UNITED STATES
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) January 28, 2013

 

CORNERSTONE BANCSHARES, INC.
(Exact name of registrant as specified in its charter)

 

Tennessee 000-30497 62-1173944

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

835 Georgia Avenue, Chattanooga, Tennessee   37402
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code (423) 385-3000

 

 
(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

£    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

£    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

£    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

£    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02. Results of Operations and Financial Condition.

 

On January 28, 2013, the Registrant issued a press release reporting earnings results for the fiscal quarter ended December 31, 2012.

 

 

Item 9.01. Financial Statements and Exhibits.

 

(c) Exhibits
 
99.1 Press release dated January 28, 2013 reporting earnings results for the fiscal quarter ended December 31, 2012.

 

 

 

 

SIGNATURES

 

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.
  (Registrant)
   
   
Date: January 29, 2013  
  By: /s/ Nathaniel F. Hughes
  Nathaniel F. Hughes,
  President and Chief Executive Officer

 

 
 

 

 

Cornerstone Bancshares, Inc. Reports Fourth Quarter 2012 Earnings

 

CHATTANOOGA, Tenn.--(PR Newswire)— January 28, 2013--Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ; CSBQP) today announced the following:

 

Cornerstone Bancshares, Inc. (“Cornerstone”) reported net income of $371,000 for the fourth quarter of 2012 and net income of $1,402,000 for the 12 months ended December 31, 2012, which represents a 228.6 percent improvement in net income quarter-over-quarter and a 36.1 percent improvement from the previous year.

 

Net interest margin increased from 3.55 percent in 2011 to 3.85 percent in 2012. In addition, total assets increased 4.2 percent for the year, from $422,655,000 in 2011 to $440,463,000. There was a 3.4 percent growth in loans for the year, from $267,765,000 in 2011 to $276,992,000 in 2012. Deposits increased 8.9 percent from $314,042,000 in 2011 to $341,897,000. In addition, Cornerstone’s market value per common share increased 52.7 percent from $1.50 in 2011 to $2.29 in 2012. As of December 31, 2012, Cornerstone had sold all 600,000 shares of its Series A Convertible Preferred Stock, raising $15 million in new capital.

 

Specific Accomplishments Include:

 

• $15 million capital raise completion

 

• Four consecutive quarters of positive earnings for 2012

 

• Four consecutive payments of quarterly Preferred Stock dividends

 

“We’ve definitely turned a corner and are extremely pleased with our continued improvement,” said Cornerstone’s President and CEO Frank Hughes. “Our goal is to continue strengthening Cornerstone’s foundation, so that we can build for the future and continue serving our Chattanooga market.”

 

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.

 

Contact:

N. Frank Hughes, President & Chief Executive Office

423-385-3009

 

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, 2012 and 2011

(Unaudited)

 


(Amounts in thousands, except per common share data) 		  2012     2011     % Change  
Balance Sheet Data at December 31                        
Total assets   $ 440,463     $ 422,655       4.2  
Interest-earning assets     410,032       393,436       4.2  
Loans     276,992       267,765       3.4  
Foreclosed assets     20,332       18,524       9.8  
Deposits     341,897       314,042       8.9  
Other interest-bearing liabilities     56,762       72,436       (21.6 )
Shareholders' equity     40,889       35,208       16.1  
Loan to deposit ratio     81.02 %     85.26 %     (5.0 )
Tier 1 leverage ratio (Bank, est)     8.37 %     8.04 %     4.1  
Total risk-based capital ratio (Bank, est)     12.91 %     12.99 %     (0.6 )
Outstanding common shares     6,500       6,500       -  
Book value per common share   $ 4.01     $ 3.89       3.0  
Tangible book value per common share   $ 4.01     $ 3.89       3.0  
Market value per common share as of December 31   $ 2.29     $ 1.50       52.7  
                         
