Exhibit 99.1
Cornerstone Bancshares, Inc. Reports Fourth Quarter 2010 Earnings
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--March 4, 2011--Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ) today announced the following:
Cornerstone Bancshares, Inc. today reported a net loss available to common shareholders of $(4.74) million, or $(0.73) per diluted common share for 2010, a 42.1 percent improvement from the $(8.18) million loss, or $(1.26) per diluted common share reported for 2009. The 2010 loss includes a $2.5 million write-off of goodwill from the purchase of the former Bank of East Ridge in 1997. The goodwill is an accounting adjustment and is a “non cash item.” Cornerstone’s earnings without the goodwill write-off would have been a net loss of approximately $(2.2) million or $(0.34) per diluted share for 2010. During the fourth quarter of 2010, management elected to adjust its allowance for loan and lease losses (“ALLL”) methodology to a more conservative approach. The change in methodology resulted in a fourth quarter 2010 provision expense of approximately $3.2 million. The provision expense in the fourth quarter of 2010 brought the total provision expense for 2010 to $7.3 million, which brought Cornerstone’s ALLL to approximately $9.1 million as of December 31, 2010. The $9.1 million in ALLL is comprised, in part, of approximately $3.7 million for loans identified with specific impairment while the remaining $5.4 million is allocated to the general loan portfolio.
“I am greatly encouraged by the positive trends and significant improvements made year-over-year,” said Cornerstone’s President Frank Hughes. “We had positive cash-flow from operating activities all four quarters of 2010, which was a dramatic turnaround from the previous year.” he said. “Given our bank’s conservative loan loss allowance approach and our improved asset quality position, management expects minimal loan loss provision expense for 2011, which should translate positively to net income and greater value for all of Cornerstone’s stakeholders.”
Specific trends include:
- Continued improvement in asset quality
- Significant reduction in past-dues
- Loan loss allowance above that of peer banks
- Increase in net interest margin
Total loans were $285.25 million at yearend, which were managed down by $51 million from the yearend of 2009. Construction and development loans, the highest risk-weighted category of loan classification, were down by more than 50 percent from the previous year, ($50 million in 2009 to $23 million in 2010). In addition, $1.645 million of OREO property sold in the fourth quarter of 2010, and nearly 50 percent of the OREO properties are currently rented or contracted to sell by the end of the second quarter of 2011. Past-due loans, which represent the first step in the collection cycle, decreased from $5.0 million at the end of 2009 to $2.3 million at the end of 2010, an amount that compares very favorably with peer banks of equal size.
In an effort to fortify its capital position, Cornerstone launched a 10% cumulative, convertible preferred stock offering in the third quarter of 2010. After the offering period ends June 30, 2011, the preferred stock will be traded publicly on the Over-The-Counter Bulletin Board, under the ticker symbol CSBQP.
“With the entry of Volkswagen, Amazon, Alstom Power, Wacker Chemical and other major corporations in our region, the local economic forecast is incredibly bright,” said Chairman Miller Welborn. “Our goal is to further strengthen Cornerstone’s foundations, so that we are solidly positioned to take advantage of the opportunities that lie ahead, for many years to come.”
