Exhibit 99.1
Cornerstone Bancshares, Inc. Announces 2nd Quarter 2010 Financial Results
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--August 4, 2010--Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ) today announced the following:
Cornerstone Bancshares, Inc. (“Cornerstone”) reported positive net income for the second consecutive quarter of 2010, with a net income for 2010 of $362 thousand or $.06 per diluted share. This represents an increase of 110 percent compared to the first six months of 2009’s loss of $(3.5) million or $(0.54) per share. Cornerstone made a profit of $18,000 in net income for the second quarter of 2010, compared to a loss of $603 thousand for the same quarter of 2009. Cornerstone saw a 1.6 percent increase in its net interest margin driven by top-line interest revenue growth and lower interest expense.
Net charge-offs were $1.4 million for the second quarter of 2010, compared to $7.1 million for the second quarter of 2009. Cornerstone’s allowance for loan losses was $7.0 million or 2.2 percent of total loans as of June 30, 2010, compared to $5.9 million or 1.75 percent as of December 31, 2009. Nonperforming assets were $23.3 million or 4.4 percent of total assets at June 30, 2010, compared to $17.9 million or 3.4 percent at December 31, 2009. Since the end of the second quarter, the Bank has recovered with no loss $1.2 million from one of its non-accrual loans and expects to close the sale of a non-accrual loan in the amount of $1.5 million with no loss. The Bank has seen an increased interest in its OREO holdings and currently has $2 million under contract to close during the third quarter.
“Cornerstone continues to follow its strategic plan of reducing its risk profile by shrinking its loan portfolio, improving its loan mix and reducing its commercial real estate (CRE) concentrations,” said Cornerstone’s President and CEO Frank Hughes. “The bank has aggressively moved sub-standard CRE loans through the collection process and has ordered appraisals on these loans to accurately reflect their fair market value. This step places the Bank in a positive position to move forward once the capital campaign is completed.”
Cornerstone, in order to thrive in the new banking paradigm, has prepared a preferred stock offering in the amount of $15 million. The security will feature a 10 percent coupon, will be convertible into common stock and will have a cumulative dividend. The preferred stock will not be converted until five years and a 50 percent increase in common stock value over the preferred stock’s strike price.
“Serving our customers, our community and all of our Cornerstone stakeholders remains our top priority,” said Cornerstone Chairman Miller Welborn. “Our Board and management team are fully committed to this charge. And we’re confident that, as the economy continues to improve, Cornerstone will continue to strengthen and move forward in a more profitable direction for the future.”
In recognition of Cornerstone’s accomplishments, Hughes, who had been serving as interim Chief Executive Officer since November of 2009, was officially appointed Chief Executive Officer in addition to his role as President, at the July Board meeting.
Cornerstone is a single-bank holding company, with $520 million in assets, serving the Chattanooga, Tennessee MSA, with five branches throughout Chattanooga and one loan production office in Dalton, Georgia. Locally owned and locally operated, Cornerstone specializes in providing a comprehensive range of customized financial solutions for businesses and individuals.
Certain of the statements made in this release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of Cornerstone and its management regarding the company’s strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which Cornerstone operates, governmental regulations, the company’s competitive environment, cyclical and seasonal fluctuations in its operating results, and other risks discussed in Cornerstone’s Form 10-K and other filings with the Securities and Exchange Commission.
