Cornerstone Community Bancorp Reports Financial Results For the Third Quarter Ended September 30, 2022

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the third quarter ended September 30, 2022.

The Company reported net income of $1,936,000 for the three months ended September 30, 2022 compared to net income of $2,085,000 for the same period last year. Diluted earnings per share were $1.27 for the three months ended September 30, 2022 compared to $1.38 for the same period last year.

The return on average assets for the three months ended September 30, 2022 was 1.30% and the return on average equity was 23.11%. The tax-equivalent net interest margin was 3.60% for the three months ended September 30, 2022 compared to 3.66% for the same period last year and the efficiency ratio was 49.42% for the three months ended September 30, 2022 compared to 38.37% for the same period last year.

For the nine months ended September 30, 2022, the Company reported net income of $5,317,000 compared to net income of $5,948,000 for the same period last year. Diluted earnings per share were $3.48 for the nine months ended September 30, 2022 compared to $3.96 for the same period last year.

The return on average assets for the nine months ended September 30, 2022 was 1.21% and the return on average equity was 20.48%.

President and CEO, Matt Moseley stated, “We continue to produce strong returns on assets and equity. Credit quality remains strong with no nonperforming assets. Operating expenses have increased as the bank continues to hire and build its infrastructure for future growth.”

Net Interest Income

Net interest income increased to $5,196,000 for the quarter ended September 30, 2022 compared to $4,756,000 for the same quarter last year. For the nine months ended September 30, 2022, net interest income increased to $14,151,000 compared to $13,212,000 for the same period last year.

Provision for credit losses

Provision for credit losses were $40,000 for the quarter ended September 30, 2022 compared to $400,000 for the same quarter last year. For the nine months ended September 30, 2022, the Company recorded a $113,000 provision for credit losses compared to $900,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended September 30, 2022 was $265,000 compared to $652,000 for the quarter ended September 30, 2021. For the nine months ended September 30, 2022, non-interest income was $795,000 compared to $2,013,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $2,699,000 for the quarter ended September 30, 2022 compared to $2,075,000 for the same period last year. For the nine months ended September 30, 2022, non-interest expense was $7,368,000 compared to $5,965,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at September 30, 2022 were $400.5 million compared to $388.5 million at September 30, 2021.

Total deposits were $545.3 million at September 30, 2022 compared to total deposits of $500.1 million at September 30, 2021.

Credit Quality

The allowance for loan losses was $5,172,000, or 1.29% of loans, net of unearned income, at September 30, 2022, compared to $4,909,000, or 1.26% of loans, net of unearned income, at September 30, 2021. There were no nonperforming assets at September 30, 2022 and September 30, 2021.

Capital

At September 30, 2022, shareholders’ equity totaled $30.6 million compared to $35.5 million at September 30, 2021. At September 30, 2022, the Company's book value per common share was $20.81 compared to $24.37 at September 30, 2021. During the nine months ended September 30, 2022, increasing interest rates resulted in a decline in the fair value of available for sale investment securities. This impact is reflected in the decline in accumulated other comprehensive income (AOCI) to $(12,763,000) at September 30, 2022, compared to $(378,000) at September 30, 2021. Excluding AOCI, book value increased to $29.50 at September 30, 2022, compared to $24.63 at September 30, 2021.

AOCI has no effect on Cornerstone Community Bank’s (the Bank) regulatory capital ratios as the Bank opted to exclude it from regulatory capital calculations. At September 30, 2022, the Bank’s total risk-based capital ratio was 13.39% and its tier 1 capital to risk weighted assets ratio was 12.18%. The Bank remains well capitalized under the regulatory framework for prompt corrective action.

About Cornerstone Community Bancorp

Cornerstone Community Bancorp, a bank holding company headquartered in Red Bluff, California, serves the Red Bluff, Redding and Anderson communities through its wholly-owned subsidiary, Cornerstone Community Bank with a headquarters office in Red Bluff, two banking offices in Redding and one in Anderson. 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 release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact Cornerstone Community Bancorp's earnings in future periods. 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 “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, natural disasters (such as wildfires and earthquakes), pandemics such as COVID-19 and the economic impact caused directly by the disease and by government responses thereto, general economic conditions, economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, costs or effects of acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation (including the Coronavirus Aid, Relief and Economic Security Act of 2022), interruptions of utility service in our markets for sustained periods, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cybersecurity threats) affecting Cornerstone Community Bancorp's operations, pricing, products and services. 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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