Cornerstone Community Bancorp Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2022

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the fourth quarter and full year ended December 31, 2022.

The Company reported net income of $1,926,000 for the three months ended December 31, 2022 compared to net income of $1,967,000 for the same period last year. Diluted earnings per share were $1.27 for the three months ended December 31, 2022 compared to $1.29 for the same period last year.

The return on average assets for the three months ended December 31, 2022 was 1.32% and the return on average equity was 24.23%. The tax-equivalent net interest margin was 3.61% for the three months ended December 31, 2022 compared to 3.59% for the same period last year and the efficiency ratio was 50.73% for the three months ended December 31, 2022 compared to 43.14% for the same period last year.

For the year ended December 31, 2022, the Company reported net income of $7,243,000 compared to net income of $7,915,000 for the same period last year. Diluted earnings per share were $4.74 for the year ended December 31, 2022 compared to $5.25 for the same period last year.

The return on average assets for the year ended December 31, 2022 was 1.24% and the return on average equity was 21.36%.

President and CEO, Matt Moseley stated, “We are pleased with our 2022 operating results. We are excited to begin the new year with the team and infrastructure we put in place in 2022.”

Net Interest Income

Net interest income increased to $5,156,000 for the quarter ended December 31, 2022 compared to $4,781,000 for the same quarter last year. For the year ended December 31, 2022, net interest income increased to $19,307,000 compared to $17,993,000 for the same period last year.

Provision for credit losses

There was no provision for credit losses recorded for the quarter ended December 31, 2022 compared to $150,000 for the same quarter last year. For the year ended December 31, 2022, the Company recorded a $113,000 provision for credit losses compared to $1,050,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended December 31, 2022 was $265,000 compared to $339,000 for the quarter ended December 31, 2021. For the year ended December 31, 2022, non-interest income was $1,060,000 compared to $2,245,000 for the same period last year.

Non-Interest Expense

Non-interest expense was $2,750,000 for the quarter ended December 31, 2022 compared to $2,209,000 for the same period last year. For the year ended December 31, 2022, non-interest expense was $10,118,000 compared to $8,067,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at December 31, 2022 were $420.4 million compared to $387.4 million at December 31, 2021.

Total deposits were $534.8 million at December 31, 2022 compared to total deposits of $547.7 million at December 31, 2021.

Credit Quality

The allowance for loan losses was $5,159,000, or 1.23% of loans, net of unearned income, at December 31, 2022, compared to $5,059,000, or 1.31% of loans, net of unearned income, at December 31, 2021. There were no nonperforming assets at December 31, 2022 and December 31, 2021.

Capital

At December 31, 2022, shareholders’ equity totaled $33.3 million compared to $37.0 million at December 31, 2021. At December 31, 2022, the Company's book value per common share was $22.48 compared to $25.31 at December 31, 2021. During the year ended December 31, 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 $(12,105,000) at December 31, 2022, compared to $(945,000) at December 31, 2021. Excluding AOCI, book value increased to $30.66 at December 31, 2022, compared to $25.96 at December 31, 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 December 31, 2022, the Bank’s estimated total risk-based capital ratio was 12.61% and its tier 1 capital to risk weighted assets ratio was 11.52%. 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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