Cornerstone Bancshares, Inc. | |||||||||||
Second Quarter Financial Highlights | |||||||||||
June 30, 2010 and 2009 | |||||||||||
(Unaudited) | |||||||||||
(Amounts in thousands, except per share data) | 2010 | 2009 | % Change | ||||||||
Balance Sheet Data at June 30 | |||||||||||
Total assets | $ | 523,426 | $ | 464,499 | 12.7 | ||||||
Interest-earning assets | 492,537 | 440,505 | 11.8 | ||||||||
Loans | 318,796 | 360,615 | (11.6 | ) | |||||||
OREO and other foreclosed assets | 10,212 | 4,964 | 105.7 | ||||||||
Deposits | 400,648 | 337,040 | 18.9 | ||||||||
Interest-bearing liabilities | 91,355 | 92,877 | (1.6 | ) | |||||||
Shareholders' equity | 29,425 | 32,699 | (10.0 | ) | |||||||
Loan to deposit ratio | 79.57 | % | 106.99 | % | (25.6 | ) | |||||
Tier 1 Leverage Ratio (Bank) | 5.78 | % | 7.56 | % | (23.5 | ) | |||||
Total Risk-Based Capital Ratio (Bank) | 10.48 | % | 10.50 | % | (0.2 | ) | |||||
Outstanding shares (000s) | 6,500 | 6,500 | 0.0 | ||||||||
Book value per share | $ | 4.53 | $ | 5.03 | (10.0 | ) | |||||
Tangible book value per share | $ | 4.13 | $ | 4.64 | (11.0 | ) | |||||
Market value per share as of June 30 | $ | 2.15 | $ | 5.75 | (62.6 | ) | |||||
Loan Quality Data | |||||||||||
Nonaccruing loans | 13,084 | $ | 13,397 | (2.3 | ) | ||||||
Loans past due 90 days – accruing | - | - | - | ||||||||
Net charge-offs YTD | 1,418 | 9,594 | (85.2 | ) | |||||||
Allowance for loan losses | 6,967 | 7,383 | (5.6 | ) | |||||||
Allowance for loan losses to total loans | 2.19 | % | 2.05 | % | |||||||
Nonperforming assets to total assets | 4.45 | % | 3.95 | % | |||||||
Performance Data for the First Six Months | |||||||||||
Net income | 362 | (3,514 | ) | 110.3 | |||||||
Return on average assets | 0.27 | % | -3.06 | % | |||||||
Return on average equity | 4.98 | % | -41.52 | % | |||||||
Net interest margin | 3.52 | % | 3.48 | % | |||||||
Per share data: | |||||||||||
Net income – basic | $ | 0.06 | $ | (0.54 | ) | ||||||
Net income – diluted | $ | 0.06 | $ | (0.54 | ) | ||||||
Dividends | $ | - | $ | 0.10 | |||||||
Average shares (000s): | |||||||||||
Basic | 6,500 | 6,500 | |||||||||
Diluted | 6,500 | 6,500 | |||||||||
Cornerstone Bancshares, Inc. | ||||||||||||||||||||
Loan Loss Allowance and Asset Quality Review | ||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||
Second | First | Fourth | Third | Second | ||||||||||||||||
(Amounts in thousands) | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||
Allowance for loan losses | ||||||||||||||||||||
Balance at beginning of period | $ | 6,760 | $ | 5,905 | $ | 7,398 | $ | 7,383 | $ | 12,885 | ||||||||||
Provision for loan losses | 1,465 | 1,015 | 4,150 | 3,390 | 1,634 | |||||||||||||||
Net charge-offs | $ | (1,258 | ) | $ | (160 | ) | $ | (5,643 | ) | $ | (3,375 | ) | $ | (7,136 | ) | |||||
Balance at end of period | $ | 6,967 | $ | 6,760 | $ | 5,905 | $ | 7,398 | $ | 7,383 | ||||||||||
As a % of loans | 2.19 | % | 2.07 | % | 1.75 | % | 2.12 | % | 2.05 | % | ||||||||||
As a % of nonperforming loans | 53.25 | % | 79.83 | % | 80.24 | % | 90.90 | % | 55.11 | % | ||||||||||