Cornerstone is a single-bank holding company, with $440 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. and Subsidiary | |||||||||||||
Fourth Quarter Financial Highlights | |||||||||||||
December 31, 2010 and 2009 | |||||||||||||
(Unaudited) | |||||||||||||
(Amounts in thousands, except per common share data) | 2010 | 2009 | % Change | ||||||||||
Balance Sheet Data at December 31 | |||||||||||||
Total assets | $ | 441,499 | $ | 532,404 | (17.1 | ) | |||||||
Interest-earning assets | 419,431 | 500,174 | (16.1 | ) | |||||||||
Loans | 285,247 | 336,692 | (15.3 | ) | |||||||||
Foreclosed assets | 12,809 | 10,327 | 24.0 | ||||||||||
Deposits | 335,447 | 404,742 | (17.1 | ) | |||||||||
Other interest-bearing liabilities | 79,040 | 98,672 | (19.9 | ) | |||||||||
Shareholders' equity | 25,819 | 27,837 | (7.3 | ) | |||||||||
Loan to deposit ratio | 85.03 | % | 83.19 | % | 2.2 | ||||||||
Tier 1 Leverage Ratio (Bank) | 5.75 | % | 6.14 | % | (6.4 | ) | |||||||
Total Risk-Based Capital Ratio (Bank) | 10.06 | % | 9.52 | % | 5.7 | ||||||||
Outstanding shares (000s) | 6,500 | 6,500 | 0.0 | ||||||||||
Book value per common share | $ | 3.55 | $ | 4.28 | (17.1 | ) | |||||||
Tangible book value per common share | $ | 3.55 | $ | 3.89 | (8.7 | ) | |||||||
Market value per common share as of December 31 | $ | 1.90 | $ | 2.10 | (9.5 | ) | |||||||
Loan Quality Data | |||||||||||||
Nonaccruing loans | 13,633 | $ | 7,360 | 85.2 | |||||||||
Loans past due 90 days – accruing | - | - | - | ||||||||||
Net charge-offs YTD | 4,064 | 18,612 | (78.2 | ) | |||||||||
Allowance for loan losses | 9,132 | 5,905 | 54.7 | ||||||||||
Allowance for loan losses to total loans | 3.20 | % | 1.75 | % | |||||||||
Nonperforming assets to total assets | 5.99 | % | 3.32 | % | |||||||||
Performance Data for the Year | |||||||||||||
Net loss available to Common Stockholders | $ | (4,742 | ) | $ | (8,179 | ) | 42.0 | ||||||
Return on average assets | -1.26 | % | -2.25 | % | |||||||||
Return on average equity | -21.20 | % | -32.40 | % | |||||||||
Net interest margin | 3.43 | % | 3.27 | % | |||||||||
Per common share data: | |||||||||||||
Net income – basic | $ | (0.73 | ) | $ | (1.26 | ) | |||||||
Net income – diluted | $ | (0.73 | ) | $ | (1.26 | ) | |||||||
Common Dividends | $ | - | $ | 0.10 | |||||||||
Preferred Dividends | $ | 0.63 | $ | - | |||||||||
Average shares (000s): | |||||||||||||
Basic Common Stock | 6,500 | 6,500 | |||||||||||
Diluted Common Stock | 6,500 | 6,500 | |||||||||||
Preferred Stock | 137 | - |
Cornerstone Bancshares, Inc. and Subsidiary | |||||||||||||||||||||||||||
Loan Loss Allowance and Asset Quality Review | |||||||||||||||||||||||||||
2010 | 2009 | ||||||||||||||||||||||||||
Fourth | Third | Second | First | Fourth | |||||||||||||||||||||||
(Amounts in thousands) | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||
Allowance for loan losses | |||||||||||||||||||||||||||
Balance at beginning of period | $ | 6,271 | $ | 6,967 | $ | 6,760 | $ | 5,905 | $ | 7,398 | |||||||||||||||||
Provision for loan losses | 4,130 | 681 | 1,465 | 1,015 | 4,150 | ||||||||||||||||||||||
Net charge-offs | $ | (1,269 | ) | $ | (1,377 | ) | $ | (1,258 | ) | $ | (160 | ) | $ | (5,643 | ) | ||||||||||||
