EX-99.1 2 v237719_ex99-1.htm EXHIBIT 99.1 Unassociated Document
 
Cornerstone Bancshares, Inc. Announces 3rd Quarter 2011 Financial Results
 
CHATTANOOGA, Tenn.—(PR Newswire)—October 20, 2011—Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ) today announced the following:
 
Cornerstone Bancshares, Inc. (“Cornerstone”) of Chattanooga, TN, parent company of Cornerstone Community Bank (the “Bank”),  reported positive net income of $524,000 for the third quarter of 2011, an increase of 145 percent compared with $214,000 during the third quarter of 2010.  This marks a third consecutive quarter of positive earnings for Cornerstone, bringing the company’s net income for the year to $917,000 or $0.09 per diluted Common share, an increase of 59 percent compared with $576,000 during the first nine months of 2010.
 
“I’m extremely pleased with the progress made thus far and where we stand today,” said Cornerstone’s President Frank Hughes.  “At every level and in every department, our Cornerstone team has really pulled together and put forth the effort to help us regain our solid earnings footprint and return to greater profitability.”
 
Cornerstone’s increase in net income was driven by several factors:  First, net interest income remained relatively stable quarter over previous year’s quarter, with only a four percent decrease in its net interest income.  Second, Cornerstone’s loan portfolio asset quality stabilized, and only a minor loan loss provision was required.  Third, the Bank saw a material reduction in non-interest expense that offset last year’s securities gains.   Cornerstone’s nonperforming assets decreased slightly and show signs of significant improvement as a large percentage of the Bank’s non-accruing loans will finish the collection process in the next two quarters.  Past-due loans remained below peer Bank levels and remain a positive indicator that the Bank’s general asset quality will improve over the next several quarters.  Net charge-offs were $65,000 for the third quarter of 2011, compared to $1.4 million for the third quarter of 2010. Cornerstone’s allowance for loan losses was $6.9 million or 2.54 percent of total loans as of September 30, 2011, compared to $6.3 million or 2.15 percent as of September 30, 2010.  The Bank is aggressively acting to originate loans in order to support its strategic plan of reducing its risk profile and improving its loan stratification. These steps place the Bank in a positive position to move forward as the capital campaign progresses.
 
To date, Cornerstone has been successful in raising more than $7.5 million in capital through a Preferred Stock Offering launched in the third quarter of 2010.  Extended through December 31, 2011, the Offering features a new security with a 10 percent cumulative annual dividend, and is convertible into common stock after five years and a 50 percent increase in common stock value over the preferred stock’s strike price.
 
“We are proud of Cornerstone’s heritage and solid reputation in the local market,” said Cornerstone’s Chairman Miller Welborn.  “With recent investments by Volkswagen, Amazon, Wacker and other major corporations in Chattanooga, prospects for the local economy are very bright indeed,” he said. “Given our improvement and continued strides in the right direction, I have every reason to be optimistic for the future of Cornerstone.”
 
Cornerstone is a single-bank holding company with $426 million in assets, serving the Chattanooga, Tennessee MSA.  Locally owned and locally operated, Cornerstone Community Bank was founded in 1996, and is one of Chattanooga’s oldest and largest community banks.  With five branches serving the Hamilton County area and one loan production office in Dalton, Georgia, Cornerstone Community Bank specializes in providing a comprehensive range of customized financial solutions for businesses and individuals.

