Exhibit 99.1
FOR IMMEDIATE RELEASE CONTACT: KEITH WINCHESTER
November 8, 2010 856-439-0300
CORNERSTONE FINANCIAL CORPORATION
REPORTS FIFTH CONSECUTIVE QUARTER OF PROFITABILITY
Mount Laurel, NJ, November 8, 2010 -- Cornerstone Financial Corporation
(CFIC.OB), the holding company for Cornerstone Bank, reported today that net
income available to common shareholders for the third quarter of 2010 increased
by $177 thousand over the prior year's third quarter, to $446 thousand, or
$0.24 per diluted share, as compared to net income of $269 thousand, or $0.15
per share, for the same period in 2009. Net income for the quarter before
preferred stock dividends totaled $479 thousand, versus a net income of $269
thousand a year ago.
The improved quarterly performance for the three-month period compared to the
prior year period reflects an increase of $536 thousand in net interest income
and $275 thousand in non-interest income partially offset by an increase of
$104 thousand in the provision for loan losses and a charge of $203 thousand in
audit, legal and investment banking fees associated with a proposed capital
transaction terminated by the Company. This charge represented $0.07 per
diluted share. Without giving effect to this charge, the Company's operating
earnings available to common shareholders for the third quarter were $569
thousand or $0.31 per share as compared to net income of $488 thousand or $0.27
per share for the second quarter of 2010 and $442 thousand or $0.24 per share
for the first quarter of 2010. The net interest margin for the quarter
increased by 8 basis points to 3.57% as compared to 3.49% for the same period
in 2009.
For the nine month period ended September 30, 2010, Cornerstone Financial
Corporation reported net income available to common shareholders of $1.4
million, or $0.76 per diluted share, as compared to a net loss of $1.0 million,
or ($0.61) per share, for the same period in 2009. The change in net income for
the nine-month period reflects an increase of $2.4 million in net interest
income and $328 thousand in non-interest income, coupled with a reduction of
$1.9 million in the provision for loan losses, partially offset by an increase
of $504 thousand in non-interest expense and $1.7 million in income tax
expense. The net interest margin for the nine-month period ended June 30, 2010
increased by 42 basis points to 3.70% as compared to 3.28% for the same period
in 2009.
Total assets at September 30, 2010 were $367.5 million, an increase of $61.4
million or 20.1% over December 31, 2009. This change was primarily due to
increases in cash equivalents of $29.3 million, investments securities of $28.8
million and loans receivable net of $3.5 million.
Total deposits at September 30, 2010 were $309.8 million, an increase of $60.3
million or 24.2% from December 31, 2009. The increase in deposits was
attributable to a significant increase of $52.8 million in core deposits
(defined as all interest bearing deposit accounts other than certificate of
deposit accounts) coupled with an increase of $12.4 million in certificates of
deposit, partially offset by a decrease of $4.9 million in non-interest bearing
deposit accounts. This growth reflects our commitment to building strong
relationships with new and existing customers of the Bank.
Gross loans receivable at September 30, 2010, totaled $242.1 million, an
increase of $3.7 million or 1.6% from December 31, 2009. This increase was
attributable to increases in commercial loans of $1.8 million and commercial
real estate loans of $6.7 million. These increases were partially offset by
decreases in real estate loans secured by residential properties of $3.2
million and consumer loans of $1.5 million.
At September 30, 2010 our total non-performing assets were $11.7 million or
3.16% of our total assets, an increase of $1.2 million from non-performing
assets of $10.5 million or 3.44% of total assets at December 31, 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 deposit growth and operating results. The level of
profitability experienced this quarter represents our fifth consecutive quarter
of profitability and continues the
positive trend begun in the third quarter of 2009." Mr. Matteo added: "As
discussed above, excluding the charge associated with a proposed capital
transaction, the Company's operating earnings available to common shareholders
increased by $0.04 per share over the second quarter of 2010 and demonstrates
our core business continues to get stronger." Mr. Matteo continued, "We are
extremely pleased that we have been able to grow our net interest margin period
over period despite the extremely difficult economic environment."