Balance at end of period | $ | 9,132 | $ | 6,271 | $ | 6,967 | $ | 6,760 | $ | 5,905 | |||||||||||||||||
As a % of loans | 3.20 | % | 2.15 | % | 2.19 | % | 2.07 | % | 1.75 | % | |||||||||||||||||
As a % of nonperforming loans | 63.06 | % | 38.97 | % | 36.81 | % | 61.21 | % | 59.65 | % | |||||||||||||||||
As a % of nonperforming assets | 33.46 | % | 21.25 | % | 23.91 | % | 39.21 | % | 28.88 | % | |||||||||||||||||
Net charge-offs as a % of loans (a) | 1.78 | % | 1.89 | % | 1.58 | % | 0.20 | % | 6.70 | % | |||||||||||||||||
Risk element assets | |||||||||||||||||||||||||||
Nonaccruing loans | $ | 13,633 | $ | 10,237 | $ | 13,030 | $ | 8,468 | $ | 7,360 | |||||||||||||||||
Accruring Troubled Debt Restructuted | $ | 848 | $ | 5,853 | $ | 5,895 | $ | 2,576 | $ | 2,540 | |||||||||||||||||
Loans past due 90 days – accruing | - | - | - | - | - | ||||||||||||||||||||||
Total nonperforming loans | 14,481 | 16,090 | 18,925 | 11,044 | 9,900 | ||||||||||||||||||||||
Repossessed assets | 150 | 285 | 350 | 473 | 217 | ||||||||||||||||||||||
Other real estate owned (b)(c)(d) | 12,659 | 13,142 | 9,862 | 8,241 | 10,327 | ||||||||||||||||||||||
Total nonperforming assets | $ | 27,290 | $ | 29,517 | $ | 29,137 | $ | 19,758 | $ | 20,444 | |||||||||||||||||
Loans past due 30-89 days | $ | 2,306 | $ | 1,500 | $ | 6,655 | $ | 6,588 | $ | 5,027 | |||||||||||||||||
Nonperforming loans as a % of loans | 5.08 | % | 5.51 | % | 5.94 | % | 2.60 | % | 2.19 | % | |||||||||||||||||
Nonperforming assets as a % of loans and other real estate owned | 9.16 | % | 9.67 | % | 8.87 | % | 5.14 | % | 5.16 | % | |||||||||||||||||
Total Loans | 285,247 | 292,046 | 318,796 | 325,948 | 336,692 | ||||||||||||||||||||||
(a) Annualized | |||||||||||||||||||||||||||
(b) Properties sold since quarter-end | $ | 1,645 | |||||||||||||||||||||||||
(c) Properties rented | $ | 3,526 | |||||||||||||||||||||||||
(d) Properties under contract to sell | $ | 1,599 |
Cornerstone Bancshares Inc. and Subsidiary | ||||||||||||||||||||||||||
Net Interest Margin Analysis | ||||||||||||||||||||||||||
Taxable Equivalent Basis | ||||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||||
December 31 | ||||||||||||||||||||||||||
(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 | $ | 288,923 | $ | 4,896 | 6.72 | % | 344,606 | $ | 5,906 | 6.80 | % | |||||||||||||||
Investment securities | 112,570 | 534 | 2.17 | % | 90,849 | 683 | 3.24 | % | ||||||||||||||||||
Other earning assets | 24,296 | 15 | 0.25 | % | 63,592 | 20 | 0.13 | % | ||||||||||||||||||
Total earning assets | 425,789 | $ | 5,445 | 5.15 | % | 499,047 | $ | 6,609 | 5.30 | % | ||||||||||||||||
Allowance for loan losses | (6,366 | ) | (7,225 | ) | ||||||||||||||||||||||
Cash and other assets | 34,242 | 27,698 | ||||||||||||||||||||||||
TOTAL ASSETS | $ | 453,665 | $ | 519,520 | ||||||||||||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 27,036 | $ | 20 | 0.30 | % | $ | 25,757 | $ | 21 | 0.33 | % | ||||||||||||||
Savings deposits | 9,418 | 12 | 0.51 | % | 8,580 | 11 | 0.51 | % | ||||||||||||||||||
MMDA's | 23,539 | 58 | 0.97 | % | 23,346 | 56 | 0.95 | % | ||||||||||||||||||
Time deposits | 248,805 | 1,149 | 1.83 | % | 305,134 | 1,860 | 2.42 | % | ||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 20,198 | 28 | 0.55 | % | 20,640 | 38 | 0.74 | % | ||||||||||||||||||