As a % of nonperforming assets | 29.91 | % | 39.34 | % | 32.98 | % | 46.44 | % | 40.21 | % | ||||||||||
Net charge-offs as a % of loans (a) | 1.58 | % | 0.20 | % | 6.70 | % | 3.87 | % | 7.92 | % | ||||||||||
Risk element assets | ||||||||||||||||||||
Nonaccruing loans | $ | 13,084 | $ | 8,468 | $ | 7,360 | $ | 8,139 | $ | 13,397 | ||||||||||
Loans past due 90 days – accruing | - | - | - | - | - | |||||||||||||||
Total nonperforming loans | 13,084 | 8,468 | 7,360 | 8,139 | 13,397 | |||||||||||||||
Repossessed assets | 350 | 473 | 217 | 98 | 181 | |||||||||||||||
Other real estate owned | 9,862 | 8,241 | 10,327 | 7,695 | 4,783 | |||||||||||||||
Total nonperforming assets | $ | 23,296 | $ | 17,183 | $ | 17,904 | $ | 15,932 | $ | 18,361 | ||||||||||
Loans past due 30-89 days | $ | 6,655 | $ | 6,588 | $ | 5,027 | $ | 19,062 | $ | 9,636 | ||||||||||
Nonperforming loans as a % of loans | 4.10 | % | 2.60 | % | 2.19 | % | 2.33 | % | 3.71 | % | ||||||||||
Nonperforming assets as a % of loans and other real estate owned | 7.09 | % | 5.14 | % | 5.16 | % | 4.47 | % | 5.02 | % | ||||||||||
Total Loans | 318,796 | 325,948 | 336,692 | 349,050 | 360,615 | |||||||||||||||
(a) Annualized | ||||||||||||||||||||
Cornerstone Bancshares Inc. | |||||||||||||||||||||||
Net Interest Margin Analysis | |||||||||||||||||||||||
Taxable Equivalent Basis | |||||||||||||||||||||||
Three months ended | |||||||||||||||||||||||
June 30 | |||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Assets | 2010 | 2009 | |||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||
Earning assets: | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||
Loans, net of unearned income | $ | 321,455 | $ | 5,494 | 6.86 | % | $ | 370,524 | $ | 6,035 | 6.53 | % | |||||||||||
Investment securities | 151,220 | 1,216 | 3.44 | % | 56,849 | 386 | 2.91 | % | |||||||||||||||
Other earning assets | 33,957 | 22 | 0.26 | % | 11,089 | 7 | 0.24 | % | |||||||||||||||
Total earning assets | 506,631 | $ | 6,732 | 5.39 | % | 438,461 | $ | 6,428 | 5.90 | % | |||||||||||||
Allowance for loan losses | (6,797 | ) | (9,326 | ) | |||||||||||||||||||
Cash and other assets | 29,821 | 30,509 | |||||||||||||||||||||
TOTAL ASSETS | $ | 529,655 | $ | 459,645 | |||||||||||||||||||
Liabilities and Shareholder's Equity | |||||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||||
Interest bearing demand deposits | $ | 42,565 | $ | 36 | 0.34 | % | $ | 31,702 | $ | 30 | 0.38 | % | |||||||||||
Savings deposits | 9,090 | 12 | 0.51 | % | 8,101 | 10 | 0.51 | % | |||||||||||||||
MMDA's | 21,952 | 52 | 0.95 | % | 28,754 | 70 | 0.97 | % | |||||||||||||||
Time deposits of $100,000 or more | 89,648 | 468 | 2.10 | % | 57,502 | 481 | 3.36 | % | |||||||||||||||
Time deposits of $100,000 or less | 210,072 | 1,151 | 2.20 | % | 165,234 | 1,388 | 3.37 | % | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 23,807 | 32 | 0.54 | % | 22,479 | 44 | 0.78 | % | |||||||||||||||
Other borrowings | 69,833 | 760 | 4.36 | % | 72,454 | 768 | 4.25 | % | |||||||||||||||
Total interest bearing liabilities | 466,968 | 2,511 | 2.16 | % | 386,226 | 2,791 | 2.90 | % | |||||||||||||||
