Exhibit 99.1
FOR IMMEDIATE RELEASE CONTACT: KEITH WINCHESTER
August 3, 2010 856-439-0300
CORNERSTONE FINANCIAL CORPORATION
REPORTS FOURTH CONSECUTIVE QUARTER OF PROFITABILITY
Mount Laurel, NJ, August 3, 2010 - Cornerstone Financial Corporation (CFIC.OB),
the holding company for Cornerstone Bank, reported today that net income
available to common shareholders for the second quarter of 2010 increased by
$1.6 million over the prior year's second quarter, to $488 thousand, or $0.27
per diluted share, as compared to a net loss of $1.1 million, or $(0.66) per
share, for the same period in 2009 and net income of $442 thousand or $0.24 per
diluted share, for the first quarter of 2010. Net income for the quarter before
preferred stock dividends totaled $521 thousand, versus a net loss of $1.1
million a year ago and net income of $475 thousand for the first quarter of
2010.
The improved quarterly performance for the three-month period compared to the
prior year period reflects an increase of $879 thousand in net interest income
coupled with a reduction of $1.8 million in the provision for loan losses. The
net interest margin for the three-month period ended June 30, 2010 increased by
52 basis points to 3.79% as compared to 3.27% for the same period in 2009 and
3.93% for the first quarter of 2010.
Total assets at June 30, 2010 were $341.3 million, an increase of $35.2 million
or 11.5% over December 31, 2009. This change was primarily due to increases in
cash equivalents of $28.0 million, investments held to maturity of $3.9 million
and loans receivable net of $3.6 million.
Total deposits at June 30, 2010 were $288.6 million, an increase of $39.1
million or 15.7% from December 31, 2009. The increase in deposits was
attributable to a significant increase of $26.0 million in core deposits
(defined as all interest bearing deposit accounts other than certificate of
deposit accounts) coupled with an increase of $13.1 million in certificates of
deposit. This growth reflects our commitment to build strong relationships with
new customers of the Bank.
Gross loans receivable at June 30, 2010, totaled $242.0 million, an increase of
$3.6 million or 1.5% from December 31, 2009. This increase was attributable to
increases in commercial loans of $1.6 million, commercial real estate loans of
$3.3 million and construction loans of $1.3 million. These increases were
partially offset by decreases in real estate loans secured by residential
properties of $2.0 million and consumer loans of $598 thousand. The reduction in
residential real estate loans reflects the payoff of a non-accrual loan
relationship totaling $1.8 million.
At June 30, 2010 our total non-performing assets were $6.5 million or 1.9% of
our total assets, a reduction of $1.6 million from non-performing assets of $8.1
million or 2.7% of total assets at December 31, 2009. The non-performing assets
consist of six (6) non-accrual loan relationships representing customers within
our primary market area.
For the six month period ended June 30, 2009, Cornerstone Financial Corporation
reported net income available to common shareholders of $930 thousand, or $0.51
per diluted share, as compared to a net loss of $1.3 million, or ($0.78) per
share, for the same period in 2009. The change in net income for the six-month
period reflects an increase of $1.9 million in net interest income coupled with
a reduction of $2.1 million in the provision for loan losses. The net interest
margin for the six-month period ended June 30, 2010 increased by 67 basis points
to 3.85% as compared to 3.18% for the same period in 2009.
Cornerstone's Chairman, President, and CEO George W. Matteo, Jr. commented
"Although this past quarter has been filled with many challenges we are
extremely pleased with our results and the deposit growth experienced during the
second quarter. The improved level of profitability experienced this quarter
represents our fourth consecutive quarter of profitability and continues the
positive trend begun in the third quarter of 2009." Mr. Matteo added: "The
improvement in our second quarter earnings over the prior year was brought about
by an improvement in our net interest margin. We were able to significantly
increase our core deposit base which contributed to much lower deposit costs."
Mr. Matteo continued, "We consider our second quarter earnings performance to be
noteworthy in light of the extremely difficult economic environment."
Cornerstone Financial Corporation is a New Jersey based bank holding company
headquartered in Mount Laurel, New Jersey. Cornerstone Bank ("the Bank") is a
New Jersey state chartered commercial bank headquartered in Moorestown, New
Jersey. The Bank commenced operations on October 4, 1999, and conducts business
from its main office in Moorestown and from five additional branch offices
located in Medford, New Jersey, Burlington, New Jersey, Cherry Hill, New Jersey,
Voorhees New Jersey and Mount Laurel, New Jersey.