Other borrowings | 60,251 | 651 | 4.29 | % | 72,350 | 775 | 4.25 | % | ||||||||||||||||||
Total interest bearing liabilities | 389,247 | 1,918 | 1.96 | % | 455,807 | 2,761 | 2.40 | % | ||||||||||||||||||
Net interest spread | $ | 3,527 | 3.19 | % | $ | 3,848 | 2.90 | % | ||||||||||||||||||
Noninterest bearing demand deposits | 32,468 | 38,028 | ||||||||||||||||||||||||
Accrued expenses and other liabilities | 830 | (5,420 | ) | |||||||||||||||||||||||
Shareholders' equity | 31,120 | 31,105 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 453,665 | $ | 519,520 | ||||||||||||||||||||||
Net yield on earning assets | 3.36 | % | 3.11 | % | ||||||||||||||||||||||
Taxable equivalent adjustment: | ||||||||||||||||||||||||||
Loans | 0 | 0 | ||||||||||||||||||||||||
Investment securities | 81 | 59 | ||||||||||||||||||||||||
Total adjustment | 81 | 59 |
Cornerstone Bancshares, Inc. and Subsidiary | ||||||||||||||||||||||||||
Net Interest Margin Analysis | ||||||||||||||||||||||||||
Taxable Equivalent Basis | ||||||||||||||||||||||||||
Twelve months ended | ||||||||||||||||||||||||||
December 31 | ||||||||||||||||||||||||||
(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 | $ | 311,407 | $ | 21,498 | 6.90 | % | $ | 363,146 | $ | 24,402 | 6.72 | % | ||||||||||||||
Investment securities | 128,795 | 3,633 | 3.06 | % | 63,854 | 1,840 | 3.10 | % | ||||||||||||||||||
Other earning assets | 36,319 | 80 | 0.22 | % | 40,085 | 66 | 0.16 | % | ||||||||||||||||||
Total earning assets | 476,521 | $ | 25,211 | 5.36 | % | 467,085 | $ | 26,308 | 5.66 | % | ||||||||||||||||
Allowance for loan losses | (6,454 | ) | (8,088 | ) | ||||||||||||||||||||||
Cash and other assets | 31,277 | 25,672 | ||||||||||||||||||||||||
TOTAL ASSETS | $ | 501,344 | $ | 484,669 | ||||||||||||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 32,338 | $ | 111 | 0.34 | % | $ | 27,864 | $ | 98 | 0.35 | % | ||||||||||||||
Savings deposits | 9,198 | 47 | 0.51 | % | 8,206 | 42 | 0.51 | % | ||||||||||||||||||
MMDA's | 23,042 | 222 | 0.96 | % | 27,063 | 261 | 0.96 | % | ||||||||||||||||||
Time deposits | 281,251 | 5,839 | 2.08 | % | 256,551 | 7,608 | 2.97 | % | ||||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 22,716 | 127 | 0.56 | % | 21,624 | 174 | 0.80 | % | ||||||||||||||||||
Other borrowings | 66,208 | 2,856 | 4.31 | % | 72,150 | 3,006 | 4.17 | % | ||||||||||||||||||
Total interest bearing liabilities | 434,753 | 9,202 | 2.12 | % | 413,458 | 11,189 | 2.71 | % | ||||||||||||||||||
Net interest spread | $ | 16,009 | 3.24 | % | $ | 15,119 | 2.96 | % | ||||||||||||||||||
Noninterest bearing demand deposits | 39,104 | 40,816 | ||||||||||||||||||||||||
Accrued expenses and other liabilities | (2,333 | ) | (3,265 | ) | ||||||||||||||||||||||
Shareholders' equity | 29,820 | 33,660 | ||||||||||||||||||||||||
| ||||||||||||||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 501,344 | $ | 484,669 | ||||||||||||||||||||||
Net yield on earning assets | 3.43 | % | 3.27 | % | ||||||||||||||||||||||
Taxable equivalent adjustment: | ||||||||||||||||||||||||||
Loans | 0 | 0 | ||||||||||||||||||||||||
Investment securities | 314 | 139 | ||||||||||||||||||||||||
