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 |
% |