Loan Quality Data                        
Nonaccruing loans     6,006       7,882       (23.8 )
Loans past due 90 days – accruing     -       -       -  
Net charge-offs YTD     1,689       2,177       (22.4 )
Allowance for loan losses     6,141       7,400       (17.0 )
Allowance for loan losses to total loans     2.22 %     2.76 %        
Nonperforming assets to total assets     5.98 %     6.26 %        
                         
Performance Data for the Year                        
Net income   $ 1,402     $ 1,030       36.1  
Return on average assets     0.34 %     0.24 %        
Return on average equity     3.78 %     3.46 %        
Net interest margin     3.85 %     3.55 %        
Per common share data:                        
Net income – basic   $ 0.02     $ 0.05          
Net income – diluted   $ 0.02     $ 0.05          
Common dividends   $ -     $ -          
Preferred dividends & accretion   $ 2.50     $ 1.89          
Average shares (000s):                        
Basic common stock     6,500       6,500          
Diluted common stock     6,523       6,500          
Preferred stock (actual)     600       404          

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary 

Quarterly Earnings Summary

 

    (Unaudited)              
    2012     2011     Q4-12 /  
    Fourth     Third     Second     First     Fourth     Q4-11  
(Amounts in thousands)   Quarter     Quarter     Quarter     Quarter     Quarter     % Chg  
Interest income                                                
Loans, including fees   $ 4,718     $ 4,242     $ 4,186     $ 4,144     $ 4,437       6.3  
Securities and interest-bearing deposits at other financial institutions     440       478       618       467       548       (19.7 )
Federal funds sold and other earning assets     16       15       13       15       16       5.1  
    Total interest income     5,174       4,735       4,817       4,626       5,001       3.5  
Interest expense                                                
Deposits     673       756       768       820       924       (27.2 )
Short-term borrowings     17       22       23       32       27       (36.3 )
FHLB advances and other borrowing     391       394       426       462       454       (13.8 )
    Total interest expense     1,081       1,172       1,217       1,314       1,405       (23.0 )
Net interest income     4,093       3,563       3,600       3,312       3,596       13.8  
Provision for loan losses     330       100       -       -       300       10.0  
Net interest income after the                                                
  provision for loan losses     3,763       3,463       3,600       3,312       3,296       14.2  
Noninterest income                                                
Customer service fees     201       198       207       197       212       (5.2 )
Other noninterest income     13       12       19       20       15       (11.1 )
Gain on sale of assets     27       48       26       50       47       (42.6 )
    Total noninterest income     241       258       252       267       274       (11.9 )
Noninterest expense                                                
Salaries and employee benefits     1,600       1,566       1,570       1,591       1,614       (0.9 )
Net occupancy and equipment     408       355       348       336       314       30.0  
Depository insurance     121       237       207       203       255       (52.5 )
Foreclosed asset expense (1)     156       314       481       150       538       (71.0 )
Other operating expense     1,192       731       817       794       780       52.8  
    Total noninterest expense     3,477       3,203       3,423       3,074       3,501       (0.7 )
Income before income taxes     527       518       429       505       69       664.7  
Income tax (benefit) expense     156       154       118       149       (44 )     (454.5 )
Net income   $ 371     $ 364     $ 311     $ 356     $ 113       228.4  
                                                 
Preferred stock dividends & accretion on preferred stock discount     393       325       296       280       267       47.2  
                                                 
Net income / (loss) available to common     (22 )     39       15       76       (154 )     (85.7 )
                                                 
Net income / (loss) per common share:                                                
  Basic   $ (0.00 )   $ 0.01     $ -     $ 0.01     $ (0.02 )     (85.7 )
  Diluted   $ (0.00 )   $ 0.01     $ -     $ 0.01     $ (0.02 )     (85.7 )
Average basic shares     6,500       6,500       6,500       6,500       6,500       -  
Average common diluted shares     6,503       6,503       6,581       6,586       6,500       0.0  
Performance Ratios                                                
Return on average equity     3.81 %     3.88 %     3.42 %     4.00 %     1.37 %     177.7  
Return on average assets     0.35 %     0.35 %     0.30 %     0.35 %     0.11 %     225.3  
Net interest margin     4.21 %     3.70 %     3.87 %     3.59 %     3.72 %     13.4  
Average equity     38,926       37,501       36,423       35,587       32,912       18.3  
Average assets     420,608       418,443       412,305       408,711       416,562       1.0  
Average interest-earning assets     391,197       389,458       380,631       378,335       390,756       0.1  