Total adjustment | 314 | 139 |
Cornerstone Bancshares Inc. and Subsidiary | |||||||||||||||||||||||||||||
Quarterly Earnings Summary | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
2010 | 2009 | Q4-10 / | |||||||||||||||||||||||||||
Fourth | Third | Second | First | Fourth | Q4-09 | ||||||||||||||||||||||||
(Amounts in thousands) | Quarter | Quarter | Quarter | Quarter | Quarter | % Chg | |||||||||||||||||||||||
Interest Income | |||||||||||||||||||||||||||||
Loans, including fees | $ | 4,896 | $ | 5,160 | $ | 5,494 | $ | 5,948 | $ | 5,907 | (17.1 | ) | |||||||||||||||||
Investment securities and interest bearing deposits | 534 | 754 | 1,216 | 1,129 | 683 | (21.8 | ) | ||||||||||||||||||||||
Other earning assets | 15 | 19 | 22 | 24 | 20 | (23.7 | ) | ||||||||||||||||||||||
Total interest income | 5,445 | 5,933 | 6,732 | 7,101 | 6,610 | (17.6 | ) | ||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||
Deposits | 1,239 | 1,478 | 1,719 | 1,782 | 1,948 | (36.4 | ) | ||||||||||||||||||||||
Short-term borrowings | 28 | 32 | 32 | 35 | 31 | (9.7 | ) | ||||||||||||||||||||||
FHLB advances and other borrowings | 651 | 666 | 760 | 779 | 783 | (16.9 | ) | ||||||||||||||||||||||
Total interest expense | 1,918 | 2,176 | 2,511 | 2,596 | 2,762 | (30.5 | ) | ||||||||||||||||||||||
Net interest income | 3,527 | 3,757 | 4,221 | 4,505 | 3,848 | (8.3 | ) | ||||||||||||||||||||||
Provision for loan losses | 4,130 | 681 | 1,465 | 1,015 | 4,150 | (0.5 | ) | ||||||||||||||||||||||
Net interest income after the provision for loan losses | (603 | ) | 3,076 | 2,756 | 3,490 | (302 | ) | 99.6 | |||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||||||||
Customer Service Fees | 280 | 309 | 342 | 342 | 370 | (24.3 | ) | ||||||||||||||||||||||
Other non-interest income | 63 | 34 | 29 | 31 | 29 | 116.7 | |||||||||||||||||||||||
Gain / (Loss) on sale of assets | (681 | ) | 544 | 439 | (53 | ) | (1,035 | ) | (34.2 | ) | |||||||||||||||||||
Total noninterest income | (338 | ) | 887 | 810 | 320 | (636 | ) | (46.9 | ) | ||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||||||||
Salaries and employee benefits | 1,515 | 1,525 | 1,521 | 1,633 | 1,642 | (7.8 | ) | ||||||||||||||||||||||
Net Occupancy and equipment | 380 | 397 | 369 | 355 | 371 | 2.5 | |||||||||||||||||||||||
Depository Insurance | 350 | 386 | 237 | 247 | 606 | (42.3 | ) | ||||||||||||||||||||||
Goodwill Impairment | 2541 | - | - | - | - | NM | |||||||||||||||||||||||
Other operating expense | 1,255 | 1,372 | 1,476 | 1,081 | 1,312 | (4.3 | ) | ||||||||||||||||||||||
Total noninterest expense | 6,041 | 3,680 | 3,603 | 3,316 | 3,931 | 53.7 | |||||||||||||||||||||||
Income (loss) before income taxes | (6,982 | ) | 283 | (37 | ) | 494 | (4,869 | ) | NM | ||||||||||||||||||||
Income tax (benefit) expense | (1,699 | ) | 69 | (55 | ) | 150 | (1,904 | ) | NM | ||||||||||||||||||||
Net income (loss) | $ | (5,283 | ) | $ | 214 | $ | 18 | $ | 344 | $ | (2,965 | ) | NM | ||||||||||||||||
Preferred stock dividends | 34 | ||||||||||||||||||||||||||||
Net income (loss) per common share: | |||||||||||||||||||||||||||||
Basic | $ | (0.82 | ) | $ | 0.03 | $ | 0.00 | $ | 0.05 | $ | (0.46 | ) | NM | ||||||||||||||||
