Cornerstone Bancshares, Inc., parent company of Cornerstone Community Bank, reported net income of approximately $318,000 for the second quarter of 2015. While this represents a slight decrease compared with net income of approximately $409,000 for the same quarter last year, the second quarter 2015 includes approximately $474,000 in expenses related to the disposition of foreclosed assets and approximately $222,000 in merger related expenses. Cornerstone reported net income of approximately $798,000 for the six months ended June 30, compared to approximately $822,000 for the six months ended June 30, 2014. This marks the eighteenth consecutive quarter of positive earnings for Cornerstone.
Second Quarter Highlights:
Asset Quality: (June 30, 2015 compared to June 30, 2014)
• 44.9 percent decrease in foreclosed assets
• 68.8 percent decrease in non-performing loans
• Non-performing loans to total loans ratio decreased from 1.0 percent to 0.3 percent
Core Earnings:
• Total loans increased 6.0 percent from June 30, 2014 to June 30, 2015 and 4.7 percent from March 31, 2015 to June 30, 2015
• Cornerstone’s net interest margin strengthened to 4.0 percent for the six months ended June 30, 2015 from 3.9 percent percent for the six months ended June 30, 2014
• Commercial construction increased year-over-year to approximately $9.3 million at June 30, 2015 from approximately $2.3 million at June 30, 2014
Other Highlights:
• From June 30, 2014 to June 30, 2015, total assets increased 3.7 percent to $436 million
“We remain focused on growing value for all of our Cornerstone stakeholders,” said Cornerstone’s Chairman Miller Welborn. “This was another solid quarter of performance and positive momentum for Cornerstone, which positions us ideally for the upcoming merger with SmartFinancial.”
Cornerstone announced the signing of a definitive agreement to merge holding companies with SmartFinancial, Inc., parent company of SmartBank, based in Pigeon Forge, on Dec. 8, 2014. At its Annual Meeting of Shareholders Meeting on June 17, Cornerstone shareholders voted in favor of approving the merger. Upon its completion, the merger is expected to create a $1 billion [approximately] holding company under the name SmartFinancial. The merged company will apply to be listed for trading on the Nasdaq Capital Market. While the banks will initially operate under their separate charters in their respective markets, plans are for the banks to eventually merge under the SmartBank name.
“This is an exciting time for Cornerstone and our shareholders,” said Mr. Welborn. “The merger gives us the size and scale to go on offense and better compete in this new banking environment. By combining our strengths, resources and earnings potential, we are building a solid foundation for a very bright future.”
Cornerstone is a single-bank holding company, with approximately $436 million in assets, serving the Chattanooga MSA, with five branches throughout Chattanooga and one loan production office in Dalton. Locally owned and locally operated, Cornerstone specializes in providing a comprehensive range of customized financial solutions for businesses and individuals.