EX-99.1 3 e17465ex99_1.txt PRESS RELEASE 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 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