Diluted | $ | (0.82 | ) | $ | 0.03 | $ | 0.00 | $ | 0.05 | $ | (0.46 | ) | 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 | -38.13 | % | 2.81 | % | 0.25 | % | 4.80 | % | -38.13 | % | NM | ||||||||||||||||||
Return on average assets | -2.28 | % | 0.17 | % | 0.01 | % | 0.26 | % | -2.28 | % | NM | ||||||||||||||||||
Net interest margin | 3.36 | % | 3.36 | % | 3.41 | % | 3.64 | % | 3.24 | % | NM | ||||||||||||||||||
Average equity | 31,120 | 30,355 | 29,105 | 28,668 | 31,104 | 0.1 | |||||||||||||||||||||||
Average assets | 453,665 | 488,771 | 529,655 | 534,312 | 519,520 | (12.7 | ) | ||||||||||||||||||||||
Average interest-earning assets | 425,789 | 458,213 | 506,631 | 510,386 | 499,047 | (14.7 | ) | ||||||||||||||||||||||
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. and Subsidiary | ||||||||||||||||||
Loan Stratification | ||||||||||||||||||
2010 | 2009 | |||||||||||||||||
(Amounts in thousands) | Fourth | % of | Fourth | % of | % Dollar | |||||||||||||
Quarter | Total | Quarter | Total | Change | ||||||||||||||
Non-residential real estate | ||||||||||||||||||
Owner occupied | $ | 64,895 | 22.8 | $ | 74,206 | 22.0 | (12.5 | ) | ||||||||||
Non-owner occupied | 65,415 | 22.9 | 76,004 | 22.6 | (13.9 | ) | ||||||||||||
Multi-family real estate | 12,319 | 4.3 | 12,770 | 3.8 | (3.5 | ) | ||||||||||||
1-4 family construction | 2,346 | 0.8 | 6,967 | 2.1 | (66.3 | ) | ||||||||||||
Commercial land and lot development | 20,795 | 7.3 | 42,858 | 12.7 | (51.5 | ) | ||||||||||||
Total non-residential real estate | 165,771 | 58.1 | 212,805 | 63.2 | (22.1 | ) | ||||||||||||
Residential real estate | ||||||||||||||||||
First Mortgage - 1-4 family | 39,935 | 14.0 | 39,538 | 11.7 | 1.0 | |||||||||||||
Second Mortgage - 1-4 family | 4,876 | 1.7 | 3,346 | 1.0 | 45.7 | |||||||||||||
Home equity lines | 10,185 | 3.6 | 10,797 | 3.2 | (5.7 | ) | ||||||||||||
Total residential real estate | 54,996 | 19.3 | 53,681 | 15.9 | 2.4 | |||||||||||||
Total real estate loans | 220,766 | 77.4 | 266,486 | 79.1 | (17.2 | ) | ||||||||||||
Commercial | 51,962 | 18.2 | 64,362 | 19.1 | (19.3 | ) | ||||||||||||
Agricultural & other | 9,213 | 3.2 | 1,712 | 0.5 | 438.1 | |||||||||||||
Consumer | 3,307 | 1.2 | 4,132 | 1.2 | (20.0 | ) | ||||||||||||
Total loans, net of unearned fees | $ | 285,247 | 100.0 | $ | 336,692 | 100.0 | (15.3 | ) |
Cornerstone Bancshares, Inc. and Subsidiary | ||||||||||||
Consolidated Balance Sheets | ||||||||||||
Unaudited | ||||||||||||
December 31, | December 31, | |||||||||||
ASSETS | 2010 | 2009 | ||||||||||
Cash and cash equivalents | $ | 22,981,952 | $ | 38,202,205 | ||||||||
Securities available for sale | 108,250,434 | 124,415,318 | ||||||||||
Securities held to maturity | 95,702 | 135,246 | ||||||||||
Federal Home Loan Bank stock, at cost | 2,322,900 | 2,229,200 | ||||||||||
Loans, net of allowance for loan losses of $9,132,171 at December 31, 2010 and $5,905,054 at December 31, 2009 | 276,114,617 | 330,787,382 | ||||||||||
Bank premises and equipment, net | 8,047,370 | 8,098,059 | ||||||||||
Accrued interest receivable | 1,326,480 | 1,520,699 | ||||||||||
Goodwill | - | 2,541,476 | ||||||||||
Foreclosed assets | 12,808,838 | 10,327,297 | ||||||||||
Other assets | 9,551,121 | 14,147,504 | ||||||||||
Total Assets | $ | 441,499,414 |
