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6B Daily News – Tuesday, July 24, 2012 Bank reports financial results for the Second Quarter Cornerstone Commu- nity Bank announced today its financial results for the second quarter ended June 30. The Bank reported net income of $253,000 for the three months ended June 30, 2012 represent- ing an increase of $65,000, or 35%, com- pared to net income of $188,000 for the same period last year. Diluted earnings per share for the three months ended June 30, 2012 were $0.20 com- pared to $0.15 for the same period last year. Net income for the six months ended June 30, 2012 was $472,000, or $0.37 per diluted share compared to net income of $318,000, or $0.26 per diluted share, for the first six months of 2011. The return on average assets for the three months ended June 30, 2012 was 1.00% com- pared to 0.95% for the same period last year. The return on average equity was 9.47% for the three months ended June 30, 2012 compared to 8.04% for the same peri- od last year. For the six months ended June 30, 2012, the return on aver- age assets was 0.96% and the return on average equity was 8.99% com- pared to 0.81% and 6.92%, respectively, for the first six months of 2011. Jeffrey Finck stated, "The second quarter was our twelfth consecutive prof- itable quarter. The new Redding branch is off to a solid start as it significant- ly contributed to the Bank's 32% growth in total assets year-over- year." President and CEO, Net Interest Income Net interest income of $1,182,000 for the quarter ended June 30, 2012 rep- resented an increase of $259,000, or 28%, from $923,000 for the same quarter one year earlier. The net interest margin increased to 4.90% during the quarter ended June 30, 2012 compared to 4.87% during the same quarter last year. For the six months ended June 30, 2012, net interest income was $2,177,000 compared to $1,819,000 for the first six months of 2011 repre- senting an increase of $358,000, or 20%. The net interest margin decreased to 4.68% for the first six months of 2012 compared to 4.89% during the same period last year. Provision for credit losses The provision for cred- it losses for the quarter ended June 30, 2012 was $135,000 compared to $61,000 for the quarter ended June 30, 2011. The provision for credit losses for the six months ended June 30, 2012 was $135,000 compared to $89,000 for the six months ended June 30, 2011. Non-Interest Income The Bank's non-inter- est income for the quarter ended June 30, 2012 was $122,000 compared to $61,000 for the quarter ended June 30, 2011. For the six months ended June 30, 2012, non-interest income was $237,000 compared to $124,000 for the same period last year. Non-Interest Expense Non-interest expense was $940,000 for the quarter ended June 30, 2012 compared to $1,018,000 for the same period one year earlier. Non-interest expense for the quarter ended June 30, 201l included a $252,000 charge related to the exit from the indirect auto lending business. For the six months ended June 30, 2012, non-interest expense was $1,855,000 compared to $1,819,000 for the same period last year, representing an increase of $36,000, or 2%. During the quarter ended June 30, 2012, the Bank recognized an income tax benefit of $24,000 compared to $283,000 for the same period last year. These benefits were primarily due to the recognition of deferred tax assets. Balance Sheet Income Taxes were $85,000 compared to $220,000 at June 30, 2011. The bank recognized $80,000 in net loan charge-offs during the six months ended June 30, 2012, representing 0.25% of average loans on an annualized basis. Capital Adequacy At June 30, 2012, shareholders' equity totaled $10.9 million compared to $9.7 million at June 30, 2011. At June 30, 2012, the total risk- based capital ratio, tier LEGAL NOTICE one capital ratio, and leverage ratio was 14.29%, 13.03% and 10.26%, respectively, all exceeding the regulatory standards for "well-capi- talized" institutions of 10.00%, 6.00% and 5.00%, respectively. The Bank had total assets at June 30, 2012 of $102.8 million, compared to $77.9 million at June 30, 2011, representing growth of $24.9 million, or 32%. Total loans outstanding at June 30, 2012, net of unearned income, were $68.5 million compared to $58.0 million at June 30, 2011, representing an increase of $10.5 million, or 18%. Total deposits were $91.4 million at June 30, 2012 compared to total deposits of $67.8 million at June 30, 2011, repre- senting an increase of $23.6 million, or 35%. Credit Quality The allowance for loan losses was $1,325,000, or 1.93% of total loans at June 30, 2012, compared to $1,140,000, or 1.97% of total loans, at June 30, 2011. 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