Net interest spread | $ | 4,221 | 3.24 | % | $ | 3,637 | 3.01 | % | |||||||||||||||
Noninterest bearing demand deposits | 39,061 | 42,752 | |||||||||||||||||||||
Accrued expenses and other liabilities | (5,480 | ) | (3,190 | ) | |||||||||||||||||||
Shareholders' equity | 29,105 | 33,857 | |||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 529,655 | $ | 459,645 | |||||||||||||||||||
Net yield on earning assets | 3.41 | % | 3.35 | % | |||||||||||||||||||
Taxable equivalent adjustment: | |||||||||||||||||||||||
Loans | 0 | 0 | |||||||||||||||||||||
Investment securities | 81 | 26 | |||||||||||||||||||||
Total adjustment | 81 | 26 | |||||||||||||||||||||
Cornerstone Bancshares, Inc. | |||||||||||||||||||||||
Net Interest Margin Analysis | |||||||||||||||||||||||
Taxable Equivalent Basis | |||||||||||||||||||||||
Six months ended | |||||||||||||||||||||||
June 30 | |||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Assets | 2010 | 2009 | |||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||
Earning assets: | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||
Loans, net of unearned income | $ | 325,715 | $ | 11,442 | 7.08 | % | $ | 377,095 | $ | 12,477 | 6.67 | % | |||||||||||
Investment securities | 143,072 | 2,346 | 3.52 | % | 54,976 | 800 | 3.12 | % | |||||||||||||||
Other earning assets | 39,927 | 45 | 0.23 | % | 12,517 | 15 | 0.24 | % | |||||||||||||||
Total earning assets | 508,714 | $ | 13,833 | 5.55 | % | 444,588 | $ | 13,292 | 6.05 | % | |||||||||||||
Allowance for loan losses | (6,397 | ) | (9,232 | ) | |||||||||||||||||||
Cash and other assets | 29,653 | 29,469 | |||||||||||||||||||||
TOTAL ASSETS | $ | 531,970 | $ | 464,825 | |||||||||||||||||||
Liabilities and Shareholder's Equity | |||||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||||
Interest bearing demand deposits | $ | 35,277 | $ | 66 | 0.38 | % | $ | 30,270 | $ | 56 | 0.37 | % | |||||||||||
Savings deposits | 8,910 | 23 | 0.51 | % | 7,960 | 20 | 0.51 | % | |||||||||||||||
MMDA's | 22,830 | 109 | 0.96 | % | 30,893 | 149 | 0.97 | % | |||||||||||||||
Time deposits of $100,000 or more | 84,708 | 895 | 2.13 | % | 58,559 | 1,010 | 3.48 | % | |||||||||||||||
Time deposits of $100,000 or less | 218,649 | 2,408 | 2.22 | % | 165,425 | 2,854 | 3.48 | % | |||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 23,723 | 68 | 0.57 | % | 23,509 | 98 | 0.84 | % | |||||||||||||||
Other borrowings | 71,063 | 1,539 | 4.37 | % | 71,946 | 1,474 | 4.13 | % | |||||||||||||||
Total interest bearing liabilities | 465,160 | 5,107 | 2.21 | % | 388,562 | 5,661 | 2.94 | % | |||||||||||||||
Net interest spread | $ | 8,726 | 3.33 | % | $ | 7,631 | 3.11 | % | |||||||||||||||
Noninterest bearing demand deposits | 43,610 | 42,907 | |||||||||||||||||||||
Accrued expenses and other liabilities | (5,688 | ) | (2,028 | ) | |||||||||||||||||||
Shareholders' equity | 28,888 | 35,384 | |||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 531,970 | $ | 464,825 | |||||||||||||||||||
Net yield on earning assets | 3.52 | % | 3.48 | % | |||||||||||||||||||
