8-K

			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):  June 3, 2015
			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)		(IRS Employer Identification No.)
	835 Georgia Avenue, Chattanooga, Tennessee 37402
		(Address of principal executive offices)           (zip code)
	(423) 385-3000
	(Registrant's telephone number, including area code)
	Not Applicable
	(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:

þ 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 7.01 Regulation FD.

In connection with communications with investors regarding Cornerstone Bancshares, Inc. (the “Company”), representatives of the Company may disclose the information attached to this Current Report on Form 8-K as Exhibit 99.1.

By filing this Current Report on Form 8-K and furnishing the information contained herein, the Company makes no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD.

The information contained in this report is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Additional Investor Information.

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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: June 3, 2015

By:       /s/ Nathaniel F. Hughes

Nathaniel F. Hughes

President and Chief Executive Officer

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EX-99.1

Exhibit 99.1

Pro Forma Balance Sheet

March 2015

SmartFinancial Inc. & Cornerstone Bancshares, Inc. Combination Proforma Balance Sheet	Smart		Cornerstone		Fair Value		Capital Raise			Pro Forma
	March 31,		March 31,		Adjustments,		Adjustments,			March 31,
	2015		2015		Net		Net			2015
	Actual		Actual							Combined
Assets:
Cash and cash equivalents	$	41,248	$	25,446	$	(1,500)	$	7,318	g,j	$	72,512
Investment securities available-for-sale, fair value		92,321		85,093		-		-			177,415
Investment securities held-to-maturity, amortized cost		-		24		-		-			24
Loans, net of deferred fees		371,411		296,033		(7,506)		-	a,c		659,938
Allowance for loan losses		(3,915)		(3,657)		3,656		-	c		(3,916)
Net loans		367,495		292,377		(3,850)		-	a		656,022
Bank premises and equipment, net		16,383		6,297		1,850		-	d		24,530
Other real estate owned		4,170		8,523		(1,237)		-	e		11,456
Goodwill		-		-		-		-			-
Deferred tax asset, net		-		1,801		955		-	b		2,756
Bank owned life insurance		-		1,258		-		-			1,258
Core deposit intangibles		258		-		2,483		-	a		2,741
Other assets		5,132		5,191		-		-			10,324
Total Assets	$	527,009	$	426,010	$	(1,299)	$	7,318		$	959,038
Liabilities and Shareholders’ Equity:
Liabilities:
Deposits—noninterest-bearing	$	58,006	$	56,620	$	-	$	-		$	114,626
Deposits—interest-bearing		408,554		276,577		1,029		-	a		686,161
Total deposits		466,560		333,198		1,029		-			800,787
Securities sold under repurchase agreements		4,607		19,510		-		-			24,116
Other borrowings		-		31,000		582		-	a,j		31,582
Other liabilities		(863)		1,376		-		8,000			8,513
Total liabilities		470,304		385,083		1,611		8,000			864,998
Shareholders’ Equity:											-
Preferred Stock		12,000		14,982		-		(14,982)	j		12,000
Common Stock		2,966		6,638		9,480		4,000	h.i,j		23,084
Additional paid in capital		30,524		21,903		(11,950)		10,300	h,i,j		50,777
Retained earnings (deficit)		11,013		(2,945)		(91)		-	f,g,h		7,977
Accumulated other comprehensive income (loss)		202		349		(349)		-	h		202
Total shareholders’ equity		56,705		40,927		(2,910)		(682)			94,040
Total Liabilities and Shareholders’ Equity	$	527,009	$	426,010	$	(1,299)	$	7,318		$	959,038

Pro Forma Balance Sheet Adjustments

March 2015

	PRO FORMA ADJUSTING ENTRIES (BALANCE SHEET):	Debit		Credit
a.	Loans—fair value adjustment and credit mark above allowance	$	-		3,850.0
a.	Core deposit premium		2,483.0		-
a.	Deposits—interest-bearing		-		1,029.0
a.	FHLB—fair value adjustment		-		582.0
b.	Deferred tax assets		-		1,803.0
b.	Deferred tax assets		2,758.0		-
c.	Allowance for loan losses		3,656.0		-
c.	Loans		-		3,656.0
d.	Fixed assets		1,850.0		-
e.	Other Real Estate		-		1,237.0
f.	Bargain purchase gain		-		(1,536.0	)
g.	Cash		-		1,500.0
g.	Retained earnings		1,500.0		-
h	Retained earnings		-		2,945.0
h	Common stock		6,637.9		-
h	Additional paid in capital		21,902.8		-
h	Accumulated other comprehensive income (loss)		349.3		-
i	Common stock		-		16,118.0
i	Additional paid in capital		-		9,953.0
j	Common stock		-		4,000.0
j	Additional paid in capital		-		10,300.0
j	Cash		7,318.0		-
j	Preferred Stock		14,982.0		-
j	Other Borrowings		-		8,000.0
		$	63,437.0	$	63,437.0

Additional Notes:

· The numbers of shares of common stock of Cornerstone Bancshares, Inc. and SmartFinancial, Inc. outstanding as of 3/31/15 were 2,965,783 and 6,637,941, respectively.

· Between 12/31/14 and 3/31/15, Cornerstone Bancshares, Inc. options to acquire 47,810 shares at an exercise price of $9.23 were forfeited, SmartFinancial, Inc. options to acquire 511 shares at an exercise price of $11.00 were forfeited, and SmartFinancial, Inc. options to acquire 500 shares at an exercise price of $15.00 were forfeited.

· The foregoing adjustments assume a market price per share of Cornerstone Bancshares, Inc. common stock of $3.31 at 3/31/15.

Forward Looking Statements

Certain of the statements made in this document 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, SmartFinancial and their respective management regarding the companies’ strategic directions, prospects, future results and benefits of the merger, are subject to numerous 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 and SmartFinancial operate, governmental regulations, the ability to obtain regulatory and shareholder approval, the possibility that conditions to completion of the merger will not be satisfied, the ability to complete the merger in the expected timeframe, the companies’ competitive environment, cyclical and seasonal fluctuations in their operating results, and other risks.