Cornerstone Community Bancorp Reports Financial Results for the First Quarter Ended March 31, 2022

Rhea-AI Summary

Cornerstone Community Bancorp (OTC Pink: CRSB) reported a net income of $1,675,000 for Q1 2022, down from $2,046,000 in Q1 2021. Diluted EPS fell to $1.09 from $1.38. The decline in PPP fees impacted revenues, while net interest income increased to $4,350,000. Non-interest income dropped significantly to $264,000 from $877,000. Total deposits grew to $532.3 million, up from $485.3 million, and total loans decreased to $375.4 million. The return on average assets was 1.15%, and the efficiency ratio rose to 48.61%. Shareholders’ equity increased to $33.7 million.

Positive

• Net interest income rose to $4,350,000 from $4,217,000 year-over-year.
• Total deposits increased to $532.3 million, up from $485.3 million year-over-year.
• There were no nonperforming assets at March 31, 2022.
• Shareholders’ equity increased to $33.7 million, up from $31.4 million year-over-year.

Negative

• Net income declined to $1,675,000 from $2,046,000 year-over-year.
• Diluted earnings per share decreased to $1.09 from $1.38.
• Non-interest income significantly decreased to $264,000 from $877,000.
• The efficiency ratio increased to 48.61% from 35.61% year-over-year.

RED BLUFF, Calif.--(BUSINESS WIRE)-- Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the first quarter ended March 31, 2022.

The Company reported net income of $1,675,000 for the three months ended March 31, 2022 compared to net income of $2,046,000 for the same period last year. Diluted earnings per share were $1.09 for the three months ended March 31, 2022 compared to $1.38 for the same period last year. First quarter 2022 results were impacted by the decline in PPP (Paycheck Protection Program) fees and related interest income due to loan forgiveness.

The return on average assets for the three months ended March 31, 2022 was 1.15% and the return on average equity was 18.22%. The tax-equivalent net interest margin was 3.17% for the three months ended March 31, 2022 compared to 3.43% for the same period last year and the efficiency ratio was 48.61% for the three months ended March 31, 2022 compared to 35.61% for the same period last year.

President and CEO, Jeff Finck stated, “Even with the decline in PPP income, we were able to generate strong returns on average assets and average equity during the first quarter. Also during the first quarter, we opened our Anderson branch and we look forward to building relationships with the small businesses and individuals in that community in 2022.”

Net Interest Income

Net interest income increased to $4,350,000 for the quarter ended March 31, 2022 compared to $4,217,000 for the same quarter last year.

Provision for credit losses

Provision for credit losses were $18,000 for the quarter ended March 31, 2022 compared to $400,000 for the same quarter last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2022 was $264,000 compared to $877,000 for the quarter ended March 31, 2021.

Non-Interest Expense

Non-interest expense was $2,243,000 for the quarter ended March 31, 2022 compared to $1,814,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at March 31, 2022 were $375.4 million compared to $382.3 million at March 31, 2021.

Total deposits were $532.3 million at March 31, 2022 compared to total deposits of $485.3 million at March 31, 2021.

Credit Quality

The allowance for loan losses was $5,077,000, or 1.35% of loans, net of unearned income, at March 31, 2022, compared to $4,409,000, or 1.15% of loans, net of unearned income, at March 31, 2021. There were no nonperforming assets at March 31, 2022 and March 31, 2021.

