444
Total interest income			4,976				3,890				3,584				16,117				13,922
INTEREST EXPENSE
Deposits:
Interest-bearing demand			55				51				50				181				139
Money market and savings			80				79				241				464				906
Time deposits			155				198				351				944				1,465
Other			221				186				108				692				441
Total interest expense			511				514				750				2,281				2,951
Net interest income			4,465				3,376				2,834				13,836				10,971
Provision for credit losses			-				-				100				1,600				340
Net interest income after provision
for credit losses			4,465				3,376				2,734				12,236				10,631
NON-INTEREST INCOME
Service charges on deposit accounts			55				49				61				222				255
Gain on sale of loans			61				-				-				247				417
Gain (loss) on sale of other real estate owned			-				-				-				-				-
Gain (loss) on sale of securities			-				91				-				91				-
Other non-interest income			229				156				140				679				534
Total non-interest income			345				296				201				1,239				1,206
OPERATING EXPENSES
Salaries and benefits			970				979				887				3,280				3,636
Premises and fixed assets			182				200				239				891				859
Other			757				760				658				2,985				2,576
Total operating expenses			1,909				1,939				1,784				7,156				7,071
Income before income taxes			2,901				1,733				1,151				6,319				4,766
Income taxes			842				497				267				1,693				1,314
NET INCOME		$	2,059			$	1,236			$	884			$	4,626			$	3,452
EARNINGS PER SHARE
Basic earnings per share		$	1.39			$	0.83			$	0.61			$	3.12			$	2.41
Diluted earnings per share		$	1.36			$	0.81			$	0.58			$	3.04			$	2.27
Average common shares outstanding			1,477,361				1,491,041				1,442,639				1,483,575				1,435,255
Average common and equivalent
shares outstanding			1,511,365				1,522,872				1,527,238				1,522,714				1,521,093
PERFORMANCE MEASURES
Return on average assets			1.68	%			1.05	%			1.16	%			1.09	%			1.22	%
Return on average equity			27.70	%			17.36	%			13.87	%			16.53	%			14.33	%
Tax-equivalent net interest margin			3.81	%			2.99	%			4.03	%			3.45	%			4.21	%
Efficiency ratio			39.69	%			52.81	%			58.78	%			47.47	%			58.07	%

 

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FAQ

What were Cornerstone Community Bancorp's Q4 2020 earnings results?

Cornerstone Community Bancorp reported a net income of $2.06 million for Q4 2020, with diluted earnings per share of $1.36.

How did Cornerstone Community Bancorp perform in 2020 compared to 2019?

In 2020, Cornerstone Community Bancorp's net income was $4.63 million, up from $3.45 million in 2019.

What factors contributed to the increase in net interest income for Cornerstone Community Bancorp?

The increase in net interest income was driven by accelerated PPP fee recognition from borrower forgiveness processing.

How much was the provision for credit losses in 2020 for Cornerstone Community Bancorp?

The provision for credit losses was $1.6 million in 2020, compared to $340,000 in 2019.

What was the return on average assets for Cornerstone Community Bancorp in 2020?

The return on average assets for 2020 was 1.09%.