 
 

 
 
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
Third Quarter Financial Highlights
September 30, 2011 and 2010
(Unaudited)
                   
                   
(Amounts in thousands, except per common share data)
 
2011
   
2010
   
% Change
 
Balance Sheet Data at September 30
                 
Total assets
  $ 426,365     $ 483,351       (11.8 )
Interest-earning assets
    391,452       459,720       (14.9 )
Loans
    270,401       292,046       (7.4 )
Foreclosed assets
    18,255       13,427       36.0  
Deposits
    322,552       351,367       (8.2 )
Other interest-bearing liabilities
    69,099       98,947       (30.2 )
Shareholders' equity
    32,447       30,965       4.8  
Loan to deposit ratio
    83.83 %     83.12 %     0.9  
Tier 1 leverage ratio (Bank)
    6.65 %     6.20 %     7.3  
Total risk-based capital ratio (Bank)
    11.12 %     11.31 %     (1.7 )
Outstanding common shares (000s)
    6,500       6,500       -  
Book value per common share
  $ 3.87     $ 4.76       (18.8 )
Tangible book value per common share
  $ 3.86     $ 4.37       (11.5 )
Market value per common share as of September 30
  $ 1.03     $ 1.55       (33.5 )
                         
Loan Quality Data
                       
Nonaccruing loans
    8,559       10,491       (18.4 )
Loans past due 90 days – accruing
    -       -       -  
Net charge-offs YTD
    2,413       2,795       (13.7 )
Allowance for loan losses
    6,864       6,271       9.5  
Allowance for loan losses to total loans
    2.54 %     2.15 %        
Nonperforming assets to total assets
    6.29 %     4.95 %        
                         
Performance Data for the Year
                       
Net income
  $ 917     $ 576       59.2  
Return on average assets
    0.28 %     0.15 %        
Return on average equity
    4.27 %     2.61 %        
Net interest margin
    3.51 %     3.45 %        
Per common share data:
                       
Net income – basic
  $ 0.09     $ 0.09          
Net income – diluted
  $ 0.09     $ 0.09          
Common dividends
  $ -     $ -          
Preferred dividends
  $ 1.25     $ -          
Average shares (000s):
                       
Basic common stock
    6,500       6,500          
Diluted common stock
    6,500       6,500          
Preferred stock (actual shares outstanding)
    300       115          

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Loan Loss Allowance and Asset Quality Review

    2011    
2010
 
   
Third
   
Second
   
First
   
Fourth
   
Third
 
(Amounts in thousands)
 
Quarter
   
Quarter
   
Quarter
   
Quarter
   
Quarter
 
                               
Allowance for loan losses
                             
Balance at beginning of period
  $ 6,814     $ 7,914     $ 9,132     $ 6,271     $ 6,967  
Provision for loan losses
    115       15       15       4,130       681  
Net charge-offs
    (65 )     (1,115 )     (1,233 )     (1,269 )     (1,377 )
Balance at end of period
  $ 6,864     $ 6,814     $ 7,914     $ 9,132     $ 6,271  
                                         
As a % of loans
    2.54 %     2.52 %     2.89 %     3.20 %     2.15 %
As a % of nonperforming loans
    80.20 %     94.21 %     126.20 %     66.99 %     61.26 %
As a % of nonperforming assets
    25.60 %     24.97 %     29.60 %     34.54 %     26.50 %
                                         
Net charge-offs as a % of  loans (a)
    0.10 %     1.65 %     1.80 %     1.78 %     1.89 %
                                         
Risk element assets
                                       
Accruing troubled debt restructured
  $ 2,535     $ 1,750     $ 1,650     $ 848     $ 5,853  
Loans past due 30-89 days
  $ 2,048     $ 1,957     $ 8,434     $ 2,306     $ 1,500  
                                         
Nonaccruing loans
  $ 8,559     $ 7,233     $ 6,271     $ 13,633     $ 10,237  
Loans past due 90 days – accruing
    -       -       -       -       -  
Total nonperforming loans
  $ 8,559     $ 7,233     $ 6,271     $ 13,633     $ 10,237  
Repossessed assets
    -       -       -       150       285  
Other real estate owned (b)(c)(d)
  $ 18,255     $ 20,058     $ 20,464     $ 12,659     $ 13,142  
Total nonperforming assets
  $ 26,814     $ 27,291     $ 26,735     $ 26,442     $ 23,664  
                                         
