News Column

Cornerstone Community Bank Reports Financial Results for the First Quarter Ended March 31, 2014

May 1, 2014

RED BLUFF, Calif.--(BUSINESS WIRE)-- Cornerstone Community Bank, (OTCBB: CRSB), announced today its financial results for the first quarter ended March 31, 2014.

The Bank reported net income of $131,000 for the three months ended March 31, 2014 compared to net income of $240,000 for the same period last year. The Bank became fully taxable in the first quarter of 2014 which was the primary reason for the decline in net income. Diluted earnings per share for the three months ended March 31, 2014 were $0.10 compared to $0.19 for the same period last year.

The return on average assets for the three months ended March 31, 2014 was 0.41% compared to 0.84% for the same period last year. The return on average equity was 4.11% for the three months ended March 31, 2014 compared to 8.02% for the same period last year.

President and CEO, Jeff Finck, stated, “The momentum generated in 2013 continued into the first quarter of 2014 with 25% growth in total loans and 10% growth in total assets when compared to March 31, 2013.”

Net Interest Income

Net interest income for the three months ended March 31, 2014 was $1,319,000 compared to $1,207,000 for the same period last year. The net interest margin was 4.42% compared to 4.49% for the same period last year.

Provision for Credit Losses

The provision for credit losses for the three months ended March 31, 2014 was $24,000 compared to $85,000 for the same period last year.

Non-Interest Income

The Bank’s non-interest income for the quarter ended March 31, 2014 was $110,000 compared to $139,000 for the quarter ended March 31, 2013.

Non-Interest Expense

Non-interest expense was $1,192,000 for the quarter ended March 31, 2014 compared to $1,021,000 for the quarter ended March 31, 2013.

Provision for Income Tax Expense

The provision for income tax expense for the three months ended March 31, 2014 was $82,000. There was no provision for income tax expense for the three months ended March 31, 2013. The Bank became fully taxable in the first quarter of 2014.

Balance Sheet

The Bank had total assets at March 31, 2014 of $126.8 million, compared to $115.3 million at March 31, 2013, representing growth of $11.5 million, or 10%.

Total loans outstanding, including loans held for sale, at March 31, 2014, were $103.1 million compared to $82.4 million at March 31, 2013, representing an increase of $20.7 million, or 25%.

Total deposits were $111.6 million at March 31, 2014 compared to total deposits of $103.0 million at March 31, 2013, representing an increase of $8.6 million, or 8.4%.

Credit Quality

The allowance for loan losses was $1,415,000, or 1.42% of loans, net of unearned income at March 31, 2014, compared to $1,411,000, or 1.75% of loans, net of unearned income at March 31, 2013. Nonperforming assets at March 31, 2014 were $202,000 compared to $175,000 at March 31, 2013. The bank recognized $8,000 in net loan charge-offs during the quarter ended March 31, 2014.

Capital Adequacy

At March 31, 2014, shareholders’ equity totaled $12.8 million compared to $12.1 million at March 31, 2013. At March 31, 2014, the total risk-based capital ratio, tier one capital ratio, and leverage ratio was 12.60%, 11.35% and 9.81%, respectively, all exceeding the regulatory standards for “well-capitalized” institutions of 10.00%, 6.00% and 5.00%, respectively.

About Cornerstone Community Bank

Cornerstone Community Bank is a California state-chartered bank with its headquarters office in Red Bluff and a branch office in Redding. The Bank provides commercial banking services, including a wide variety of deposit products and real estate, construction, commercial and consumer loans to small businesses, professionals and individuals. Additional information about the Bank is available on its website at www.bankcornerstone.com

Forward-Looking Statements

This press release contains forward-looking statements.These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of the management of Cornerstone Community Bank and on information available to management at the time these statements were made.There are a number of factors, many of which are beyond Cornerstone Community Bank’s control, which could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements.Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressures among depository and other financial institutions may increase significantly; (2) revenues may be lower than expected; (3) changes in the interest rate environment may reduce interest margins; (4) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; (5) legislative or regulatory changes, including changes in accounting standards and tax laws, may adversely affect the businesses in which Cornerstone Community Bank is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than Cornerstone Community Bank; and (7) adverse changes may occur in the securities markets or with respect to inflation.Forward-looking statements speak only as of the date they are made.Except as required by law, Cornerstone Community Bank does not undertake to update forward-looking statements to reflect subsequent circumstances or events.

