Cornerstone Community Bancorp Reports Financial Results For the First Quarter Ended March 31, 2024

The return on average assets for the three months ended March 31, 2024 was 0.86% and the return on average equity was 12.69%. The tax-equivalent net interest margin was 3.18% for the three months ended March 31, 2024 compared to 3.65% for the same period last year.

President and CEO, Matt Moseley stated, "The banking industry as a whole continues to be challenged with increasing liability costs and deposit competition. While Cornerstone has experienced an increase in cost of funds, the rate of increase is stabilizing and we continue to gain market share in the communities we serve. In March, Cornerstone rolled out a new and state of the art digital banking platform. The investment in new customer facing technology is already paying off and we have acquired new relationships as a result. In April, recognizing an opportune time to hedge interest rate risk, Cornerstone entered into an interest rate swap agreement that provides protection in a rising rate environment with limited overall cost if rates fall. While the economy will certainly present challenges, as it always does, our team is well prepared and will continue to execute on our strategy to run a safe and sound community bank that generates strong returns for our shareholders."

Net Interest Income

Net interest income decreased to $4,884,000 for the quarter ended March 31, 2024 compared to $5,180,000 for the same quarter last year.

Provision for credit losses on loans

The Company recorded a $144,000 provision for credit losses on loans for the quarter ended March 31, 2024 compared to $110,000 for the same period last year.

Non-Interest Income

Non-interest income for the quarter ended March 31, 2024 was $356,000 compared to $310,000 for the quarter ended March 31, 2023.

Non-Interest Expense

Non-interest expense was $3,202,000 for the quarter ended March 31, 2024 compared to $3,024,000 for the same period last year.

Balance Sheet

Total loans, net of unearned income, at March 31, 2024 were $488.2 million compared to $431.5 million at March 31, 2023.

Total deposits were $590.0 million at March 31, 2024 compared to total deposits of $565.7 million at March 31, 2023.

Credit Quality

The allowance for credit losses on loans was $5,957,000, or 1.22% of loans, net of unearned income, at March 31, 2024, compared to $5,397,000, or 1.25% of loans, net of unearned income, at March 31, 2023. There were no nonperforming assets at March 31, 2024 compared to $233,000 at March 31, 2023.

Capital

At March 31, 2024, shareholders' equity totaled $44.6 million compared to $36.4 million at March 31, 2023. At March 31, 2024, the Company's book value per common share was $29.99 compared to $24.57 at March 31, 2023.

At March 31, 2024, the Bank's estimated total risk-based capital ratio was 12.89% and its tier 1 capital to risk weighted assets ratio was 11.80%. 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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