Nonperforming loans as a % of loans
    3.17 %     2.68 %     2.29 %     4.78 %     3.51 %
Nonperforming assets as a % of loans and other real estate owned
    9.29 %     9.40 %     9.09 %     8.88 %     7.75 %
                                         
Total loans
    270,401       270,171       273,750       285,247       292,046  
                                         
(a) Annualized
                                       
(b) Properties sold since quarter-end
  $ 1,470                                  
(c) Properties rented
  $ 8,724                                  
(d) Properties under contract to sell
  $ 292                                  

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Net Interest Margin Analysis
Taxable Equivalent Basis

   
Three months ended
 
   
September 30
 
    2011     2010  
   
Average
   
Income/
   
Yield/
   
Average
   
Income/
   
Yield/
 
(Amounts in thousands)
 
Balance
   
Expense
   
Rate
   
Balance
   
Expense
   
Rate
 
Assets
                                   
Earning assets:
                                   
Loans, net of unearned income
  $ 269,715     $ 4,531       6.67 %   $ 305,743     $ 5,160       6.70 %
Investment securities
    108,963       574       2.40 %     116,930       754       2.82 %
Other earning assets
    18,193       9       0.20 %     35,540       19       0.22 %
Total earning assets
    396,872     $ 5,114       5.20 %     458,213     $ 5,933       5.20 %
Allowance for loan losses
    (6,792 )                     (6,655 )                
Cash and other assets
    33,120                       37,213                  
TOTAL ASSETS
  $ 423,200                     $ 488,771                  
                                                 
Liabilities and Shareholders' Equity
                                               
                                                 
Interest-bearing liabilities:
                                               
Interest-bearing demand deposits
  $ 24,197     $ 20       0.33 %   $ 31,858     $ 25       0.31 %
Savings deposits
    9,772       13       0.51 %     9,547       12       0.50 %
MMDA's
    30,975       79       1.01 %     22,961       56       0.97 %
Time deposits
    218,622       900       1.63 %     270,204       1,386       2.04 %
Federal funds purchased and securities sold under agreements to repurchase
    23,250       33       0.57 %     23,256       32       0.55 %
Federal Home Loan Bank and other borrowings
    43,078       465       4.29 %     62,612       665       4.21 %
Total interest-bearing liabilities
    349,894       1,510       1.71 %     420,438       2,176       2.05 %
Net interest spread
          $ 3,604       3.49 %           $ 3,757       3.15 %
Noninterest-bearing demand deposits
    41,800                       36,875                  
Accrued expenses and other liabilities
    (64 )                     1,103                  
Shareholders' equity
    31,569                       30,355                  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $ 423,200                     $ 488,771                  
Net yield on earning assets
                    3.69 %                     3.32 %
                                                 
Taxable equivalent adjustment:
                                               
Loans
            0                       0          
Investment securities
            85                       77          
Total adjustment
            85                       77          

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Net Interest Margin Analysis
Taxable Equivalent Basis

   
Nine months ended
 
   
September 30
 
    2011     2010  
   
Average
   
Income/
   
Yield/
   
Average
   
Income/
   
Yield/
 
(Amounts in thousands)
 
Balance
   
Expense
   
Rate
   
Balance
   
Expense
   
Rate
 
Assets
                                   
Earning assets:
                                   
Loans, net of unearned income
  $ 275,267     $ 13,692       6.65 %   $ 318,985     $ 16,602       6.96 %
Investment securities
    112,850       1,763       2.38 %     134,262       3,099       3.32 %
Other earning assets
    22,496       38       0.22 %     39,634       65       0.22 %
Total earning assets
    410,613     $ 15,493       5.12 %     492,881     $ 19,766       5.42 %
Allowance for loan losses
    (7,707 )                     (6,484 )                
Cash and other assets
    32,538                       31,015                  
TOTAL ASSETS
  $ 435,444                     $ 517,412                  
                                                 
Liabilities and Shareholders' Equity
                                               
                                                 
Interest-bearing liabilities:
                                               