Taxable equivalent adjustment: | |||||||||||||||||||||||
Loans | 0 | 0 | |||||||||||||||||||||
Investment securities | 155 | 50 | |||||||||||||||||||||
Total adjustment | 155 | 50 | |||||||||||||||||||||
Cornerstone Bancshares Inc. | |||||||||||||||||||||||
Quarterly Earnings Summary | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
2010 | 2009 | Q2-10 / | |||||||||||||||||||||
Second | First | Fourth | Third | Second | Q2-09 | ||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | % Chg | ||||||||||||||||||
Interest Income | |||||||||||||||||||||||
Loans, including fees | $ | 5,494 | $ | 5,948 | $ | 5,907 | $ | 6,018 | $ | 6,035 | (9.0 | ) | |||||||||||
Investment securities | 1,216 | 1,129 | 683 | 358 | 386 | 215.1 | |||||||||||||||||
Other earning assets | 22 | 24 | 20 | 30 | 7 | 210.5 | |||||||||||||||||
Total interest income | 6,732 | 7,101 | 6,610 | 6,406 | 6,428 | 4.7 | |||||||||||||||||
Interest expense | |||||||||||||||||||||||
Deposits | 1,719 | 1,782 | 1,948 | 1,971 | 1,979 | (13.1 | ) | ||||||||||||||||
Short-term borrowings | 32 | 35 | 31 | 37 | 44 | (27.0 | ) | ||||||||||||||||
FHLB advances and other borrowings | 760 | 779 | 783 | 758 | 768 | (1.1 | ) | ||||||||||||||||
Total interest expense | 2,511 | 2,596 | 2,762 | 2,766 | 2,791 | (10.0 | ) | ||||||||||||||||
Net interest income | 4,221 | 4,505 | 3,848 | 3,640 | 3,637 | 16.1 | |||||||||||||||||
Provision for loan losses | 1,465 | 1,015 | 4,150 | 3,390 | 1,634 | (10.3 | ) | ||||||||||||||||
Net interest income after the provision for loan losses | 2,756 | 3,490 | (302 | ) | 250 | 2,003 | 37.6 | ||||||||||||||||
Noninterest income | |||||||||||||||||||||||
Customer Service Fees | 342 | 342 | 370 | 417 | 435 | (21.3 | ) | ||||||||||||||||
Other non-interest income | 29 | 31 | 28 | 29 | 148 | (80.4 | ) | ||||||||||||||||
Gain / (Loss) on sale of assets | 439 | (53 | ) | (1,035 | ) | (262 | ) | 147 | 198.6 | ||||||||||||||
Total noninterest income | 810 | 320 | (636 | ) | 184 |
| 730 | 11.0 | |||||||||||||||
Noninterest expense | |||||||||||||||||||||||
Salaries and employee benefits | 1,521 | 1,633 | 1,642 | 1,623 | 1,848 | (17.7 | ) | ||||||||||||||||
Net Occupancy and equipment | 369 | 355 | 371 | 383 | 388 | (5.0 | ) | ||||||||||||||||
Depository Insurance | 237 | 247 | 606 | 159 | 280 | (100.0 | ) | ||||||||||||||||
Other operating expense | 1,476 | 1,081 | 1,313 | 1,114 | 1,257 | 17.4 | |||||||||||||||||
Total noninterest expense | 3,603 | 3,317 | 3,931 | 3,279 |
| 3,773 | (4.5 | ) | |||||||||||||||
Income (loss) before income taxes | (37 | ) | 493 | (4,869 | ) | (2,844 | ) | (1,041 | ) | NM | |||||||||||||
Income tax (benefit) expense | (55 | ) | 150 | (1,904 | ) | (1,145 | ) | (437 | ) | NM | |||||||||||||
Net income (loss) | $ | 18 | $ | 344 | $ | (2,965 | ) | $ | (1,700 | ) | $ | (603 | ) | NM | |||||||||
Net income (loss) per share: | |||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.05 | $ | (0.46 | ) | $ | (0.26 | ) | $ | (0.09 | ) | NM | |||||||||
Diluted | $ | 0.00 | $ | 0.05 | $ | (0.46 | ) | $ | (0.26 | ) | $ | (0.09 | ) | NM | |||||||||
