CORNERSTONE BANCORP INC. PALATINE, Ill., Jan. 28, 2021 (GLOBE NEWSWIRE) -- Cornerstone Bancorp, Inc. (OTC Pink: CNBP), the bank holding company for Cornerstone National Bank & Trust Company (collectively “Cornerstone”), today reported net income increased 63.2% to $2.29 million, or $2.30 per diluted share, for the fourth quarter of 2020, compared to $1.40 million, or $1.47 per diluted share, for the fourth quarter of 2019. The provision for loan losses was $650,000 during 4Q20, compared to no provision in the fourth quarter a year ago.
For the year ended December 31, 2020, net income increased 64.2% to $8.37 million, or $8.42 per diluted share, compared to $5.10 million, or $6.63 per diluted share, for the year ended December 31, 2019. The provision for loan losses increased to $900,000 in 2020, compared to no provision for loan losses in 2019. Continued core deposit growth, mortgage revenue, plus fee and interest income from the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) contributed to profitability for the year. All 2020 results are unaudited.
“Cornerstone’s achievements in 2020 were largely due to record production in the Mortgage Division and our success in supporting our customers with PPP,” stated Jeffrey T. Boundy, President & CEO of Cornerstone National Bank & Trust Company. “We generated record net income for the quarter and the full year, fueled by solid revenue growth and the addition of many new client relationships to the bank. Strategic investments in our team supplemented by the recruiting of high-quality talent and advancement in company technology provided a sound foundation. Our ability to assist both new and existing customers amidst the evolving economic impact of the pandemic has not faltered.”
“Contributing to our success in 2020 included our active participation in the SBA’s PPP program,” Boundy continued. “As of year-end, we assisted 934 customers with $208.1 million in PPP funding. We are participating in the SBA’s new round of PPP funding that began earlier this month, which offers new PPP loans for companies that did not receive one in 2020, as well as “second draw” PPP loans targeted at hard-hit businesses that have already spent their initial PPP proceeds. While we are still early in the process, we are working diligently to help our customers and the communities we serve.”
Fourth Quarter and Full Year 2020 Highlights:
- Net income increased 63.2% to $2.29 million, or $2.30 per diluted share, in the fourth quarter of 2020, compared to $1.40 million, or $1.47 per diluted share, in the fourth quarter of 2019.
- For 2020, net income increased 64.2% to $8.37 million, or $8.42 per diluted share, compared to $5.10 million, or $6.63 per diluted share, in 2019.
- Interest and fees recognized on PPP loans totaled $2.8 million in 4Q20. For the year, PPP loans accounted for $6.2 million of revenue.
- The net interest margin (NIM) expanded 25 basis points to 3.45% for 4Q20, compared to 3.20% for 4Q19. NIM for 4Q20 benefitted from the addition of $1.6 million of PPP fee income which was accelerated as PPP loans were forgiven by the SBA.
- The activity in the Mortgage Division continued at a record pace in 4Q20 as interest rates remained at historically low levels. The Bank sold $101.3 million of loans and realized gross revenue of $1.8 million during 4Q20.
- Noninterest expense was $6.9 million in 4Q20 compared to $4.7 million in 4Q19. The 4Q20 results included $1.4 million of expenses related to the Mortgage Division compared to $402,000 in 4Q19.
- Total assets increased 40.8% to $891.2 million at year-end, compared to $633.1 million a year earlier.
- Tangible shareholders’ equity improved 24.8% to $47.4 million at December 31, 2020, compared to $38.0 million a year earlier.
- PPP loans totaled $131.2 million at December 31, 2020. Forgiveness proceeds totaling $76.8 million were received during the quarter.
- The loan portfolio, excluding PPP loans, totaled $463.9 million at year-end, which was $7.0 million, or 1.5%, lower than a year ago. The COVID-19 pandemic has led to a slowdown in the working capital needs for many clients in 2020, resulting in lower borrowing needs for our customers.
- The allowance for loan losses was 1.56% of loans, exclusive of PPP loans which are 100% guaranteed by the Small Business Administration.
- Total deposits and repurchase agreements increased 41.1% to $808.1 million at December 31, 2020, compared to $572.6 million a year ago.
- Trust assets increased 3.6% to $811.9 million, at year-end, from $783.6 million a year earlier.
- Tangible book value per share increased 24.8% to $47.72 at year-end, compared to $38.23 per diluted share at December 31, 2019.
- The Bank continues to be well-capitalized, with a Tier 1 Leverage Capital Ratio of 8.22% at December 31, 2020 compared to 8.47% at December 31, 2019.
We remain focused on the health and safety of our employees and customers during this time. To support social distancing, we temporarily limited access to our branch lobbies while still providing a full suite of services to our clients.
About Cornerstone Bancorp, Inc.
Founded in 2000, Cornerstone Bancorp, Inc., and its wholly-owned subsidiary, Cornerstone National Bank & Trust Company, is committed to serving the commercial banking and investment needs of families and family-owned businesses. Cornerstone serves its clients by investing heavily in people and technology, providing an uncommon relationship experience. Cornerstone has been successful in attracting new clients and talent as the Chicago market consolidates and large banks deemphasize relationships in favor of an institutional approach.
Cornerstone is a leader in commercial lending services including equipment, real estate and construction loans, operating lines of credit and a full suite of treasury management products and services.
