Exhibit 99.1
Cornerstone Bancshares, Inc. Announces 4th Quarter 2006 Financial Results on
January 12, 2007
HIXSON, Tenn., Jan. 12 /PRNewswire-FirstCall/ -- Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ) today announced the following:
Cornerstone Bancshares, Inc saw its 4th quarter earnings increase to $1.45 million or $0.22 a share and $5.81 million year to date or $0.90 a share an increase of 26.4% over 2005’s earnings per share of $0.71. The earnings were $0.025 a share better than its $0.875 earning per share guidance given in June. The better than expected Company performance was a direct result of the continued above average net interest margin for the fourth quarter of 5.80% compared to comparable peer bank average of 4.23%. The Bank’s loan portfolio finished the quarter with an average 4th quarter balance of $296 million, up 13.6% over the same period in 2005. During the 4th quarter Cornerstone reevaluated the amortization of its intangible asset for Eagle Financial Inc. and accelerated the amortization by an additional $182 thousand. The Corporation also set up and funded a corporate foundation to assist the Bank in civic and community gifting. The foundation was initially funded with $500 thousand and will give 5% of its corpus annually. These two non operating expenses reduced the quarterly and annual earnings by $430 thousand after taxes.
Currently, Cornerstone has 6.5 million shares outstanding and expects earnings per share to increase to $1.00 per share in 2007 an increase of 11.1%. During the fourth quarter Cornerstone completed the formation of a Loan Production Office in Dalton, GA and expects to assist small businesses in North GA with asset based loans from both Cornerstone Community Bank and Eagle Financial, Inc.
The asset quality remained at the superior level during 2006 as non- performing loans as a percentage of average total loans remained at 0.37% while past due loans as a percentage of total loans decreased to 0.50%. The Bank had net charge offs of $191 thousand during the fourth quarter and $394 thousand year to date, while providing $1.1 million to the loan loss allowance year to date. The large provision was created to fully fund the loan loss allowance for the loan growth realized during 2006, and as a result the Bank was able to maintain a 1.33% allowance for possible loan losses.
Cornerstone Bancshares, Inc. is a one-bank holding company serving the Chattanooga, Tennessee MSA with 5 branches and one loan production office with $375 million in assets specializing in business financial services.
CORNERSTONE BANCSHARES, INC.
Selected Financial Information
as of December 31, 2006
(in thousands)
|
| Three Months |
| % |
| |||||
|
|
|
| |||||||
EARNINGS SUMMARY |
| 2006 |
| 2005 |
|
| ||||
|
|
|
| |||||||
Interest income |
| $ | 7,936 |
| $ | 6,064 |
|
| 30.87 | % |
Interest expense |
|
| 2,931 |
|
| 1,872 |
|
| 56.57 | % |
Net interest income |
|
| 5,005 |
|
| 4,192 |
|
| 19.39 | % |
Provision for loan loss |
|
| 49 |
|
| 502 |
|
| -90.24 | % |
Net interest income after provision |
|
| 4,956 |
|
| 3,690 |
|
| 34.31 | % |
Noninterest income |
|
| 370 |
|
| 382 |
|
| -3.14 | % |
Noninterest expense |
|
| 3,297 |
|
| 2,024 |
|
| 62.90 | % |
Pretax income |
|
| 2,029 |
|
| 2,048 |
|
| -0.93 | % |
Income taxes |
|
| 582 |
|
| 706 |
|
| -17.56 | % |
Net income |
| $ | 1,447 |
| $ | 1,342 |
|
| 7.82 | % |
Earnings per common share |
| $ | 0.22 |
| $ | 0.21 |
|
| 4.19 | % |
Weighted average common shares outstanding (1) |
|
| 6,505,405 |
|
| 6,286,298 |
|
|
|
|
|
| Year-to-Date |
| % |
| |||||
|
|
|
| |||||||
EARNINGS SUMMARY |
| 2006 |
| 2005 |
|
| ||||
|
|
|
| |||||||
Interest income |
| $ | 29,165 |
| $ | 20,669 |
|
| 41.11 | % |
Interest expense |
|
| 10,306 |
|
| 6,076 |
|
| 69.62 | % |
Net interest income |
|
| 18,859 |
|
| 14,593 |
|
| 29.23 | % |
Provision for loan loss |
|
| 1,107 |
|