Interest-bearing demand deposits
  $ 26,717     $ 65       0.33 %   $ 34,125     $ 91       0.36 %
Savings deposits
    9,737       37       0.51 %     9,124       35       0.51 %
MMDA's
    27,137       202       1.00 %     22,875       164       0.96 %
Time deposits
    233,079       2,964       1.70 %     292,184       4,689       2.15 %
Federal funds purchased and securities sold under agreements to repurchase
    23,391       98       0.56 %     23,565       99       0.56 %
Federal Home Loan Bank and other borrowings
    49,329       1,590       4.31 %     68,215       2,205       4.32 %
Total interest-bearing liabilities
    369,390       4,957       1.79 %     450,088       7,283       2.16 %
Net interest spread
          $ 10,536       3.33 %           $ 12,483       3.26 %
Noninterest-bearing demand deposits
    37,463                       41,341                  
Accrued expenses and other liabilities
    (81 )                     (3,399 )                
Shareholders' equity
    28,672                       29,382                  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  $ 435,444                     $ 517,412                  
Net yield on earning assets
                    3.51 %                     3.45 %
                                                 
Taxable equivalent adjustment:
                                               
Loans
            0                       0          
Investment securities
            246                       232          
Total adjustment
            246                       232          

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Quarterly Earnings Summary

         
(Unaudited)
                         
         
2011
         
2010
    Q3-11 /  
   
Third
   
Second
   
First
   
Fourth
   
Third
    Q3-10  
(Amounts in thousands)
 
Quarter
   
Quarter
   
Quarter
   
Quarter
   
Quarter
   
% Chg
 
Interest income
                                     
Loans, including fees
  $ 4,531     $ 4,521     $ 4,639     $ 4,896     $ 5,160       (12.2 )
Investment securities
    574       621       568       534       754       (23.9 )
Other earning assets
    9       17       11       15       19       (51.9 )
Total interest income
    5,114       5,159       5,218       5,445       5,933       (13.8 )
Interest expense
                                               
Deposits
    1,012       1,112       1,145       1,239       1,478       (31.5 )
Short-term borrowings
    33       34       31       28       32       4.5  
FHLB advances and other borrowings
    465       545       580       651       666       (30.2 )
Total interest expense
    1,510       1,691       1,756       1,918       2,176       (30.6 )
Net interest income
    3,604       3,468       3,462       3,527       3,757       (4.1 )
Provision for loan losses
    115       15       15       4,130       681       (83.1 )
Net interest income after the provision for loan losses
    3,489       3,453       3,447       (603 )     3,076       13.4  
Noninterest income
                                               
Customer service fees
    216       225       215       280       309       (30.0 )
Other noninterest income
    15       22       20       63       34       (55.8 )
Gain / (loss) on sale of assets
    92       69       34       (681 )     544       (83.1 )
Total noninterest income
    323       316       269       (338 )     887       (63.6 )
Noninterest expense
                                               
Salaries and employee benefits
    1,459       1,502       1,542       1,515       1,525       (4.3 )
Net occupancy and equipment
    362       350       406       380       397       (8.8 )
Depository insurance
    234       241       322       350       386       (39.4 )
Goodwill impairment
    -       -       -       2,541       -       -  
Foreclosed asset expense (1)
    306       716       -       -       -       N/A  
Other operating expense
    715       847       1,145       1,255       1,372       (47.9 )
Total noninterest expense
    3,076       3,656       3,415       6,041       3,680       (16.4 )
Income (loss) before income taxes
    736       113       301       (6,982 )     283       160.3  
Income tax (benefit) expense
    212       (28 )     49       (1,699 )     69       206.1  
Net income (loss)
  $ 524     $ 141     $ 252     $ (5,283 )   $ 214       145.5  
                                                 
Preferred stock dividends & accretion on preferred stock discount
    131       102       92       34       -          
                                                 
