United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
| x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2010 |
| o | TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to . |
Commission File Number: 000-30497
(Exact name of small business issuer as specified in its charter)
| Tennessee | 62-1173944 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| 835 Georgia Avenue Chattanooga, Tennessee | 37402 | |
| (Address of principal executive offices) | (Zip Code) | |
| 423-385-3000 | Not Applicable | |
(Registrant’s telephone number, including area code) | (Former name, former address and former fiscal year, if changes since last report) |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
As of July 30, 2010 there were 6,500,396 shares of common stock, $1.00 par value per share, issued and outstanding.
EXPLANATORY NOTE
Cornerstone Bancshares, Inc. (“Cornerstone”) is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment”) with respect to its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2010, as filed with the Securities and Exchange Commission on August 16, 2010 (the “Original Filing”). During the Edgarizing process, Cornerstone’s Consolidated Statements of Cash Flows was inadvertently omitted from the Form 10-Q filed with the Securities and Exchange Commission. To correct this oversight Cornerstone is filing this Form 10-Q/A which includes the Consolidated Statements of Cash Flows as of June 30, 2010 and 2009.
Except as described above, the Original Filing has not been amended, updated or otherwise modified. The Original Filing, as amended by this Amendment, continues to speak as of the date of the Original Filing and does not reflect events occurring after the filing of the Original Filing or update or otherwise modify any related or other disclosures, including forward-looking statements. Accordingly, this Amendment should be read in conjunction with Cornerstone’s Original Filing.
Cornerstone Bancshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows
| Unaudited | ||||||||
| Six months ended June 30, | ||||||||
| 2010 | 2009 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income / (loss) | $ | 361,933 | $ | (3,514,302 | ) | |||
| Adjustments to reconcile net income / (loss) to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation and amortization | 233,564 | 500,824 | ||||||
| Provision for loan losses | 2,480,000 | 7,358,898 | ||||||
| Stock compensation expense | 37,306 | 109,396 | ||||||
| Net (gains) / losses on sales of loans and other assets | (386,195 | ) | 34,248 | |||||
| Deferred income taxes | (624,201 | ) | 670,271 | |||||
| Changes in other operating assets and liabilities: | ||||||||
| Net change in loans held for sale | (371,000 | ) | (545,700 | ) | ||||
| Accrued interest receivable | (141,737 | ) | 356,707 | |||||
| Accrued interest payable | 23,222 | 181,782 | ||||||
| Other assets and liabilities | 650,618 | (3,368,156 | ) | |||||
| Net cash provided by operating activities | 2,263,510 | 1,783,968 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from security transactions: | ||||||||
| Securities available for sale | 50,499,955 | 27,916,257 | ||||||
| Securities held to maturity | 20,266 | 14,603 | ||||||
| Purchase of securities available for sale | (53,138,697 | ) | (29,228,921 | ) | ||||
| Purchase of Federal Home Loan Bank stock | (93,700 | ) | (41,700 | ) | ||||
| Loan originations and principal collections, net | 12,633,191 | 14,950,859 | ||||||
| Purchase of bank premises and equipment | (2,299 | ) | (92,128 | ) | ||||
| Proceeds from sale of bank premises and equipment | 199,664 | - | ||||||
| Proceeds from sale of other real estate and other assets | 4,516,827 | 1,698,445 | ||||||
| Net cash provided by investing activities | 14,635,207 | 15,217,415 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Net (decrease) increase in deposits | (4,093,656 | ) | 10,456,476 | |||||
| Net (decrease) in federal funds purchased and | ||||||||
| securities sold under agreements to repurchase | (2,216,720 | ) | (15,263,767 | ) | ||||
| Net (payments on) proceeds from Federal Home Loan Bank | ||||||||
| advances and other borrowings | (5,100,000 | ) | 1,100,000 | |||||
| Payment of dividends | - | (884,760 | ) | |||||
| Net cash (used in) financing activities | (11,410,376 | ) | (4,592,051 | ) | ||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 5,488,341 | 12,409,332 | ||||||
| CASH AND CASH EQUIVALENTS, beginning of period | 38,202,205 | 21,897,390 | ||||||
| CASH AND CASH EQUIVALENTS, end of period | $ | 43,690,546 | $ | 34,306,722 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for interest | $ | 5,083,934 | $ | 5,479,963 | ||||
| Cash paid during the period for taxes | 500,000 | - | ||||||
| NONCASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Acquisition of real estate through foreclosure | $ | 4,365,571 | $ | 3,594,574 | ||||
The Notes to Consolidated Financial Statements are an integral part of these statements.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Cornerstone Bancshares, Inc. | |||
| Date: October 4, 2010 | /s/ Nathaniel F. Hughes | ||
Nathaniel F. Hughes, President and Chief Executive Officer (principal executive officer) | |||
| Date: October 4, 2010 | /s/ Gary W. Petty, Jr. | ||
Gary W. Petty, Jr. Senior Vice President and Chief Financial Officer (principal financial officer and accounting officer) | |||
EXHIBIT INDEX
| Exhibit Number | Description | |
| 31 | Certifications under Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32 | Certifications under Section 906 of the Sarbanes-Oxley Act of 2002. |