 

(1) Includes OREO adjustments to fair value

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary

Loan Loss Allowance and Asset Quality Review

 

    2012     2011  
    Fourth     Third     Second     First     Fourth  
(Amounts in thousands)   Quarter     Quarter     Quarter     Quarter     Quarter  
                               
Allowance for loan losses                                        
Balance at beginning of period   $ 5,280     $ 6,029     $ 6,024     $ 7,400     $ 6,864  
Provision for loan losses     330       100       -       -       300  
Net charge-offs     531       (849 )     5       (1,376 )     236  
Balance at end of period   $ 6,141     $ 5,280     $ 6,029     $ 6,024     $ 7,400  
                                         
As a % of loans     2.22 %     1.93 %     2.29 %     2.29 %     2.76 %
As a % of nonperforming loans     102.24 %     66.26 %     84.63 %     55.95 %     93.90 %
As a % of nonperforming assets     23.32 %     17.40 %     20.60 %     20.27 %     28.03 %
                                         
Net charge-offs as a % of loans (a)     -0.77 %     1.24 %     -0.01 %     2.10 %     -0.35 %
                                         
Risk element assets                                        
Accruing troubled debt restructured   $ 5,316     $ 5,328     $ 2,775     $ 2,418     $ 2,750  
Loans past due 30-89 days   $ 6,534     $ 3,685     $ 2,495     $ 5,040     $ 8,158  
                                         
Nonaccruing loans   $ 6,006     $ 7,968     $ 7,124     $ 10,767     $ 7,882  
Loans past due 90 days – accruing     -       -       -       -       -  
Total nonperforming loans   $ 6,006     $ 7,968     $ 7,124     $ 10,767     $ 7,882  
Repossessed assets     32       39       83       -       -  
Other real estate owned (b)(c)   $ 20,300     $ 22,337     $ 22,061     $ 18,957     $ 18,524  
Total nonperforming assets   $ 26,338     $ 30,344     $ 29,268     $ 29,724     $ 26,406  
                                         
                                         
Nonperforming loans as a % of loans     2.17 %     2.91 %     2.70 %     4.10 %     2.94 %
Nonperforming assets as a % of loans                                        
   and other real estate owned     8.86 %     10.25 %     10.24 %     10.55 %     9.22 %
                                         
Total loans     276,992       273,820       263,749       262,788       267,765  
                                         
(a) Annualized        
(b) Properties sold during 4th Q 2012   $ 3,090                                  
(c) Properties under contract to sell   $ 474                                  

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary

Net Interest Margin Analysis

Taxable Equivalent Basis

 

    Three months ended  
    December 31  
(Amounts in thousands)                                    
Assets         2012                 2011        
    Average     Income/     Yield/     Average     Income/     Yield/  
Earning assets:   Balance     Expense     Rate     Balance     Expense     Rate  
Loans, net of unearned income   $ 276,694     $ 4,718       6.76 %   $ 268,349     $ 4,437       6.56 %
Investment securities     82,917       440       2.41 %     96,407       548       2.52 %
Other earning assets     31,586       16       0.21 %     26,000       16       0.24 %
Total earning assets     391,197     $ 5,174       5.31 %     390,756     $ 5,001       5.14 %
Allowance for loan losses     (5,530 )                     (6,871 )                
Cash and other assets     34,941                       32,677                  
TOTAL ASSETS   $ 420,608                     $ 416,562                  
                                                 
