Cornerstone Community Bancorp Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2020
01/21/2021 - 06:42 PM
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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