Capital

At March 31, 2022, shareholders’ equity totaled $33.7 million compared to $31.4 million at March 31, 2021. At March 31, 2022, the Company's book value per common share was $22.93 compared to $25.31 at December 31, 2021 and $21.65 at March 31, 2021. During the first quarter of 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 ($5,995,000), compared to ($945,000) at December 31, 2021 and ($441,000) at March 31, 2021. Excluding AOCI, book value increased to $27.00 at March 31, 2022, compared to $25.96 at December 31, 2021 and $21.96 at March 31, 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 March 31, 2022, the Bank’s total risk-based capital ratio was 13.25% and its tier 1 capital to risk weighted assets ratio was 12.00%. 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)
	03/31/22			12/31/21			09/30/21			06/30/21			03/31/21
ASSETS
Cash and due from banks	$	4,175		$	4,552		$	4,765		$	5,450		$	5,417
Federal funds sold		121			121			2,600			2,256			5,761
Interest-bearing deposits		73,629			77,933			24,636			28,549			68,283
Investment securities		99,748			108,253			110,470			75,258			52,084
Loans held for sale		-			-			-			-			1,102
Loans, net of unearned income		375,369			387,374			388,532			390,748			382,253
Allowance for loan losses		(5,077	)		(5,059	)		(4,909	)		(4,509	)		(4,409	)
Loans, net		370,292			382,315			383,623			386,239			377,844
Premises and equipment, net		14,757			14,784			13,567			13,013			12,767
Other assets		16,930			15,622			14,863			14,972			13,974
Total assets	$	579,652		$	603,580		$	554,524		$	525,737		$	537,232
LIABILITIES
Deposits:
Demand noninterest-bearing	$	131,136		$	174,282		$	141,734		$	126,107		$	126,481
Demand interest-bearing		126,331			131,368			131,964			126,724			122,506
Money market and savings		196,653			163,946			150,149			150,086			163,232
Time deposits		78,167			78,111			76,291			70,386			73,111
Total deposits		532,287			547,707			500,138			473,303			485,330
Borrowings and other obligations		-			5,000			5,000			5,000			5,000
Subordinated debentures		11,726			11,720			11,715			11,709			11,703
Interest payable and other liabilities		1,899			2,134			2,151			1,933			3,776
Total liabilities		545,912			566,561			519,004			491,945			505,809
SHAREHOLDERS' EQUITY
Common stock		15,009			14,913			14,814			14,771			14,681
Retained Earnings		24,726			23,051			21,084			18,999			17,183
Accumulated other comprehensive income (loss)		(5,995	)		(945	)		(378	)		22			(441	)
Total shareholders' equity		33,740			37,019			35,520			33,792			31,423
Total liabilities and shareholders' equity	$	579,652		$	603,580		$	554,524		$	525,737		$	537,232
Total equity / total assets		5.82	%		6.13	%		6.41	%		6.43	%		5.85	%
Book value per share	$	22.93		$	25.31		$	24.37		$	23.22		$	21.65
Shares outstanding		1,471,591			1,462,591			1,457,591			1,455,091			1,451,091

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
	Three months ended
	03/31/22			12/31/21			03/31/21
INTEREST INCOME
Loans	$	4,348		$	4,759		$	4,451
Federal funds sold		-			1			2
Investment securities		371			385			162
Other		58			60			32
Total interest income		4,777			5,205			4,647
INTEREST EXPENSE
Deposits:
Interest-bearing demand		46			49			47
Money market and savings		117			109			87
Time deposits		107			107			124
Other		157			159			172
Total interest expense		427			424			430
Net interest income		4,350			4,781			4,217
Provision for credit losses		18			150			400
Net interest income after provision for credit losses		4,332			4,631			3,817
NON-INTEREST INCOME
Service charges on deposit accounts		71			65			58
Gain on sale of loans		-			-			700
Gain (loss) on sale of other real estate owned		-			-			-
Gain (loss) on sale of securities		-			-			(45	)
Other non-interest income		193			274			164
Total non-interest income		264			339			877
OPERATING EXPENSES
Salaries and benefits		1,146			1,175			679
Premises and fixed assets		191			166			179
Other		906			868			956
Total operating expenses		2,243			2,209			1,814
Income before income taxes		2,353			2,761			2,880
Income taxes		678			794			834
NET INCOME	$	1,675		$	1,967		$	2,046
EARNINGS PER SHARE
Basic earnings per share	$	1.14		$	1.35		$	1.41
Diluted earnings per share	$	1.09		$	1.29		$	1.38
Average common shares outstanding		1,469,258			1,459,667			1,447,763
Average common and equivalent shares outstanding		1,532,163			1,518,908			1,485,953
PERFORMANCE MEASURES
Return on average assets		1.15	%		1.41	%		1.56	%
Return on average equity		18.22	%		21.63	%		26.41	%
Tax-equivalent net interest margin		3.17	%		3.59	%		3.43	%
Efficiency ratio		48.61	%		43.14	%		35.61	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220421005996/en/

Jeffrey P. Finck

President & CEO

530.222.1460

Patrick E. Phelan

Chief Financial Officer

530.222.1460

Source: Cornerstone Community Bancorp

FAQ

What were Cornerstone Community Bancorp's earnings for Q1 2022?

Cornerstone Community Bancorp reported a net income of $1,675,000 for Q1 2022.

How did diluted earnings per share change for CRSB in Q1 2022?

Diluted earnings per share for CRSB fell to $1.09 in Q1 2022 from $1.38 in Q1 2021.

What was the total deposit amount for Cornerstone Community Bancorp as of March 31, 2022?

Total deposits for Cornerstone Community Bancorp were $532.3 million as of March 31, 2022.

What impact did PPP fees have on CRSB's financial results for Q1 2022?

CRSB experienced a decline in PPP fees and related interest income due to loan forgiveness, impacting overall revenue.