Cornerstone Community Bancorp Reports Financial Results for the First Quarter Ended March 31, 2015

RED BLUFF, Calif.--(BUSINESS WIRE)--

Cornerstone Community Bancorp CRSB announced today its financial results for the first quarter ended March 31, 2015.

The Company reported net income of $226,000 for the three months ended March 31, 2015 compared to net income of $131,000 for the same period last year, an increase of $95,000, or 73%. Diluted earnings per share for the three months ended March 31, 2015 were $0.17 compared to $0.10 for the same period last year, an increase of $0.07, or 70%.

The return on average assets for the three months ended March 31, 2015 was 0.58% compared to 0.41% for the three months ended March 31, 2014. The return on average equity was 6.49% for the three months ended March 31, 2015 compared to 4.11% for the same period last year.

President and CEO Jeff Finck commented, "Loan growth continues to drive the Company forward. The 23% growth in loans led to the Company's 73% increase in net income for the first quarter."

Net Interest Income

Net interest income was $1,513,000 for the quarter ended March 31, 2015 representing an increase of $194,000, or 15%, from $1,319,000 for the same period one year earlier. The net interest margin decreased to 4.11% during the quarter ended March 31, 2015 compared to 4.42% during the same period last year.

Provision for credit losses

There was no provision for credit losses recorded for the quarter ended March 31, 2015 compared to $24,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2015 was $178,000 compared to $110,000 for the quarter ended March 31, 2014.

Non-Interest Expense

Non-interest expense was $1,307,000 for the quarter ended March 31, 2015 compared to $1,192,000 for the same period one year earlier.

Balance Sheet

The Company had total assets at March 31, 2015 of $167.2 million, compared to $126.8 million at March 31, 2014, representing growth of $40.4 million, or 32%.

Total loans outstanding at March 31, 2015 were $127.0 million compared to $103.1 million at March 31, 2014, representing an increase of $23.9 million, or 23%.

Total deposits were $147.7 million at March 31, 2015 compared to total deposits of $111.6 million at March 31, 2014, representing an increase of $36.1 million, or 32%.

Credit Quality

The allowance for loan losses was $1,608,000, or 1.27% of loans, net of unearned income at March 31, 2015, compared to $1,415,000, or 1.42% of loans, net of unearned income at March 31, 2014. Nonperforming assets at March 31, 2015 were $423,000 compared to $202,000 at March 31, 2014. The bank recognized $3,000 in net loan recoveries during the quarter ended March 31, 2015.

Capital

At March 31, 2015, shareholders' equity totaled $14.0 million compared to $12.8 million at March 31, 2014, an increase of $1.2 million, or 9.4%.

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 a banking office 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 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 Bancorp 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 Bancorp'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 Bancorp is engaged; (6) competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than Cornerstone Community Bancorp; 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 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)
		03/31/15				12/31/14				09/30/14				06/30/14				03/31/14
ASSETS
Cash and due from banks		$	3,982			$	2,750			$	2,657			$	4,268			$	3,203
Federal funds sold			-				-				-				-				-
Interest-bearing deposits			21,281				6,070				10,401				11,113				533
Investment securities			10,511				11,149				11,378				14,988				15,250
Loans held for sale			-				-				-				3,072				3,134
Loans, net of unearned income			127,045				124,547				115,954				108,796				99,960
Allowance for loan losses			(1,608	)			(1,605	)			(1,607	)			(1,464	)			(1,415	)
Loans, net			125,437				122,942				114,347				107,332				98,545
Premises and equipment, net			851				909				958				1,010				1,049
Other assets			5,157				5,295				5,202				5,288				5,134
Total assets		$	167,219			$	149,115			$	144,943			$	147,071			$	126,848
LIABILITIES
Deposits:
Demand noninterest-bearing		$	29,852			$	24,707			$	23,566			$	23,434			$	19,198
Demand interest-bearing			20,607				21,566				15,817				17,128				19,404
Money market and savings			54,169				42,114				45,221				45,942				41,072
Time deposits of less than $100,000			16,239				17,939				17,824				17,719				13,298
Time deposits of $100,000 or more			26,798				28,606				28,656				29,321				18,579
Total deposits			147,665				134,932				131,084				133,544				111,551
Federal Home Loan Bank borrowings			-				-				-				-				2,000
Subordinated debentures			4,870				-				-				-				-
Interest payable and other liabilities			668				456				510				454				464
Total liabilities			153,203				135,388				131,594				133,998				114,015
SHAREHOLDERS' EQUITY
Common stock			13,185				13,161				13,095				12,981				12,960
Retained Earnings			615				414				160				(65	)			(234	)
Accumulated other comprehensive income (loss)			216				152				94				157				107
Total shareholders' equity			14,016				13,727				13,349				13,073				12,833
Total liabilities and shareholders' equity		$	167,219			$	149,115			$	144,943			$	147,071			$	126,848
Total equity / total assets			8.38	%			9.21	%			9.21	%			8.89	%			10.12	%
Book value per share		$	11.19			$	10.96			$	10.84			$	10.79			$	10.59

CORNERSTONE COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)
		Three months ended
			03/31/15				12/31/14				03/31/14
INTEREST INCOME
Loans		$	1,587			$	1,552			$	1,275
Federal funds sold			-				-				-
Investment securities			77				83				155
Other			18				17				10
Total interest income			1,682				1,652				1,440
INTEREST EXPENSE
Deposits:
Interest-bearing demand			6				5				5
Money market and savings			35				27				58
Time deposits			87				91				57
Other			41				-				1
Total interest expense			169				123				121
Net interest income			1,513				1,529				1,319
Provision for credit losses			-				-				24
Net interest income after provision for credit losses			1,513				1,529				1,295
NON-INTEREST INCOME
Service charges on deposit accounts			22				32				19
Gain on sale of SBA loans			-				-				-
Gain (loss) on sale of other real estate owned			-				-
Gain on sale of securities			-				-				(6	)
Other non-interest income			156				130				97
Total non-interest income			178				162				110
OPERATING EXPENSES
Salaries and benefits			733				715				638
Premises and fixed assets			140				138				139
Other			434				413				415
Total operating expenses			1,307				1,266				1,192
Income before income taxes			384				425				213
Income taxes			158				171				82
NET INCOME		$	226			$	254			$	131
EARNINGS PER SHARE
Basic earnings per share		$	0.18			$	0.20			$	0.11
Diluted earnings per share		$	0.17			$	0.19			$	0.10
Average common shares outstanding			1,252,000				1,247,652				1,212,000
Average common and equivalent shares outstanding			1,342,315				1,339,125				1,316,906
PERFORMANCE MEASURES
Return on average assets			0.58	%			0.68	%			0.41	%
Return on average equity			6.49	%			7.43	%			4.11	%
Net interest margin			4.11	%			4.26	%			4.42	%
Efficiency ratio			77.29	%			74.87	%			83.41	%