Liabilities and Shareholders' Equity                                                
                                                 
Interest-bearing liabilities:                                                
Interest-bearing demand deposits   $ 26,355     $ 21       0.32 %   $ 22,845     $ 19       0.33 %
Savings deposits     11,059       9       0.34 %     9,786       13       0.51 %
MMDA's     66,838       117       0.69 %     35,119       88       1.00 %
Time deposits     176,882       525       1.18 %     207,850       804       1.53 %
Federal funds purchased and securities                                                
sold under agreements to repurchase     18,343       17       0.37 %     21,079       28       0.52 %
Federal Home Loan Bank and other borrowings     37,175       392       4.18 %     43,045       455       4.19 %
Total interest-bearing liabilities     336,652       1,081       1.27 %     339,723       1,405       1.64 %
Net interest spread           $ 4,093       4.04 %           $ 3,596       3.50 %
Noninterest-bearing demand deposits     43,662                       43,728                  
Accrued expenses and other liabilities     1,368                       198                  
Shareholders' equity     38,926                       32,912                  
TOTAL LIABILITIES AND                                                
SHAREHOLDERS' EQUITY   $ 420,608                     $ 416,562                  
Net yield on earning assets                     4.21 %                     3.72 %
                                                 
Taxable equivalent adjustment:                                                
Loans             0                       0          
Investment securities             63                       64          
Total adjustment             63                       64          

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary

Net Interest Margin Analysis

Taxable Equivalent Basis

 

    Twelve months ended  
    December 31  
(Amounts in thousands)                                    
Assets         2012                 2011        
    Average     Income/     Yield/     Average     Income/     Yield/  
Earning assets:   Balance     Expense     Rate     Balance     Expense     Rate  
Loans, net of unearned income   $ 268,828     $ 17,289       6.43 %   $ 273,523     $ 18,129       6.63 %
Investment securities     89,587       2,004       2.53 %     108,705       2,312       2.38 %
Other earning assets     27,010       60       0.22 %     23,232       53       0.23 %
Total earning assets     385,425     $ 19,353       5.09 %     405,460     $ 20,494       5.12 %
Allowance for loan losses     (6,140 )                     (7,496 )                
Cash and other assets     35,756                       32,721                  
TOTAL ASSETS   $ 415,041                     $ 430,685                  
                                                 
Liabilities and Shareholders' Equity                                                
                                                 
Interest-bearing liabilities:                                                
Interest-bearing demand deposits   $ 26,483     $ 87       0.33 %   $ 25,741     $ 84       0.33 %
Savings deposits     10,504       38       0.36 %     9,750       50       0.51 %
MMDA's     52,454       422       0.80 %     29,149       291       1.00 %
Time deposits     187,733       2,471       1.32 %     226,720       3,768       1.66 %
Federal funds purchased and securities                                                
sold under agreements to repurchase     21,312       94       0.44 %     22,808       125       0.55 %
Federal Home Loan Bank and other borrowings     39,282       1,673       4.26 %     47,745       2,044       4.28 %
Total interest-bearing liabilities     337,768       4,785       1.42 %     361,913       6,362       1.76 %
Net interest spread           $ 14,568       3.67 %           $ 14,132       3.36 %
Noninterest-bearing demand deposits     39,936                       39,042                  
Accrued expenses and other liabilities     222                       (10 )                
Shareholders' equity     37,115                       29,740                  
TOTAL LIABILITIES AND                                                
SHAREHOLDERS' EQUITY   $ 415,041                     $ 430,685                  
Net yield on earning assets                     3.85 %                     3.55 %
                                                 
Taxable equivalent adjustment:                                                
Loans             0                       0          
Investment securities             260                       276          
Total adjustment             260                       276          

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary

Loan Stratification

 