Average basic shares (000s) (1) | 6,500 | 6,500 | 6,500 | 6,500 | 6,500 | NM | |||||||||||||||||
Average diluted shares (000s) (1) | 6,500 | 6,500 | 6,500 | 6,500 | 6,500 | NM | |||||||||||||||||
Performance Ratios | |||||||||||||||||||||||
Return on average equity | 0.25 | % | 4.80 | % | -38.13 | % | -20.70 | % | -7.13 | % | NM | ||||||||||||
Return on average assets | 0.01 | % | 0.26 | % | -2.28 | % | -1.39 | % | -0.52 | % | NM | ||||||||||||
Net interest margin | 3.41 | % | 3.64 | % | 3.24 | % | 3.18 | % | 3.35 | % | NM | ||||||||||||
Average equity | 29,105 | 28,668 | 31,104 | 32,838 | 33,857 | (14.0 | ) | ||||||||||||||||
Average assets | 529,655 | 534,312 | 519,520 | 488,870 | 459,645 | 15.2 | |||||||||||||||||
Average interest-earning assets | 506,631 | 510,386 | 499,047 | 454,058 | 438,461 | 15.5 | |||||||||||||||||
NM=Not Material | |||||||||||||||||||||||
(1) The 2009 average number of common shares outstanding have been retroactively adjusted to reflect two stock dividends that occurred during 2009. | |||||||||||||||||||||||
Cornerstone Bancshares, Inc. | |||||||||||||
Loan Stratification | |||||||||||||
2010 | 2009 | ||||||||||||
| Second | % of | Second | % of | % Dollar | ||||||||
(Amounts in thousands) | Quarter | Total | Quarter | Total | Change | ||||||||
Non-residential real estate | |||||||||||||
Owner occupied | $ | 73,124 | 22.9 | $ | 84,902 | 23.5 | (13.9 | ) | |||||
Non-owner occupied | 71,767 | 22.5 | 70,246 | 19.5 | 2.2 | ||||||||
Multi-family real estate | 12,957 | 4.1 | 13,479 | 3.7 | (3.9 | ) | |||||||
1-4 family Construction | 5,671 | 1.8 | 10,894 | 3.0 | (47.9 | ) | |||||||
Commercial land and lot development | 27,604 | 8.7 | 50,026 | 13.9 | (44.8 | ) | |||||||
Total non-residential real estate | 191,123 | 60.0 | 229,547 | 63.7 | (16.7 | ) | |||||||
Residential real estate | |||||||||||||
First Mortgage – 1-4 family | 41,511 | 13.0 | 42,015 | 11.7 | (1.2 | ) | |||||||
Second Mortgage - 1-4 family | 5,165 | 1.6 | 3,570 | 1.0 | 44.7 | ||||||||
Home equity lines | 11,012 | 3.5 | 13,077 | 3.6 | (15.8 | ) | |||||||
Total residential real estate | 57,688 | 18.1 | 58,662 | 16.3 | (1.7 | ) | |||||||
Total real estate loans | 248,811 | 78.0 | 288,209 | 79.9 | (13.7 | ) | |||||||
Commercial | 57,790 | 18.1 | 65,328 | 18.1 | (11.5 | ) | |||||||
Agricultural & other | 8,522 | 2.7 | 2,387 | 0.7 | 257.0 | ||||||||
Consumer | 3,673 | 1.2 | 4,691 | 1.3 | (21.7 | ) | |||||||
Total loans, net of unearned fees | $ | 318,796 | 100.0 | $ | 360,615 | 100.0 | (11.6 | ) | |||||
Cornerstone Bancshares, Inc. | ||||||||||||
Consolidated Balance Sheets | ||||||||||||
Unaudited | ||||||||||||
June 30, | December 31, | |||||||||||
ASSETS | 2010 | 2009 | ||||||||||
Cash and due from banks | $ | 43,690,546 | $ | 38,202,205 | ||||||||
Securities available for sale | 129,610,261 | 124,415,318 | ||||||||||
Securities held to maturity | 114,705 | 135,246 | ||||||||||
Federal Home Loan Bank stock, at cost | 2,322,900 | 2,229,200 | ||||||||||
Loans, net of allowance for loan losses of $6,967,292 at June 30, 2010 and $5,905,054 at December 31, 2009 | 311,828,256 | 330,787,382 | ||||||||||
