Cornerstone Community Bancorp Reports Financial Results For the Second Quarter Ended June 30, 2019

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the second quarter ended June 30, 2019.

The Company reported net income of $911,000 for the three months ended June 30, 2019 compared to net income of $664,000 for the same period last year. Diluted earnings per share were $0.60 for the three months ended June 30, 2019 compared to $0.44 for the same period last year.

The return on average assets for the three months ended June 30, 2019 was 1.34% and the return on average equity was 15.47%. The net interest margin expanded to 4.36% for the three months ended June 30, 2019 compared to 4.23% for the same period last year and the efficiency ratio declined to 56.05% for the three months ended June 30, 2019 compared to 61.13% for the same period last year.

For the six months ended June 30, 2019, the Company reported net income of $1,696,000 compared to net income of $1,226,000 for the same period last year. Diluted earnings per share were $1.12 for the six months ended June 30, 2019 compared to $0.83 for the same period last year.

The return on average assets for the six months ended June 30, 2019 was 1.26% and the return on average equity was 14.67%.

President and CEO, Jeff Finck, stated, “Our return on average assets, return on average equity and net interest margin all expanded for the quarter and six months ended June 30, 2019 compared to the same period last year. Our efficiency ratio also improved during those periods and was at 56% for the most recent quarter.”

Net Interest Income

Net interest income increased to $2,691,000 for the quarter ended June 30, 2019 compared to $2,371,000 for the same quarter last year. For the six months ended June 30, 2019, net interest income increased to $5,320,000 compared to $4,599,000 for the same period last year.

Provision for credit losses

The Company recorded a $110,000 provision for credit losses for the quarter ended June 30, 2019 compared to $40,000 for the same quarter last year. For the six months ended June 30, 2019, the Company recorded a $200,000 provision for credit losses compared to $104,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended June 30, 2019 was $476,000 compared to $158,000 for the quarter ended June 30, 2018. For the six months ended June 30, 2019, non-interest income was $801,000 compared to $319,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,775,000 for the quarter ended June 30, 2019 compared to $1,546,000 for the same period last year. For the six months ended June 30, 2019, non-interest expense was $3,531,000 compared to $3,124,000 for the same period last year.

Balance Sheet

The Company had total assets at June 30, 2019 of $289.3 million compared to $244.8 million at June 30, 2018.

Total loans, net of unearned income at June 30, 2019 were $222.2 million compared to $194.0 million at June 30, 2018.

Total deposits were $256.2 million at June 30, 2019 compared to total deposits of $211.8 million at June 30, 2018.

Credit Quality

The allowance for loan losses was $2,345,000, or 1.06% of loans, net of unearned income at June 30, 2019, compared to $1,947,000, or 1.00% of loans, net of unearned income at June 30, 2018. There were $99,000 in nonperforming assets at June 30, 2019 and no nonperforming assets at June 30, 2018.

Capital

At June 30, 2019, shareholders’ equity totaled $24.0 million compared to $21.0 million at June 30, 2018. Book value per share was $16.71 per share at June 30, 2019 compared to $14.97 per share at June 30, 2018. During the second quarter of 2018, the Company completed a private placement of $2.1 million of its common stock. In the offering, the Company issued 119,285 shares of its common stock at a purchase price of $17.5 per share.

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 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.

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