    2012           2011              
    Fourth     % of     Fourth     % of     % Dollar  
(Amounts in thousands)   Quarter     Total     Quarter     Total     Change  
Non-residential real estate                                        
    Owner occupied   $ 58,425       21.1     $ 62,999       23.5       (7.3 )
    Non-owner occupied     66,468       24.0       62,958       23.5       5.6  
Multi-family real estate     8,508       3.1       11,023       4.1       (22.8 )
    1-4 family construction     6,937       2.5       5,775       2.2       20.1  
    Commercial land and lot development     25,551       9.2       18,629       7.0       37.2  
Total non-residential real estate     165,889       59.9       161,384       60.3       2.8  
Residential real estate                                        
    First mortgage - 1-4 family     44,145       15.9       41,226       15.4       7.1  
Second mortgage - 1-4 family     3,348       1.2       3,662       1.4       (8.6 )
    Home equity lines     15,194       5.5       14,632       5.5       3.8  
Total residential real estate     62,687       22.6       59,520       22.2       5.3  
Total real estate loans     228,576       82.5       220,904       82.5       3.5  
                                         
Commercial     38,101       13.8       35,608       13.3       7.0  
Agricultural & other     8,378       3.0       8,737       3.3       (4.1 )
Consumer     1,937       0.7       2,516       0.9       (23.0 )
Total loans, net of unearned fees   $ 276,992       100.0     $ 267,765       100.0       3.4  

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary

Consolidated Balance Sheets

 

    Unaudited        
    December 31,     December 31,  
ASSETS   2012     2011  
             
Cash and due from banks   $ 1,836,175     $ 1,660,204  
Interest-bearing deposits at other financial institutions     54,575,759       37,222,487  
Total cash and cash equivalents                
      56,411,934       38,882,691  
                 
Securities available for sale     76,096,646       86,057,437  
Securities held to maturity (fair value                
approximates $46,096 in 2012 and $70,484 in 2011)     45,086       68,643  
Federal Home Loan Bank stock, at cost     2,322,900       2,322,900  
Loans, net of allowance for loan losses of                
$6,141,281 in 2012 and $7,400,049 in 2011     270,850,465       260,364,569  
Bank premises and equipment, net     5,399,340       5,712,003  
Accrued interest receivable     1,213,778       1,327,458  
Foreclosed assets     20,332,313       18,523,960  
Other assets     7,790,634       9,395,721  
                 
Total Assets   $ 440,463,096     $ 422,655,382  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Deposits:                
Noninterest-bearing demand deposits   $ 57,070,534     $ 43,989,943  
Interest-bearing demand deposits     30,178,624       22,353,384  
Savings deposits and money market accounts     80,994,239       46,857,118  
Time deposits     173,653,892       200,841,499  
Total deposits     341,897,289       314,041,944  
                 
Accrued interest payable     120,558       110,703  
Federal funds purchased and securities sold under                
agreements to repurchase     19,587,387       29,390,810  
Federal Home Loan Bank advances and other borrowings     37,175,000       43,045,000  
Other liabilities     794,026       858,620  
                 
Total Liabilities     399,574,260       387,447,077  
                 
Stockholders' equity:                
Preferred stock - no par value; 2,000,000 shares authorized;                
600,000 and 403,989 shares issued and outstanding in 2012 and 2011, respectively.     14,821,546       9,899,544  
Common stock - $l.00 par value; 20,000,000 shares authorized;                
6,709,199 issued in 2012 and 2011;                
6,500,396 outstanding in 2012 and 2011     6,500,396       6,500,396  
Additional paid-in capital     21,390,486       21,316,438  
Retained deficit     (3,274,986 )     (3,627,208 )
Accumulated other comprehensive income     1,451,394       1,119,135  
                 
Total Stockholders' Equity     40,888,836       35,208,305  
                 
Total Liabilities and Stockholders' Equity   $ 440,463,096     $ 422,655,382  

 

The Notes to Consolidated Financial Statements are an integral part of these statements.