Set forth below is selected financial information concerning Cornerstone
Financial Corporation:
SELECTED BALANCE SHEET DATA
JUNE 30, DECEMBER 31,
(IN THOUSANDS) 2010 2009
---------- ------------
UNAUDITED AUDITED
Investments held to maturity $ 51,955 $ 48,059
Loans receivable 242,078 238,424
Allowance for loan losses 3,429 3,432
Total assets 341,342 306,144
Deposits 288,621 249,493
Advances from the Federal Home Loan Bank 25,000 29,883
Stockholders equity 18,809 17,813
SELECTED NON-PERFORMING ASSET DATA
JUNE 30, DECEMBER 31,
(IN THOUSANDS) 2010 2009
---------- ------------
UNAUDITED AUDITED
Loans past due 90 days or more and accruing
Commercial $ 634 $ 634
Commercial real estate 2,645 1,765
Residential real estate 244 -
-------- --------
Total loans past due 90 days or more
and accruing $ 3,523 $ 2,399
======== ========
Non-performing assets:
Non-accrual loans:
Commercial $ 1,237 $ 1,401
Commercial real estate 5,307 3,722
Residential real estate - 3,020
-------- --------
Total 6,544 8,143
Restructured loans - -
Real estate owned - -
-------- --------
Total non-performing assets $ 6,544 $ 8,143
======== ========
SIX MONTHS SIX MONTHS
ENDED ENDED
SELECTED ALLOWANCE FOR LOAN LOSS DATA JUNE 30, JUNE 30,
(IN THOUSANDS) 2010 2009
---------- ----------
UNAUDITED UNAUDITED
Balance at beginning of period $ 3,432 $ 1,133
Provision for loan losses 147 2,219
Charge-offs (net of recoveries) 150 -
------- --------
Balance, end of period $ 3,429 $ 3,352
======= ========
JUNE 30, DECEMBER 31,
SELECTED CAPITAL RATIOS FOR THE BANK 2010 2009
----------- -----------
UNAUDITED AUDITED
Shareholders' equity to total assets 5.5% 5.8%
Leverage ratio 7.1% 7.3%
Risk-based capital ratios:
Tier 1 8.6% 8.5%
Total Capital 10.8% 10.7%
THREE THREE SIX SIX
MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED
SELECTED INCOME STATEMENT DATA JUNE 30, JUNE 30, JUNE 30, JUNE 30,
(IN THOUSANDS EXCEPT PER SHARE DATA) 2010 2009 2010 2009
--------- --------- --------- ---------
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
Interest income $ 4,062 $ 3,617 $ 7,984 $ 6,968
Interest expense 1,171 1,605 2,293 3,132
Net interest income 2,891 2,012 5,691 3,836
Provision for loan losses 38 1,879 147 2,220
Income (loss) before income taxes 849 (1,845) 1,624 (2,192)
Net income (loss) 521 (1,096) 996 (1,294)
Preferred stock dividends 33 - 66 -
Net income (loss) available to
common shareholders 488 (1,096) 930 (1,294)
Earnings per share
Basic $ 0.27 $ (0.66) $ 0.51 $ (0.78)
Diluted $ 0.27 $ (0.66) $ 0.51 $ (0.78)
Weighted average shares outstanding
Basic 1,810 1,660 1,810 1,658
Diluted 1,822 1,660 1,816 1,658
FORWARD-LOOKING STATEMENTS
Cornerstone Financial Corporation (the "Company") may from time to time make
written or oral "forward-looking statements," including statements contained in
the Company's filings with the Securities and Exchange Commission (including
this Quarterly Report on Form 10-Q and the exhibits hereto), in its reports to
shareholders and in other communications by the Company, which are made in good
faith by the Company pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties, such as
statements of the Company's plans, objectives, expectations, estimates and
intentions that are subject to change based on various important factors (many
of which are beyond the Company's control). Forward-looking statements may be
identified by the use of words such as "expects," "subject," "believe," "will,"
"intends," "will be," or "would." The factors which could cause the Company's
financial performance to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward-looking
statements include those items listed under "Item 1A-Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2009 and the following
factors, among others: the strength of the United States economy in general and
the strength of the local economies in which the Company conducts operations;
the effects of, and changes in, trade, monetary and fiscal policies and laws,
including interest rate policies of the Board of Governors of the Federal
Reserve System ("Federal Reserve"); inflation; interest rates; market and
monetary fluctuations; the timely development of new products and services by
the Company and the perceived overall value of these products and services by
users, including the features, pricing and quality compared to competitors'
products and services; the success of the Company in gaining regulatory approval
of its products, services, dividends and of new branches, when required; the
impact of changes in financial services laws and regulations (including laws
concerning taxes, banking, securities and insurance); technological changes;
acquisitions; the ability to continue to effectively manage costs, including the
costs incurred in connection with the opening of new branches; changes in
consumer spending and saving habits; and the success of the Company at managing
the risks resulting from these factors.