Bank premises and equipment, net | 7,659,025 | 8,098,059 | ||||||||||
Accrued interest receivable | 1,662,436 | 1,520,699 | ||||||||||
Goodwill and amortizable intangibles | 2,587,316 | 2,579,211 | ||||||||||
Foreclosed assets | 10,212,411 | 10,327,297 | ||||||||||
Other assets | 13,738,466 | 14,109,769 | ||||||||||
Total Assets | $ | 523,426,322 | $ | 532,404,386 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Deposits: | ||||||||||||
Noninterest-bearing demand deposits | $ | 47,663,569 | $ | 41,971,956 | ||||||||
Interest-bearing demand deposits | 36,802,797 | 26,533,329 | ||||||||||
Savings deposits and money market accounts | 31,893,781 | 31,029,587 | ||||||||||
Time deposits of $100,000 or more | 109,225,781 | 91,064,094 | ||||||||||
Time deposits of less than $100,000 | 175,062,529 | 214,143,147 | ||||||||||
Total deposits | 400,648,457 | 404,742,113 | ||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 24,105,165 | 26,321,885 | ||||||||||
Federal Home Loan Bank advances and other borrowing | 67,250,000 | 72,350,000 | ||||||||||
Accrued interest payable | 374,582 | 351,360 | ||||||||||
Other liabilities | 1,623,449 | 801,549 | ||||||||||
Total Liabilities | 494,001,653 | 504,566,907 | ||||||||||
Stockholders' Equity | ||||||||||||
Preferred stock - no par value; 2,000,000 shares authorized; no shares issued | - | - | ||||||||||
Common stock - $l.00 par value; 10,000,000 shares authorized; 6,709,199 issued in 2010 and 2009; 6,500,396 outstanding in 2010 and 2009 | 6,500,396 | 6,500,396 | ||||||||||
Additional paid-in capital | 21,199,992 | 21,162,686 | ||||||||||
Retained earnings | 786,787 | 424,854 | ||||||||||
Accumulated other comprehensive income | 937,494 | (250,457 | ) | |||||||||
Total Stockholders' Equity | 29,424,669 | 27,837,479 | ||||||||||
Total Liabilities and Stockholders' Equity | $ | 523,426,322 | $ | 532,404,386 | ||||||||
Cornerstone Bancshares, Inc. | ||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||
Loans, including fees | $ | 5,493,946 | $ | 6,035,104 | $ | 11,442,192 | $ | 12,477,209 | ||||||||||||||
Investment securities | 1,216,300 | 386,065 | 2,345,579 | 800,126 | ||||||||||||||||||
Federal funds sold & other earning assets | 21,732 | 6,697 | 45,393 | 14,646 | ||||||||||||||||||
Total interest income | 6,731,978 | 6,427,866 | 13,833,164 | 13,291,981 | ||||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||||
Time deposits $100,000 or more | 588,314 | 480,917 | 1,134,340 | 1,010,094 | ||||||||||||||||||
Other deposits | 1,130,535 | 1,498,072 | 2,366,259 | 3,079,687 | ||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 32,142 | 43,880 | 67,557 | 97,929 | ||||||||||||||||||
FHLB advances and other borrowing | 759,803 | 768,199 | 1,539,000 | 1,474,035 | ||||||||||||||||||
Total interest expense | 2,510,794 | 2,791,068 | 5,107,156 | 5,661,745 | ||||||||||||||||||
Net interest income before provision for loan losses | 4,221,184 | 3,636,798 | 8,726,008 | 7,630,236 | ||||||||||||||||||
Provision for loan losses | 1,465,000 | 1,633,898 | 2,480,000 | 7,358,898 | ||||||||||||||||||