Cornerstone Financial Corporation is a New Jersey based bank holding company
headquartered in Mount Laurel, New Jersey and is the holding company for
Cornerstone Bank ("the Bank"), 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 six additional branch offices located in Medford, New Jersey, Burlington,
New Jersey, Cherry Hill, New Jersey, Voorhees, New Jersey, Mount Laurel, New
Jersey and Marlton, New Jersey.
Set forth below is selected financial information concerning Cornerstone
Financial Corporation:
SELECTED BALANCE SHEET DATA SEPTEMBER 30, DECEMBER 31,
(In thousands) 2010 2009
------------ ------------
Unaudited Audited
Investments held to maturity $ 44,209 $ 48,059
Investments available for sale 32,689 -
Loans receivable 242,125 238,424
Allowance for loan losses 3,663 3,432
Total assets 367,529 306,144
Deposits 309,833 249,493
Advances from the Federal Home Loan Bank 25,000 29,883
Stockholders equity 19,391 17,813
SEPTEMBER 30, DECEMBER 31,
SELECTED CAPITAL RATIOS FOR THE BANK 2010 2009
------------ ------------
Unaudited Audited
Shareholders' equity to total assets 5.3% 5.8%
Leverage ratio 6.7% 7.3%
Risk-based capital ratios:
Tier 1 8.7% 8.5%
Total Capital 10.8% 10.7%
SELECTED NON-PERFORMING ASSET DATA SEPTEMBER 30, DECEMBER 31,
(In thousands) 2010 2009
------------ ------------
Non-performing assets: Unaudited Audited
Loans past due 90 days or more and accruing
Commercial $ 634 $ 634
Commercial real estate 270 1,765
Residential real estate 244 -
--------- ---------
Total loans past due 90 days or more and accruing $ 1,148 $ 2,399
--------- ---------
Non-accrual loans:
Commercial $ 1,232 $ 1,401
Commercial real estate 6,185 3,722
Construction 2,480 -
Residential real estate - 3,020
--------- ---------
Total 9,897 8,143
Impaired loans 654 -
Real estate owned - -
--------- ---------
Total non-performing assets $ 11,699 $ 10,542
========= =========
NINE MONTHS NINE MONTHS
ENDED ENDED
SELECTED ALLOWANCE FOR LOAN LOSS DATA SEPTEMBER 30, SEPTEMBER 30,
(In thousands) 2010 2009
------------- -------------
Unaudited Unaudited
Balance at beginning of period $ 3,432 $ 1,133
Provision for loan losses 382 2,351
Charge-offs (net of recoveries) 149 -
--------- ---------
Balance, end of period $ 3,663 $ 3,484
========= =========
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SELECTED INCOME STATEMENT DATA SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
(In thousands except per share data) 2010 2009 2010 2009
------------- ------------- ------------- --------------
Unaudited Unaudited Unaudited Unaudited
Interest income $ 4,069 $ 3,873 $ 12,053 $ 10,841
Interest expense 1,162 1,502 3,455 4,634
Net interest income 2,907 2,371 8,598 6,207
Provision for loan losses 235 131 382 2,351
Income (loss) before income taxes 790 422 2,414 (1,770)
Net income (loss) 479 269 1,475 (1,025)
Preferred stock dividends 33 - 99 -
Net income (loss) available to common 446 269 1,376 (1,025)
shareholders
Earnings per share
Basic $ 0.25 $ 0.15 $ 0.76 $ (0.61)
Diluted $ 0.24 $ 0.15 $ 0.76 $ (0.61)
Weighted average shares outstanding
Basic 1,810 1,741 1,810 1,686
Diluted 1,833 1,741 1,821 1,686
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,
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.