EX-99.1 3 cb9621ex991.htm EXHIBIT 99.1

Exhibit 99.1

Cornerstone Bancshares, Inc. Announces 1st Quarter 2007 Financial Results

          HIXSON, Tenn., April 16 /PRNewswire-FirstCall/ -- Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ) today announced the following:

          Cornerstone Bancshares, Inc. saw its 1st quarter 2007 earnings increase to $1.65 million versus $1.36 million, an increase of 21.9% over first quarter 2006 while book earnings per share increased in the first quarter of 2007 to $.25 versus $.21, an increase of 20.4% over first quarter 2006.  The earnings growth was the result of continued strong balance sheet growth, especially loan generation.  C & I and Commercial Real Estate lending lead the Bank’s loan growth which grew on average 17.9% over the same period in 2006. The Bank saw a slight compression in its net interest margin which declined 10 basis points from 5.78% to 5.68% during the first quarter of 2007.  The compression is due to a flat yield curve and increased competition in the Bank’s market place. To counter act the net interest margin compression the bank has started two new Loan Production Offices, one in Dalton, GA and the other in Knoxville, TN to accelerate the leverage of the Bank’s capital and insure future net interest income growth.  The expansion will be accretive in 2007.   The Company’s performance metrics continued to improve due the Bank’s net interest margin, ROA was 1.75% for the first quarter of 2007 compared to 1.65% during the first quarter in 2006. ROE was 16.83% during the first quarter in 2007 compared to 16.18% in 2006.

          Presently the Company is operating at a comfortable 9.75% leverage ratio and has the ability to continue to grow its balance sheet in excess of its retained earnings ability to fund growth for the foreseeable future. Given this positive capital position and the expected above average loan growth, management remains confident with the $1.00 earnings per share guidance given at the beginning of the year.

          The asset quality remained at the superior level during first quarter of 2007, non-performing loans as a percentage of average total loans decreased to 0.04% while past due loans as a percentage of total loans decreased to 0.49%.

          Cornerstone Bancshares, Inc. is a one-bank holding company serving the Chattanooga, Tennessee MSA with 5 branches, 2 loan production offices and $395 million in assets specializing in business financial services.



          CORNERSTONE BANCSHARES, INC.
          Selected Financial Information
          as of March 31, 2007
          (in thousands)

 

 

Three Months
Ending March 31

 

%
Change

 

Year-to-Date
Ending March 31

 

%
Change

 

 

 


 

 


 

 

EARNINGS SUMMARY

 

2007

 

2006

 

 

2007

 

2006

 

 


 



 



 



 



 



 



 

Interest income

 

$

8,073

 

$

6,509

 

 

24.0

%

$

8,073

 

$

6,509

 

 

24.0

%

Interest expense

 

 

3,189

 

 

2,154

 

 

48.1

%

 

3,189

 

 

2,154

 

 

48.1

%

Net interest income

 

 

4,884

 

 

4,355

 

 

12.2

%

 

4,884

 

 

4,355

 

 

12.2

%

Provision for loan loss

 

 

2

 

 

378

 

 

-99.5

%

 

2

 

 

378

 

 

-99.5

%

Net interest income after provision

 

 

4,882

 

 

3,977

 

 

22.8

%

 

4,882

 

 

3,977

 

 

22.8

%

Noninterest income

 

 

404

 

 

433

 

 

-6.7

%

 

404

 

 

433

 

 

-6.7

%

Noninterest expense

 

 

2,686

 

 

2,242

 

 

19.8

%

 

2,686

 

 

2,242

 

 

19.8

%

Pretax income

 

 

2,600

 

 

2,168

 

 

19.9

%

 

2,600

 

 

2,168

 

 

19.9

%

Income taxes

 

 

948

 

 

813

 

 

16.7

%

 

948

 

 

813

 

 

16.7

%

Net income

 

$

1,652

 

$

1,355

 

 

21.9

%

$

1,652

 

$

1,355

 

 

21.9

%

Earnings per common share

 

$

0.25

 

$

0.21

 

 

20.4

%

$

0.25

 

$

0.21

 

 

20.4

%

Weighted average common shares outstanding (1)

 

 

6,511,951

 

 

6,430,542

 

 

 

 

 

6,511,951

 

 

6,430,542

 

 

 

 




 

 

Three Months
Ending March 31

 

 

 

 

Year-to-Date
Ending March 31

 

 

 

 

AVERAGE BALANCE

 


 

%
Change

 


 

%
Change

 

SHEET SUMMARY

 

2007

 

2006

 

 

2007

 

2006

 

 


 



 



 



 



 



 



 

Loans, net of unearned income

 

$

320,296

 

$

271,650

 

 

17.9

%

$

320,296

 

$

271,650

 

 

17.9

%

Investment securities & Other

 

 

37,111

 

 

35,835

 

 

3.6

%

 

37,111

 

 

35,835

 

 

3.6

%

Earning assets

 

 

357,407

 

 

307,485

 

 

16.2

%

 

357,407

 

 

307,485

 

 

16.2

%

Total assets

 

 

378,146

 

 

328,569

 

 

15.1

%

 

378,146

 

 

328,569

 

 

15.1

%

Noninterest bearing deposits

 

 

38,315

 

 

36,644

 

 

4.6

%

 

38,315

 

 

36,644

 

 

4.6

%

Interest bearing transaction deposits

 

 

90,466

 

 

86,914

 

 

4.1

%

 

90,466

 

 

86,914

 

 

4.1

%

Certificates of deposit

 

 

147,624

 

 

128,963

 

 

14.5

%

 

147,624

 

 

128,963

 

 

14.5

%

Total deposits

 

 

276,405

 

 

252,521

 

 

9.5

%

 

276,405

 

 

252,521

 

 

9.5

%

Other interest bearing liabilities

 

 

60,080

 

 

40,576

 

 

48.1

%

 

60,080

 

 

40,576

 

 

48.1

%

Shareholder’s equity

 

 

39,252

 

 

33,488

 

 

17.2

%

 

39,252

 

 

33,488

 

 

17.2

%


 

 

Three Months
Ending March 31

 

Year-to-Date
Ending March 31

 

 

 


 


 

SELECTED RATIOS

 

2007

 

2006

 

2007

 

2006

 


 



 



 



 



 

Average equity to average assets

 

 

10.38

%

 

10.19

%

 

10.38

%

 

10.19

%

Average net loans to average total assets

 

 

84.70

%

 

82.68

%

 

84.70

%

 

82.68

%

Return on average assets

 

 

1.75

%

 

1.65

%

 

1.75

%

 

1.65

%

Return on average total equity

 

 

16.83

%

 

16.18

%

 

16.83

%

 

16.18

%

Actual Equity on Mar. 31,

 

$

39,578,839

 

$

33,777,189

 

 

 

 

 

 

 

Actual # shares outstanding on Mar. 31,

 

 

6,515,118

 

 

6,446,568

 

 

 

 

 

 

 

Book value per common share

 

$

6.07

 

$

5.24

 

 

 

 

 

 

 

 SOURCE  Cornerstone Bancshares, Inc.
          -0-                                                  04/16/2007
          /CONTACT:  Frank Hughes, President & COO of Cornerstone Bancshares, Inc., +1-423-385-3009/
          /Web site:  http://www.cscbank.com/
          (CSBQ)