Net income (loss) per common share:
                                               
Basic
  $ 0.06     $ 0.01     $ 0.02     $ (0.82 )   $ 0.03       83.9  
Diluted
  $ 0.06     $ 0.01     $ 0.02     $ (0.82 )   $ 0.03       83.9  
Average basic shares (000s)
    6,500       6,500       6,500       6,500       6,500       -  
Average common diluted shares (000s)
    6,500       6,500       6,500       6,500       6,500       -  
Performance Ratios
                                               
Return on average equity
    6.64 %     2.04 %     3.78 %     -67.91 %     2.81 %     136.0  
Return on average assets
    0.50 %     0.13 %     0.23 %     -4.66 %     0.17 %     183.5  
Net interest margin
    3.69 %     3.42 %     3.44 %     3.36 %     3.36 %     9.8  
Average equity
    31,569       27,712       26,683       31,120       30,355       4.0  
Average assets
    423,200       445,472       437,821       453,665       488,771       (13.4 )
Average interest-earning assets
    396,872       416,605       418,263       425,789       458,213       (13.4 )

(1) Includes OREO adjustments to fair value

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Loan Stratification

   
2011
         
2010
             
   
Third
   
% of
   
Third
   
% of
   
% Dollar
 
(Amounts in thousands)
 
Quarter
   
Total
   
Quarter
   
Total
   
Change
 
Non-residential real estate
                             
Owner occupied
  $ 63,405       23.4     $ 68,998       23.6       (8.1 )
Non-owner occupied
    62,009       22.9       65,091       22.3       (4.7 )
Multi-family real estate
    10,692       4.0       12,871       4.4       (16.9 )
1-4 family construction
    6,346       2.3       4,320       1.5       46.9  
Commercial land and lot development
    19,483       7.2       22,162       7.6       (12.1 )
Total non-residential real estate
    161,935       59.9       173,442       59.4       (6.6 )
Residential real estate
                                       
First mortgage – 1-4 family
    41,334       15.3       41,753       14.3       (1.0 )
Second mortgage - 1-4 family
    4,225       1.6       4,709       1.6       (10.3 )
Home equity lines
    12,215       4.5       10,113       3.5       20.8  
Total residential real estate
    57,774       21.4       56,575       19.4       2.1  
Total real estate loans
    219,709       81.3       230,017       78.8       (4.5 )
                                         
Commercial
    38,955       14.4       50,127       17.2       (22.3 )
Agricultural & other
    8,938       3.3       8,581       2.9       4.2  
Consumer
    2,799       1.0       3,321       1.1       (15.7 )
Total loans, net of unearned fees
  $ 270,401       100.0     $ 292,046       100.0       (7.4 )

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets

   
Unaudited
       
   
September 30,
   
December 31,
 
   
2011
   
2010
 
             
ASSETS
           
             
Cash and cash equivalents
  $ 32,934,352     $ 22,981,952  
                 
Securities available for sale
    93,666,153       108,250,434  
Securities held to maturity
    75,810       95,702  
Federal Home Loan Bank stock, at cost
    2,322,900       2,322,900  
Loans, net of allowance for loan losses of $6,864,196 at September 30, 2011 and $9,132,171 at December 31, 2010
    263,536,587       276,114,617  
Bank premises and equipment, net
    5,676,290       8,047,370  
Accrued interest receivable
    1,337,407       1,326,480  
Foreclosed assets
    18,254,741       12,808,838  
Other assets
    8,560,558       9,551,121  
Total Assets
  $ 426,364,798     $ 441,499,414  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Deposits:
               
Noninterest-bearing demand deposits
  $ 40,115,385     $ 28,980,043  
Interest-bearing demand deposits
    22,773,718       24,834,214  
Savings deposits and money market accounts
    43,477,203       34,041,672  
Time deposits
    216,185,314       247,591,161  
Total deposits
    322,551,620       335,447,090  
Federal funds purchased and securities sold under agreements to repurchase
    26,053,577       24,325,372  
Federal Home Loan Bank advances and other borrowing
    43,045,000       54,715,000  
Accrued interest payable
    90,706       176,761  
Other liabilities
    2,176,468       1,016,038  
Total Liabilities
    393,917,371       415,680,261  
                 
