N@N

Cornerstone Community Bank Reports Financial Results For the First Quarter Ended March 31, 2011

^{Published on 2011-05-04 20:20:40 - Market Wire}
 

RED BLUFF, Calif.--([ BUSINESS WIRE ])--Cornerstone Community Bank, (OTCBB:CRSB), announced today its financial results for the first quarter ended March 31, 2011.

"Our first quarter results mark the Banka™s seventh consecutive quarterly profit. We are well-positioned for the future and look forward to continued investments in the communities we serve."

The Bank reported net income of $130,000 for the three months ended March 31, 2011 representing an increase of $83,000, or 177%, compared to net income of $47,000 for the same period last year. Diluted earnings per share for the three months ended March 31, 2011 were $0.11 compared to $0.04 for the same period last year.

The return on average assets for the three months ended March 31, 2011 was 0.67% compared to 0.27% for the same period last year. The return on average equity was 5.76% for the three months ended March 31, 2011 compared to 2.13% for the same period last year.

President and CEO, Jeffrey Finck stated, aOur first quarter results mark the Banka™s seventh consecutive quarterly profit. We are well-positioned for the future and look forward to continued investments in the communities we serve.a

Net Interest Income

Net interest income of $896,000 for the quarter ended March 31, 2011 represented an increase of approximately $178,000, or 25%, from $718,000 for the same quarter one year earlier. The net interest margin increased to 4.93% during the quarter ended March 31, 2011 compared to 4.31% during the same quarter last year.

Provision for credit losses

The provision for credit losses for the quarter ended March 31, 2011 was $28,000 compared to $47,000 for the quarter ended March 31, 2010.

Non-Interest Income

The Banka™s non-interest income for the quarter ended March 31, 2011 was $63,000 compared to $47,000 for the quarter ended March 31, 2010.

Non-Interest Expense

Non-interest expense was $801,000 for the quarter ended March 31, 2011 compared to $671,000 for the same period one year earlier.

The Banka™s efficiency ratio, the ratio of non-interest expense to net revenues, was 83.52% during the quarter ended March 31, 2011 compared to 87.71% during the same period last year.

Balance Sheet

The Bank had total assets at March 31, 2011 of $79.0 million, compared to $72.3 million at March 31, 2010, representing growth of $6.7 million, or 9%.

Total loans outstanding at March 31, 2011, net of unearned income, were $56.8 million compared to $48.4 million at March 31, 2010, representing an increase of $8.4 million, or 17%.

Total deposits were $70.0 million at March 31, 2011 compared to total deposits of $63.2 million at March 31, 2010, representing an increase of $6.3 million, or 10%.

Credit Quality

The allowance for loan losses was $1,099,000, or 1.93% of total loans at March 31, 2011, compared to $825,000, or 1.71% of total loans, at March 31, 2010. Nonperforming assets at March 31, 2011 consisted of non-accrual loans of $213,000 compared to non-accrual loans of $138,000 at March 31, 2010.

The bank recognized $33,000 in net loan charge-offs during quarter ended March 31, 2011 compared to $64,000 for the same period last year.

Capital Adequacy

At March 31, 2011, shareholdersa™ equity totaled $9.1 million compared to $8.9 million at March 31, 2010. At March 31, 2011, the total risk-based capital ratio, tier one capital ratio, and leverage ratio was 15.95%, 14.69% and 12.06%, respectively, all exceeding the regulatory standards for awell-capitalizeda institutions of 10.00%, 6.00%, 5.00%, respectively.

Decision to Exit the Indirect Auto Lending Business

In April, 2011, the Bank decided to exit the indirect auto lending business. The Bank will continue to service the existing loans until they are paid and it will continue to offer auto loans directly to customers. As a result of this decision, the Bank will incur approximately $252,000 of incremental charges in the second quarter of 2011. This decision is not expected to have an adverse impact on earnings due to certain cost savings that will be attained. Exiting the business will allow the Bank to focus more on its core business of real estate, construction, commercial and consumer loans to small businesses, professionals and individuals.

About Cornerstone Community Bank

Cornerstone Community Bank is a California state-chartered bank with its headquarters office in Red Bluff and a loan production 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.ccbca.com ].

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by that Act. 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 abelieve,a aexpect,a aanticipate,a aintend,a aplan,a aestimate,a or words of similar meaning, or future or conditional verbs such as awill,a awould,a ashould,a acould,a or amay.a Forward-looking statements describe future plans, strategies and expectations.Forward-looking statements are based on currently available information, expectations, assumptions, projections, and managementa™s judgment about the Bank, the banking industry and general economic conditions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing managementa™s views as of any subsequent date.Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.

Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this press release.Factors that might cause such differences include, but are not limited to: the Banka™s ability to successfully execute its business plans and achieve its objectives; changes in general economic, real estate and financial market conditions, either nationally or locally in areas in which the Bank conducts its operations; changes in interest rates; new litigation or changes in existing litigation; future credit loss experience; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Banka™s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.