Net interest income after the provision for loan losses | 2,756,184 | 2,002,900 | 6,246,008 | 271,338 | ||||||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||||
Customer service fee | 342,126 | 434,595 | 684,040 | 842,738 | ||||||||||||||||||
Other noninterest income | 29,273 | 149,083 | 60,195 | 184,915 | ||||||||||||||||||
Net gains / (losses) from sale of loans and other assets | 438,886 | 146,613 | 386,195 | (34,248 | ) | |||||||||||||||||
Total noninterest income | 810,285 | 730,291 | 1,130,430 | 993,405 | ||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||
Salaries and employee benefits | 1,521,216 | 1,848,452 | 3,154,560 | 3,690,127 | ||||||||||||||||||
Net occupancy and equipment expense | 368,506 | 387,897 | 723,689 | 796,836 | ||||||||||||||||||
Depository insurance | 237,499 | 279,551 | * | 484,836 | 341,277 | * | ||||||||||||||||
Other operating expense | 1,476,201 | 1,257,459 | 2,556,818 | 2,237,861 | ||||||||||||||||||
Total noninterest expense | 3,603,422 | 3,773,359 | 6,919,903 | 7,066,101 | ||||||||||||||||||
Income / (loss) before provision for income taxes | (36,953 | ) | (1,040,168 | ) | 456,535 | (5,801,358 | ) | |||||||||||||||
Provision / (benefit) for income taxes | (55,099 | ) | (437,369 | ) | 94,602 | (2,287,056 | ) | |||||||||||||||
NET INCOME / (LOSS) | $ | 18,146 | $ | (602,799 | ) | $ | 361,933 | $ | (3,514,302 | ) | ||||||||||||
EARNINGS / (LOSS) PER COMMON SHARE | ||||||||||||||||||||||
Basic net income / (loss) per common share | $ | - | $ | (0.09 | ) | $ | 0.06 | $ | (0.54 | ) | ||||||||||||
Diluted net income / (loss) per common share | $ | - | $ | (0.09 | ) | $ | 0.06 | $ | (0.54 | ) | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | - | $ | 0.03 | $ | - | $ | 0.10 | ||||||||||||||
* Includes Special one time Assessment on June 30, 2009 in the amount of $213,151 | ||||||||||||||||||||||
Cornerstone Bancshares, Inc. | |||||||||||||||||||
Consolidated Statement of Changes in Stockholders' Equity - Unaudited | |||||||||||||||||||
For the three months ended June 30, 2010 | |||||||||||||||||||
Additional | Other | Total | |||||||||||||||||
Comprehensive | Common | Paid-in | Retained | Comprehensive | Stockholders' | ||||||||||||||
Income | Stock | Capital | Earnings | Income | Equity | ||||||||||||||
BALANCE, December 31, 2009 | $ | 6,500,396 | $ | 21,162,686 | $ | 424,854 | $ | (250,457 | ) | $ | 27,837,479 | ||||||||
Employee compensation stock option expense | - | 37,306 | - | - | 37,306 | ||||||||||||||
Comprehensive income: | |||||||||||||||||||
Net income | $ | 361,933 | - | - | 361,933 | - | 361,933 | ||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||
Unrealized holding gains on securities available for sale, net of reclassification adjustment | 1,187,951 | - | - | - | 1,187,951 | 1,187,951 | |||||||||||||
Total comprehensive income | $ | 1,549,884 | |||||||||||||||||
BALANCE, June 30, 2010 | $ | 6,500,396 | $ | 21,199,992 | $ | 786,787 | $ | 937,494 | $ | 29,424,669 |
CONTACT:
Cornerstone Bancshares, Inc.
Frank Hughes, President and CEO, 423-385-3009