| $ | 532,404,386 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Deposits: | ||||||||||||
Noninterest-bearing demand deposits | $ | 28,980,043 | $ | 41,971,956 | ||||||||
Interest-bearing demand deposits | 24,834,214 | 26,533,329 | ||||||||||
Savings deposits and money market accounts | 34,041,672 | 31,029,587 | ||||||||||
Time deposits | 247,591,161 | 305,207,241 | ||||||||||
Total deposits | 335,447,090 | 404,742,113 | ||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 24,325,372 | 26,321,885 | ||||||||||
Federal Home Loan Bank advances and other borrowing | 54,715,000 | 72,350,000 | ||||||||||
Accrued interest payable | 176,761 | 351,360 | ||||||||||
Other liabilities | 1,016,038 | 801,549 | ||||||||||
Total Liabilities | 415,680,261 | 504,566,907 | ||||||||||
Stockholders' Equity | ||||||||||||
Preferred stock - no par value; 2,000,000 shares authorized; 136,620 shares issued and outstanding in 2010 | 2,727,424 | - | ||||||||||
Common stock - $1.00 par value; 20,000,000 shares authorized; 6,709,199 shares issued in 2010 and 2009; 6,500,396 shares outstanding in 2010 and 2009 | 6,500,396 | 6,500,396 | ||||||||||
Additional paid-in capital | 21,237,298 | 21,162,686 | ||||||||||
Retained earnings | (4,317,130 | ) | 424,854 | |||||||||
Accumulated other comprehensive income | (328,835 | ) | (250,457 | ) | ||||||||
Total Stockholders' Equity | 25,819,153 | 27,837,479 | ||||||||||
Total Liabilities and Stockholders' Equity | $ | 441,499,414 | $ | 532,404,386 |
Cornerstone Bancshares, Inc. and Subsidiary | ||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||
Three months ended | Twelve months ended | |||||||||||||||||||
December 31 | December 31 | |||||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Loans, including fees | $ | 4,895,965 | $ | 5,906,481 | $ | 21,498,120 | $ | 24,402,101 | ||||||||||||
Securities and interesting bearing deposits | 534,005 | 683,008 | 3,633,367 | 1,895,228 | ||||||||||||||||
Federal funds sold & other earning assets | 15,258 | 20,432 | 79,941 | 11,098 | ||||||||||||||||
Total interest income | 5,445,228 | 6,609,921 | 25,211,428 | 26,308,427 | ||||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Time deposits | 1,149,363 | 1,860,197 | 5,838,571 | 7,608,747 | ||||||||||||||||
Other deposits | 90,044 | 88,121 | 379,810 | 400,395 | ||||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 28,103 | 38,491 | 127,308 | 173,648 | ||||||||||||||||
FHLB advances and other borrowing | 651,164 | 774,876 | 2,856,125 | 3,006,593 | ||||||||||||||||
Total interest expense | 1,918,674 | 2,761,685 | 9,201,814 | 11,189,383 | ||||||||||||||||
Net interest income before provision for loan losses | 3,526,554 | 3,848,236 | 16,009,614 | 15,119,044 | ||||||||||||||||
Provision for loan losses | 4,130,000 | 4,150,000 | 7,291,000 | 14,898,898 | ||||||||||||||||
Net interest income after the provision for loan losses | (603,446 | ) | (301,764 | ) | 8,718,614 | 220,146 | ||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Customer service fee | 280,274 | 370,742 | 1,272,893 | 1,630,387 | ||||||||||||||||
Other noninterest income | 62,845 | (26,850 | ) | 156,968 | 138,244 | |||||||||||||||
Net gains / (losses) from sale of loans and other assets | (680,885 | ) | (980,312 | ) | 249,628 | (1,227,414 | ) | |||||||||||||