For individuals and families, wealth management services are offered, including investment management, trust and custody services, retirement plans and estate and guardianship administration.
Headquartered in Palatine, Illinois, Cornerstone maintains offices in Crystal Lake, Lake Zurich, Naperville and Schaumburg. Visit us on the web at www.CornerstoneNB.com.
Forward Looking Statement
This release may contain “forward-looking statements” that are subject to risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to Cornerstone or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include our ability to maintain or expand our market share or net interest margins, and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy, as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks may have a material adverse impact on our operations and business.
FINANCIAL TABLES TO FOLLOW
| Financial Highlights (2020 Results Are Unaudited) | |||||||||||||||
| ($ in Thousands, Except Share and Per Share Data) | |||||||||||||||
| For the Quarter Ending | Year To Date | ||||||||||||||
| Income Statement | 12/31/2020 (Unaudited) | 12/31/2019 | % Change | 12/31/2020 (Unaudited) | 12/31/2019 | ||||||||||
| Net Interest Income | 7,855 | 5,184 | 51.5 | % | 26,662 | 20,594 | |||||||||
| Provision for Loan Losses | 650 | - | 0.0 | % | 900 | - | |||||||||
| Noninterest Income | 2,900 | 1,459 | 98.8 | % | 10,222 | 5,352 | |||||||||
| Noninterest Expense | 6,878 | 4,726 | 45.5 | % | 24,315 | 18,949 | |||||||||
| Provision for Income Taxes | 939 | 515 | 82.5 | % | 3,295 | 1,897 | |||||||||
| Net Income | $ | 2,288 | $ | 1,402 | 63.2 | % | 8,374 | 5,100 | |||||||
| Ratios | |||||||||||||||
| Return on Average Assets * | 0.99 | % | 0.85 | % | 16.3 | % | 1.01 | % | 0.83 | % | |||||
| Return on Average Stockholders' Equity * | 19.89 | % | 19.38 | % | 2.7 | % | 19.82 | % | 14.00 | % | |||||
| Net Interest Margin | 3.45 | % | 3.20 | % | 7.9 | % | 3.27 | % | 3.40 | % | |||||
| Allowance As A % Of Loans Outstanding ** | 1.56 | % | 1.50 | % | 3.8 | % | 1.56 | % | 1.50 | % | |||||
| Dividends Per Share | $ | - | $ | - | NA | $ | - | $ | 35.00 | ||||||
| Earnings Per Share | $ | 2.30 | $ | 1.47 | 56.2 | % | $ | 8.42 | $ | 6.63 | |||||
| Book Value Per Share | $ | 47.72 | $ | 38.23 | 24.8 | % | $ | 47.72 | $ | 38.23 | |||||
| End of Period | End of Period | ||||||||||||||
| Balance Sheet Data | 12/31/2020 (Unaudited) | 12/31/2019 | % Change | 12/31/2018 | 12/31/2017 | ||||||||||
| Total Assets | $ | 891,183 | $ | 633,145 | 40.8 | % | $ | 568,895 | $ | 535,508 | |||||
| Loans, Net of Allowance for Loan Loss | $ | 587,906 | $ | 463,814 | 26.8 | % | $ | 413,806 | $ | 369,095 | |||||
| Deposits and Repurchase Agreements | $ | 808,124 | $ | 572,617 | 41.1 | % | $ | 512,220 | $ | 478,715 | |||||
| Trust Preferred Securities | $ | 10,310 | $ | 10,310 | 0.0 | % | $ | 10,310 | $ | 10,310 | |||||
| Other Borrowings | $ | 19,755 | $ | 8,500 | 132.4 | % | $ | 2,500 | $ | - | |||||
| Tangible Stockholders' Equity | $ | 47,442 | $ | 38,005 | 24.8 | % | $ | 41,781 | $ | 45,121 | |||||
| Trust Assets | $ | 811,885 | $ | 783,631 | 3.6 | % | $ | 675,577 | $ | 716,302 | |||||
| Stock Value Per Common Share Data | |||||||||||||||
| Price-To-Earnings Ratio | 7.12 | 9.67 | -26.3 | % | 8.41 | 11.03 | |||||||||
| Price-To-Book Value Ratio | 1.26 | 1.68 | -25.0 | % | 1.32 | 1.05 | |||||||||
| Tangible Book Value Per Share | $ | 47.72 | $ | 38.23 | 24.8 | % | $ | 59.12 | $ | 65.05 | |||||
| Number of Shares Outstanding | 994,088 | 994,088 | 706,713 | 693,671 | |||||||||||
| Average Number of Shares Outstanding | 994,088 | 923,436 | 706,539 | 692,395 | |||||||||||
| Stock Price - High | $ | 65.00 | $ | 78.00 | $ | 93.00 | $ | 78.00 | |||||||
| Low | $ | 52.51 | $ | 53.00 | $ | 68.00 | $ | 68.00 | |||||||
| Ending | $ | 60.00 | $ | 64.10 | $ | 78.00 | $ | 68.00 | |||||||
| * - Quarter returns are based on annualized Net Income; Year-To-Date returns are based on the Last Twelve Months' (LTM) Net Income | |||||||||||||||
| ** - Excludes PPP loans which are 100% SBA guaranteed | |||||||||||||||