| 1,402 |
|
| -21.04 | % |
Net interest income after provision |
|
| 17,752 |
|
| 13,191 |
|
| 34.58 | % |
Noninterest income |
|
| 1,861 |
|
| 1,334 |
|
| 39.51 | % |
Noninterest expense |
|
| 10,473 |
|
| 7,644 |
|
| 37.01 | % |
Pretax income |
|
| 9,140 |
|
| 6,881 |
|
| 32.83 | % |
Income taxes |
|
| 3,328 |
|
| 2,557 |
|
| 30.15 | % |
Net income |
| $ | 5,812 |
| $ | 4,324 |
|
| 34.41 | % |
Earnings per common share |
| $ | 0.90 |
| $ | 0.71 |
|
| 26.36 | % |
Weighted average common shares outstanding (1) |
|
| 6,479,441 |
|
| 6,091,250 |
|
|
|
|
|
| Three Months |
| % |
| |||||
AVERAGE BALANCE |
|
|
| |||||||
SHEET SUMMARY |
| 2006 |
| 2005 |
|
| ||||
|
|
|
| |||||||
Loans, net of unearned income |
|
| 295,787 |
| $ | 260,384 |
|
| 13.60 | % |
Investment securities & Other |
|
| 47,095 |
|
| 31,582 |
|
| 49.12 | % |
Earning assets |
|
| 342,882 |
|
| 291,966 |
|
| 17.44 | % |
Total assets |
|
| 362,059 |
|
| 311,794 |
|
| 16.12 | % |
Noninterest bearing deposits |
|
| 39,773 |
|
| 37,334 |
|
| 6.53 | % |
Interest bearing transaction deposits |
|
| 96,763 |
|
| 82,384 |
|
| 17.45 | % |
Certificates of deposit |
|
| 140,064 |
|
| 115,688 |
|
| 21.07 | % |
Total deposits |
|
| 276,600 |
|
| 235,405 |
|
| 17.50 | % |
Other interest bearing liabilities |
|
| 44,922 |
|
| 42,939 |
|
| 4.62 | % |
Shareholder’s equity |
|
| 38,131 |
|
| 31,088 |
|
| 22.66 | % |
|
| Year-to-Date |
| % |
| |||||
AVERAGE BALANCE |
|
|
| |||||||
SHEET SUMMARY |
| 2006 |
| 2005 |
|
| ||||
|
|
|
| |||||||
Loans, net of unearned income |
| $ | 284,105 |
| $ | 236,265 |
|
| 20.25 | % |
Investment securities & Other |
|
| 40,904 |
|
| 32,681 |
|
| 25.16 | % |
Earning assets |
|
| 325,009 |
|
| 268,946 |
|
| 20.85 | % |
Total assets |
|
| 344,741 |
|
| 286,218 |
|
| 20.45 | % |
Noninterest bearing deposits |
|
| 37,056 |
|
| 34,730 |
|
| 6.70 | % |
Interest bearing transaction deposits |
|
| 93,178 |
|
| 79,175 |
|
| 17.69 | % |
Certificates of deposit |
|
| 132,465 |
|
| 102,778 |
|
| 28.88 | % |
Total deposits |
|
| 262,699 |
|
| 216,683 |
|
| 21.24 | % |
Other interest bearing liabilities |
|
| 44,019 |
|
| 38,743 |
|
| 13.62 | % |
Shareholder’s equity |
|
| 35,728 |
|
| 28,883 |
|
| 23.70 | % |
|
| Three Months |
|
|
|
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|
|
|
|
|
| |||||
SELECTED RATIOS |
| 2006 |
| 2005 |
|
|
|
| ||
|
|
|
|
|
| |||||
Average equity to average assets |
|
| 10.53 | % |
| 9.97 | % |
|
|
|
Average net loans to average total assets |
|
| 81.70 | % |
| 83.51 | % |
|
|
|
Return on average assets |
|
| 1.59 | % |
| 1.72 | % |
|
|
|
Return on average total equity |
|
| 15.06 | % |
| 17.27 | % |
|
|
|
Actual Equity on December 31, |
| $ | 38,055,477 |
| $ | 32,446,364 |
|
|
|
|
Actual # shares outstanding on December 31 |
|
| 6,503,318 |
|
| 6,402,668 |
|
|
|
|
Book value per common share (1) |
| $ | 5.85 |
| $ | 5.07 |
|
|
|
|
|
| Year-to-Date |
|
|
|
| ||||
|
|
|
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SELECTED RATIOS |
| 2006 |
| 2005 |
|
|
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| ||
|
|
|
|
|
| |||||
Average equity to average assets |
|
| 10.36 | % |
| 10.09 | % |
|
|
|
Average net loans to average total assets |
|
| 82.41 | % |
| 82.55 | % |
|
|
|
Return on average assets |
|
| 1.69 | % |
| 1.51 | % |
|
|
|
Return on average total equity |
|
| 16.27 | % |
| 14.97 | % |
|
|
|
Actual Equity on December 31, |
|
|
|
|
|
|
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Actual # shares outstanding on December 31 |
|
|
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|
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Book value per common share (1) |
|
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SOURCE Cornerstone Bancshares, Inc.
-0- 01/12/2007
/CONTACT: Frank Hughes, President & COO of Cornerstone Bancshares, Inc., +1-423-385-3009/
/Web site: http://www.cscbank.com /
(CSBQ)