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary

Consolidated Statements of Income

 

    Unaudited     Unaudited  
    Three months ended     Twelve months ended  
    December 31,     December 31,  
    2012     2011     2012     2011  
INTEREST INCOME                                
Loans, including fees   $ 4,717,662     $ 4,437,342     $ 17,288,855     $ 18,128,907  
Securities and interest-bearing deposits at other financial institutions     440,187       548,211       2,003,620       2,311,690  
Federal funds sold & other earning assets     16,329       15,542       60,404       53,139  
Total interest income     5,174,178       5,001,095       19,352,879       20,493,736  
                                 
INTEREST EXPENSE                                
Time deposits     524,794       803,803       2,471,135       3,767,582  
Other deposits     147,953       119,854       546,812       424,387  
Federal funds purchased and securities                                
sold under agreements to repurchase     17,209       27,688       94,402       125,538  
Federal Home Loan Bank advances and other borrowings     391,468       453,756       1,672,478       2,044,361  
Total interest expense     1,081,424       1,405,101       4,784,827       6,361,868  
                                 
Net interest income before provision for loan losses     4,092,754       3,595,994       14,568,052       14,131,868  
Provision for loan losses     330,000       300,000       430,000       445,000  
Net interest income after provision for loan losses     3,762,754       3,295,994       14,138,052       13,686,868  
                                 
NONINTEREST INCOME                                
Customer service fees     201,144       212,058       803,251       868,935  
Net gains from sale of securities     -       -       -       107,413  
Net gains from sale of loans and other assets     27,601       47,131       151,710       134,997  
Other noninterest income     12,675       14,476       64,519       71,542  
Total noninterest income     241,420       273,665       1,019,480       1,182,887  
                                 
NONINTEREST EXPENSE                                
Salaries and employee benefits     1,600,177       1,613,574       6,327,226       6,117,063  
Net occupancy and equipment expense     408,908       313,736       1,447,204       1,431,863  
Depository insurance     121,072       254,844       803,902       1,052,591  
Foreclosed assets, net     155,507       538,053       1,100,670       1,922,988  
Other operating expenses     1,191,695       780,505       3,498,867       3,126,998  
Total noninterest expenses     3,477,359       3,500,712       13,177,869       13,651,503  
                                 
Income before provision for income taxes     526,815       68,947       1,979,663       1,218,252  
Provision (benefit) for income taxes     156,100       (43,875 )     577,600       188,200  
                                 
Net income     370,715     $ 112,822       1,402,063       1,030,052  
                                 
Preferred stock dividend requirements     375,000       252,493       1,229,780       651,119  
Accretion on preferred stock discount     17,845       14,299       63,924       36,718  
                                 
Net (loss) income available to common shareholders   $ (22,130 )   $ (153,970 )   $ 108,359     $ 342,215  
                                 
(LOSS) EARNINGS PER COMMON SHARE                                
Basic   $ -     $ (0.02 )   $ 0.02     $ 0.05  
Diluted   $ -     $ (0.02 )   $ 0.02     $ 0.05  
                                 
DIVIDENDS DECLARED PER COMMON SHARE   $ -     $ -     $ -     $ -  

 

The Notes to Consolidated Financial Statements are an integral part of these statements.

 

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary

Consolidated Statement of Changes in Stockholders' Equity - Unaudited

For the 12 months ended December 31, 2012

 

                Additional           Other     Total  
    Preferred     Common     Paid-in     Retained     Comprehensive     Stockholders'  
    Stock     Stock     Capital     Deficit     Income     Equity  
                                                 
BALANCE, December 31, 2011   $ 9,899,544     $ 6,500,396     $ 21,316,438     $ (3,627,208 )   $ 1,119,135     $ 35,208,305  
                                                 
Employee compensation stock option expense     -       -       74,048       -       -       74,048  
                                                 
Issuance of Series A Convertible Preferred Stock     4,858,078       -       -       -       -       4,858,078  
      0                                          
Preferred stock dividends paid     -       -       -       (985,917 )     -       (985,917 )
                                                 
Accretion on preferred stock     63,924       -       -       (63,924 )     -       -  
                                                 
Net income     -       -       -       1,402,063       -       1,402,063  
                                                 
Other comprehensive income, net of tax     -       -       -       -       332,259       332,259  
                                                 
BALANCE, December 31, 2012   $ 14,821,546     $ 6,500,396     $ 21,390,486     $ (3,274,986 )   $ 1,451,394     $ 40,888,836  

 

The Notes to Consolidated Financial Statements are an integral part of these statements.