 
CORNERSTONE COMMUNITY BANK
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
                   
 
03/31/14     12/31/13     09/30/13     06/30/13     03/31/13
 
ASSETS
Cash and due from banks $ 3,203 $ 2,025 $ 2,717 $ 2,950 $ 4,009
Federal funds sold - - - - -
Interest-bearing deposits 533 875 6,296 2,796 1,241
Investment securities 15,250 21,131 21,866 23,104 25,745
Loans held for sale 3,134 2,726 2,622 2,603 1,961
Loans, net of unearned income 99,960 90,173 84,751 82,381 80,467
Allowance for loan losses   (1,415 )       (1,399 )       (1,397 )       (1,450 )       (1,411 )
Loans, net 98,545 88,774 83,354 80,931 79,056
Premises and equipment, net 1,049 1,109 1,015 1,041 1,100
Other assets   5,134         5,234         4,900         4,854         2,230  
Total assets $ 126,848       $ 121,874       $ 122,770       $ 118,279       $ 115,342  
 
LIABILITIES
Deposits:
Demand noninterest-bearing $ 19,198 $ 15,984 $ 20,377 $ 19,892 $ 18,260
Demand interest-bearing 19,404 17,521 18,220 16,110 14,318
Money market and savings 41,072 42,814 41,044 40,123 44,996
Time deposits of less than $100,000 13,298 11,045 11,118 11,236 8,218
Time deposits of $100,000 or more   18,579         18,736         19,416         18,578         17,241  
Total deposits 111,551 106,100 110,175 105,939 103,033
Other borrowings 2,000 3,000 - - -
Other liabilities   464         300         391         311         226  
Total liabilities   114,015         109,400         110,566         106,250         103,259  
 
SHAREHOLDERS' EQUITY
Common stock 12,057 12,057 11,959 11,959 11,959
Additional paid-in capital 903 877 886 859 830
Accumulated deficit (234 ) (365 ) (623 ) (917 ) (1,199 )
Accumulated other comprehensive income (loss)   107         (95 )       (18 )       128         493  
Total shareholders' equity   12,833         12,474         12,204         12,029         12,083  
Total liabilities and shareholders' equity $ 126,848       $ 121,874       $ 122,770       $ 118,279       $ 115,342  
 
CAPITAL ADEQUACY
Tier I leverage ratio 9.81 % 10.00 % 9.97 % 10.06 % 10.13 %
Tier I risk-based capital ratio 11.35 % 12.02 % 12.36 % 12.45 % 12.81 %
Total risk-based capital ratio 12.60 % 13.27 % 13.61 % 13.71 % 14.06 %
Total equity / total assets 10.12 % 10.24 % 9.94 % 10.17 % 10.48 %
Book value per share $ 10.59 $ 10.29 $ 10.17 $ 10.02 $ 10.07
 
 
CORNERSTONE COMMUNITY BANK
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
           
 
Three months ended
03/31/14     12/31/13     03/31/13
 
INTEREST INCOME
Loans $ 1,275 $ 1,200 $ 1,184
Federal funds sold - - -
Investment securities 155 161 170
Other   10         10         2  
Total interest income   1,440         1,371         1,356  
 
INTEREST EXPENSE
Deposits:
Interest-bearing demand 5 6 6
Money market and savings 58 63 74
Time deposits 57 65 69
Other   1         -         -  
Total interest expense   121         134         149  
 
Net interest income 1,319 1,237 1,207
Provision for credit losses   24         -         85  

Net interest income after provision for credit losses

  1,295         1,237         1,122  
 
NON-INTEREST INCOME
Service charges on deposit accounts 19 22 27
Gain on sale of SBA loans - - -
Gain on sale of securities (6 ) - -
Other non-interest income   97         132         112  
Total non-interest income   110         154         139  
 
OPERATING EXPENSES
Salaries and benefits 638 605 554
Premises and fixed assets 139 139 126
Other   415         379         341  
Total operating expenses   1,192         1,123         1,021  
 
Income before income taxes 213 268 240
Income taxes 82 12 -
             
NET INCOME $ 131       $ 256       $ 240  
 
EARNINGS PER SHARE
Basic earnings per share $ 0.11       $ 0.21       $ 0.20  
Diluted earnings per share $ 0.10       $ 0.20       $ 0.19  
Average common shares outstanding   1,212,000         1,206,130         1,200,000  

Average common and equivalent shares outstanding

  1,316,906         1,307,931         1,292,937  
 
PERFORMANCE MEASURES
Return on average assets 0.41 % 0.82 % 0.84 %
Return on average equity 4.11 % 8.21 % 8.02 %
Net interest margin 4.42 % 4.18 % 4.49 %
Efficiency ratio 83.41 % 80.73 % 75.85 %
 





Cornerstone Community Bank

Jeffrey P. Finck, 530-222-1460

President

Chief Executive Officer

jfinck@bankcornerstone.com

or

Patrick E. Phelan, 530-222-1460

Executive Vice President

Chief Financial Officer

pphelan@bankcornerstone.com


Source: Cornerstone Community Bank


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Business Wire