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Cornerstone Community Bank Reports Financial Results For the Second Quarter Ended June 30, 2011 and the Opening of a New Branch

^{Published on 2011-07-22 15:25:49 - Market Wire}
 

RED BLUFF, Calif.--([ BUSINESS WIRE ])--Cornerstone Community Bank, (OTCBB: CRSB), announced today its financial results for the second quarter ended June 30, 2011 and the opening of a new full service branch in Redding, CA.

"Our second quarter results mark the Banka™s eighth consecutive quarterly profit. We are excited to open the Redding office and begin serving Redding and the surrounding communities. The branch will be open Monday through Friday from 9:00 AM to 5:00 PM."

The Bank reported net income of $188,000 for the three months ended June 30, 2011 representing an increase of $128,000, or 213%, compared to net income of $60,000 for the same period last year. Diluted earnings per share for the three months ended June 30, 2011 were $0.15 compared to $0.05 for the same period last year. Net income for the six months ended June 30, 2011 was $318,000, or $0.26 per diluted share compared to net income of $107,000, or $0.09 per diluted share, for the first six months of 2010.

The return on average assets for the three months ended June 30, 2011 was 0.95% compared to 0.33% for the same period last year. The return on average equity was 8.04% for the three months ended June 30, 2011 compared to 2.66% for the same period last year. For the six months ended June 30, 2011, the return on average assets was 0.81% and the return on average equity was 6.92% compared to 0.30% and 2.40%, respectively, for the first six months of 2010.

The Bank will open a full service banking branch in Redding on August 1, 2011. The branch is located at 150 East Cypress Street and will offer a full compliment of banking services and products for both businesses and individuals.

President and CEO, Jeffrey Finck stated, aOur second quarter results mark the Banka™s eighth consecutive quarterly profit. We are excited to open the Redding office and begin serving Redding and the surrounding communities. The branch will be open Monday through Friday from 9:00 AM to 5:00 PM.a

Net Interest Income

Net interest income of $923,000 for the quarter ended June 30, 2011 represented an increase of approximately $174,000, or 23%, from $749,000 for the same quarter one year earlier. The net interest margin increased to 4.87% during the quarter ended June 30, 2011 compared to 4.28% during the same quarter last year. For the six months ended June 30, 2011, net interest income was $1,819,000 compared to $1,467,000 for the first six months of 2010 representing an increase of $352,000, or 24%. The net interest margin increased to 4.89% for the first six months of 2011 compared to 4.29% during the same period last year.

Provision for credit losses

The provision for credit losses for the quarter ended June 30, 2011 was $61,000 compared to $49,000 for the quarter ended June 30, 2010. The provision for credit losses for the six months ended June 30, 2011 was $89,000 compared to $96,000 for the six months ended June 30, 2010.

Non-Interest Income

The Banka™s non-interest income for the quarter ended June 30, 2011 was $61,000 compared to $57,000 for the quarter ended June 30, 2010. For the six months ended June 30, 2011, non-interest income was $124,000 compared to $104,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $1,018,000 for the quarter ended June 30, 2011 compared to $696,000 for the same period one year earlier, representing an increase of $322,000, or 46%. For the six months ended June 30, 2011, non-interest expense was $1,819,000 compared to $1,367,000 for the same period last year, representing an increase of $452,000, or 33%. In April 2011, the Bank decided to exit the indirect auto lending business. As a result of this decision, the Bank incurred $252,000 of incremental charges during the second quarter of 2011.

Income Taxes

During the quarter ended June 30, 2011, the Bank recognized $284,000 of deferred tax assets which added to the Banka™s net income. The Bank determined that the historical progress in earnings performance met the standards for recognition of these assets in the second quarter of 2011.

Balance Sheet

The Bank had total assets at June 30, 2011 of $78 million, compared to $73 million at June 30, 2010, representing growth of $5 million, or 7%.

Total loans outstanding at June 30, 2011, net of unearned income, were $58 million compared to $48 million at June 30, 2010, representing an increase of $10 million, or 21%.

Total deposits were $68 million at June 30, 2011 compared to total deposits of $64 million at June 30, 2010, representing an increase of $4 million, or 6%.

Credit Quality

The allowance for loan losses was $1,140,000, or 1.97% of total loans at June 30, 2011, compared to $863,000, or 1.8% of total loans, at June 30, 2010. Nonperforming assets at June 30, 2011 consisted of non-accrual loans of $220,000 compared to non-accrual loans of $159,000 at June 30, 2010.

The bank recognized $53,000 in net loan charge-offs during the six months ended June 30, 2011, representing 0.19% of average loans on an annualized basis.

Capital Adequacy

At June 30, 2011, shareholdersa™ equity totaled $9.7 million compared to $9.2 million at June 30, 2010. At June 30, 2011, the total risk-based capital ratio, tier one capital ratio, and leverage ratio was 15.49%, 14.23% and 11.65%, respectively, all exceeding the regulatory standards for awell-capitalizeda institutions of 10.00%, 6.00%, 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 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.