Cornerstone Community Bancorp Reports Financial Results For the First Quarter Ended March 31, 2023

Cornerstone Community Bancorp (OTC Pink: CRSB) announced today its financial results for the first quarter ended March 31, 2023.

The Company reported net income of $1,695,000 for the three months ended March 31, 2023 compared to net income of $1,675,000 for the same period last year. Diluted earnings per share were $1.11 for the three months ended March 31, 2023 compared to $1.09 for the same period last year.

The return on average assets for the three months ended March 31, 2023 was 1.13% and the return on average equity was 19.20%. The tax-equivalent net interest margin was 3.65% for the three months ended March 31, 2023 compared to 3.17% for the same period last year.

President and CEO, Matt Moseley, stated, “Cornerstone Community Bank continues to be a well performing bank due to our strong team and loyal customer base. While elevated levels of deposits have exited banks nation-wide, Cornerstone experienced deposit growth in the 1^st quarter compared to both year-end 2022 and 1^st quarter of 2022. The bank has a well-positioned liquidity profile with a diversified deposit base. Our estimated level of uninsured deposits at March 31, 2023 was 37% and the bank maintains both on and off balance sheet liquidity of $283 million. We have and will continue to focus on our core business practices. We are confident that our business model and our presence in the communities we serve will continue to deliver positive results to our shareholders and customers alike.”

Net Interest Income

Net interest income increased to $5,180,000 for the quarter ended March 31, 2023 compared to $4,350,000 for the same quarter last year.

Provision for credit losses on loans

The Company recorded a $110,000 provision for credit losses on loans during the three months ended March 31, 2023 compared to $18,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2023 was $310,000 compared to $264,000 for the quarter ended March 31, 2022.

Non-Interest Expense

Non-interest expense was $3,024,000 for the quarter ended March 31, 2023 compared to $2,243,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at March 31, 2023 were $431.5 million compared to $375.4 million at March 31, 2022.

Total deposits were $565.7 million at March 31, 2023 compared to total deposits of $532.3 million at March 31, 2022.

Credit Quality

The allowance for credit losses on loans was $5,397,000, or 1.25% of loans, net of unearned income, at March 31, 2023, compared to $5,077,000, or 1.35% of loans, net of unearned income, at March 31, 2022. Nonperforming assets totaled $233,000 at March 31, 2023. There were no nonperforming assets at March 31, 2022.

Adoption of CECL

The Company adopted the current expected credit loss ("CECL") accounting standard on January 1, 2023. Upon adoption of the CECL standard, the Company increased the allowance for credit losses on loans by $127,549 and reduced the allowance for credit losses on unfunded loan commitments by $90,366. The Company adopted this standard using a modified retrospective approach through a cumulative-effect adjustment to retained earnings of $26,191.

Capital

At March 31, 2023, shareholders’ equity totaled $36.4 million compared to $33.7 million at March 31, 2022. At March 31, 2023, the Company's book value per common share was $24.57 compared to $22.93 at March 31, 2022.

At March 31, 2023, the Bank’s estimated total risk-based capital ratio was 12.95% and its tier 1 capital to risk weighted assets ratio was 11.84%. 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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