Total noninterest income | (337,766 | ) | (636,420 | ) | 1,679,489 | 541,217 | ||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Salaries and employee benefits | 1,514,633 | 1,638,366 | 6,194,504 | 6,970,282 | ||||||||||||||||
Net occupancy and equipment expense | 380,352 | 367,745 | 1,501,504 | 1,547,630 | ||||||||||||||||
Depository insurance * | 349,908 | 628,746 | 1,287,676 | 1,198,937 | ||||||||||||||||
Goodwill impairment | 2,541,476 | - | 2,541,476 | - | ||||||||||||||||
Other operating expense | 1,254,749 | 1,296,127 | 5,115,761 | 4,559,193 | ||||||||||||||||
Total noninterest expense | 6,041,118 | 3,930,984 | 16,640,921 | 14,276,042 | ||||||||||||||||
(Loss) / income before provision for income taxes | (6,982,330 | ) | (4,869,168 | ) | (6,242,818 | ) | (13,514,679 | ) | ||||||||||||
(Benefit) / provision for income taxes | (1,699,200 | ) | (1,904,367 | ) | (1,535,297 | ) | (5,336,040 | ) | ||||||||||||
NET (LOSS) / INCOME | $ | (5,283,130 | ) | $ | (2,964,801 | ) | $ | (4,707,521 | ) | $ | (8,178,639 | ) | ||||||||
Preferred stock dividends | 34,463 | - | 34,463 | - | ||||||||||||||||
Net (loss) income available to common stockholders | $ | (5,317,593 | ) |
| $ | (2,964,801 | ) | $ | (4,741,984 | ) | $ | (8,178,639 | ) | |||||||
(LOSS) / EARNINGS PER COMMON SHARE | ||||||||||||||||||||
Basic net (loss) / income per common share | $ | (0.82 | ) |
| $ | (0.46 | ) | $ | (0.73 | ) | $ | (1.26 | ) | |||||||
Diluted net (loss) / income per common share | $ | (0.82 | ) |
| $ | (0.46 | ) | $ | (0.73 | ) | $ | (1.26 | ) | |||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | - | $ | - | $ | - | $ | 0.10 | ||||||||||||
* Includes Special one time Assessment on June 30, 2009 in the amount of $213,151 |
Cornerstone Bancshares, Inc. and Subsidiary | ||||||||||||||||||||||||||||||||
Consolidated Statement of Changes in Stockholders' Equity - Unaudited | ||||||||||||||||||||||||||||||||
For the twelve months ended December 31, 2010 | ||||||||||||||||||||||||||||||||
Additional | Other | Total | ||||||||||||||||||||||||||||||
Comprehensive | Preferred | Common | Paid-in | Retained | Comprehensive | Stockholders' | ||||||||||||||||||||||||||
Income | Stock | 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 | - | 74,612 | - | - | 74,612 | |||||||||||||||||||||||||||
Issuance of Series A Convertible Preferred Stock | 2,727,424 | - | - | - | - | 2,727,424 | ||||||||||||||||||||||||||
Peferred Stock Dividend | - | - | - | (34,463 | ) | - | (34,463 | ) | ||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||
Net loss | $ | (4,707,521 | ) | - | - | - | (4,707,521 | ) | - | (4,707,521 | ) | |||||||||||||||||||||
Other comprehensive income, net of tax: Unrealized holding gains on securities available for sale, net of reclassification adjustment | (78,378 | ) | - | - | - | - | (78,378 | ) | (78,378 | ) | ||||||||||||||||||||||
Total comprehensive loss | $ | (4,785,899 | ) | |||||||||||||||||||||||||||||
BALANCE, December 31, 2010 | $ | 2,727,424 | $ | 6,500,396 | $ | 21,237,298 | $ | (4,317,130 | ) | $ | (328,835 | ) | $ | 25,819,153 | ||||||||||||||||||
CONTACT:
Cornerstone Bancshares, Inc.
Frank Hughes, President and CEO, 423-385-3009