SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 15, 2004
CORNERSTONE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Tennessee 000-30497 62-1175427
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(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
5319 Highway 153,
Chattanooga, Tennessee 37343
(Address of principal executive offices)
(423) 385-3000
(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report.)
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Item 9. Regulation FD Disclosure.
This information furnished under "Item 9. Regulation FD Disclosure" is provided under "Item 12. Results of Operation and Financial Condition" in accordance with SEC Release No. 33-8216.
On April 15, 2004, the Registrant issued a press release reporting earnings results for the fiscal quarter ending on March 31, 2004.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated April 15, 2004 reporting earnings results for the fiscal quarter ending on March 31, 2004.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CORNERSTONE BANCSHARES, INC.
Date: April 15, 2004 By: \s\ Nathaniel F. Hughes
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Nathaniel F. Hughes,
President and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release dated April 15, 2004 reporting earnings results
for the fiscal quarter ending on March 31, 2004.
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Exhibit 99.1
Cornerstone Bancshares, Inc. Announces 1st Quarter 2004 Financial Results April 15, 2004
HIXSON, Tenn., April 15 /PRNewswire-FirstCall/ -- The first quarter of
2004 started out much like 2003 with strong loan growth as actual loans grew
$12 million or 7.7%. Another area of exceptional growth was the Bank's actual
demand deposit accounts, which grew $5.0 million or 22.5% during the first
quarter. These two areas are important to the overall profitability of the
Company and their strong growth bodes well for the remainder of 2004. The
Corporation earned $523 thousand for the first quarter of 2004, a 30% increase
over the same time period in 2003. The Bank has been able to reach out and
attract business customers who need the high level of expertise available at
Cornerstone, especially in asset-based lending and Small Business
Administration loan origination. The Bank was able to build on this strength
by adding two more relationship managers with a high level of experience in
business consulting and should help continue the above average peer asset
growth rate the Bank has enjoyed the last two years. Other objectives for
2004, include the opening of our fifth branch in Ooltewah, Tennessee in May,
renovating the East Ridge branch to give it additional drive thru capability,
and finally locating and purchasing the property for the Bank's sixth branch
location.
The asset quality remained at the superior level during the first quarter
of 2004 as non-performing loans as a percentage of average total loans
remained at .02%. The Bank experienced normal charge off level for the
quarter but was able to recover the majority of the charge off which is
unusual and allowed the Bank to fund the exceptional loan growth with a very
normal provision and keep the allowance at a 1.25% level.
Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ) 1st quarter 2004
earnings of $523 thousand represents an 30.1% increase over the 1st quarter in
2003 earnings of $402 thousand. Earnings per share for the 1st quarter 2004
was $0.42 compared to $0.33 per share for the 1st quarter of 2003.
Cornerstone is confident this earnings growth will continue throughout 2004
and anticipate earnings per share to grow to $1.88 a share an increase of 24%
over 2003.
Cornerstone Bancshares, Inc. is a one-bank holding company serving the
Chattanooga, Tennessee MSA with 4 branches and $207 million in assets
specializing in business financial services.
CORNERSTONE BANCSHARES, INC.
Selected Financial Information
as of March 31, 2004
(in thousands)
Three Months
Ending Mar 31 %
EARNINGS SUMMARY 2004 2003 Change
Interest income $3,078 $2,640 16.6%
Interest expense 808 812 -0.5%
Net interest income 2,270 1,828 24.2%
Provision for loan loss 160 105 52.4%
Net interest income after provision 2,110 1,723 22.5%
Noninterest income 348 286 21.5%
Noninterest expense 1,604 1,354 18.5%
Pretax income 854 655 30.3%
Income taxes 331 253 30.6%
Net income $523 $402 30.1%
Earnings per common share $0.42 $0.33
Weighted average common shares
outstanding 1,243,464 1,233,167
CORNERSTONE BANCSHARES, INC.
Selected Financial Information
as of March 31, 2004
(in thousands)
Year-to-Date
Ending Mar 31 %
EARNINGS SUMMARY 2004 2003 Change
Interest income $3,078 $2,640 16.6%
Interest expense 808 812 -0.5%
Net interest income 2,270 1,828 24.2%
Provision for loan loss 160 105 52.4%
Net interest income after provision 2,110 1,723 22.5%
Noninterest income 348 286 21.5%
Noninterest expense 1,604 1,354 18.5%
Pretax income 854 655 30.3%
Income taxes 331 253 30.6%
Net income $523 $402 30.1%
Earnings per common share $0.42 $0.33
Weighted average common shares
outstanding 1,243,464 1,233,167
Three Months Year-to-Date
AVERAGE BALANCE Ending Mar 31 % Ending Mar 31 %
SHEET SUMMARY 2004 2003 Change 2004 2003 Change
Loans, net of
unearned income $162,773 $127,171 28.0% $162,773 $127,171 28.0%
Investment
securities 25,409 26,727 -4.9% 25,409 26,727 -4.9%
Earning assets 188,182 153,898 22.3% 188,182 153,898 22.3%
Total assets 200,440 164,807 21.6% 200,440 164,807 21.6%
Noninterest bearing
deposits 21,898 16,486 32.8% 21,898 16,486 32.8%
Interest bearing
transaction deposits 55,680 44,209 25.9% 55,680 44,209 25.9%
Certificates of
deposit 79,607 71,567 11.2% 79,607 71,567 11.2%
Total deposits 157,185 132,262 18.8% 157,185 132,262 18.8%
Other interest bearing
liabilities 24,629 16,097 53.0% 24,629 16,097 53.0%
Shareholder's equity 17,284 15,383 12.4% 17,284 15,383 12.4%
Three Months Year-to-Date
Ending Mar 31 Ending Mar 31
SELECTED RATIOS 2004 2003 2004 2003
Average equity to average assets 8.62% 9.33% 8.62% 9.33%
Average net loans to average
total assets 81.21% 77.16% 81.21% 77.16%
Return on average assets 1.04% 0.98% 1.04% 0.98%
Return on average total equity 12.11% 10.45% 12.11% 10.45%
Actual Book value per common share $14.04 $12.57
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SOURCE Cornerstone Bancshares, Inc.
-0- 04/15/2004
/CONTACT: Frank Hughes, President & Treasurer of Cornerstone Bancshares,
Inc., +1-423-385-3009, or fax, +1-423-385-3100/
CSBQ)
CO: Cornerstone Bancshares, Inc.
ST: Tennessee
IN: FIN OTC
SU: ERN