Stockholders' Equity
               
Preferred stock - no par value; 2,000,000 shares authorized; 300,060 shares issued and outstanding in 2011 114,540 shares issued and outstanding in 2010
    7,300,221       2,727,424  
Common stock - $l.00 par value; 20,000,000 shares authorized; 6,709,199 shares issued in 2011 and 2010; 6,500,396 shares outstanding in 2011 and 2010
    6,500,396       6,500,396  
Additional paid-in capital
    21,296,653       21,237,298  
Retained deficit
    (3,725,732 )     (4,317,130 )
Accumulated other comprehensive income
    1,075,889       (328,835 )
Total Stockholders' Equity
    32,447,427       25,819,153  
Total Liabilities and Stockholders' Equity
  $ 426,364,798     $ 441,499,414  

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Consolidated Statements of Income

   
Unaudited
   
Unaudited
 
   
Three months ended
   
Nine months ended
 
   
September 30
   
September 30
 
   
2011
   
2010
   
2011
   
2010
 
INTEREST INCOME
                       
Loans, including fees
  $ 4,531,390     $ 5,159,963     $ 13,691,565     $ 16,602,155  
Securities
    573,699       753,783       1,763,479       3,099,362  
Federal funds sold & other earning assets
    9,269       19,289       37,597       64,682  
Total interest income
    5,114,358       5,933,035       15,492,641       19,766,199  
                                 
INTEREST EXPENSE
                               
Time deposits
    899,554       1,385,938       2,963,779       4,689,208  
Other deposits
    111,985       92,437       304,533       289,766  
Federal funds purchased and securities sold under agreements to repurchase
    33,135       31,649       97,850       99,206  
FHLB advances and other borrowings
    465,534       665,961       1,590,605       2,204,961  
Total interest expense
    1,510,208       2,175,985       4,956,767       7,283,141  
                                 
Net interest income before provision for loan losses
    3,604,150       3,757,050       10,535,874       12,483,058  
Provision for loan losses
    115,000       681,000       145,000       3,161,000  
Net interest income after the provision for loan losses
    3,489,150       3,076,050       10,390,874       9,322,058  
                                 
NONINTEREST INCOME
                               
Customer service fee
    216,163       308,579       656,877       992,619  
Other noninterest income
    15,256       14,214       57,066       55,585  
Net gains from sale of loans and other assets
    91,993       1,093,212       195,279       1,862,685  
Total noninterest income
    323,412       1,416,005       909,222       2,910,889  
                                 
NONINTEREST EXPENSE
                               
Salaries and employee benefits
    1,458,951       1,525,311       4,503,489       4,679,871  
Net occupancy and equipment expense
    361,513       397,461       1,118,127       1,121,150  
Depository insurance
    233,587       385,722       797,747       915,365  
Foreclosed asset expense
    306,860       905,504       1,384,935       1,898,022  
Other operating expense
    715,858       995,082       2,346,493       2,879,029  
Total noninterest expense
    3,076,769       4,209,080       10,150,791       11,493,437  
                                 
Income before provision for income taxes
    735,793       282,975       1,149,305       739,510  
Provision for income taxes
    212,125       69,301       232,075       163,903  
                                 
NET  INCOME
  $ 523,668     $ 213,674     $ 917,230     $ 575,607  
                                 
Preferred stock dividends
    118,013       -       303,413       -  
Accretion on preferred stock dividend
    13,419       -       22,419       -  
                                 
Net income available to common shareholders
  $ 392,236     $ 213,674     $ 591,398     $ 575,607  
                                 
EARNINGS PER COMMON SHARE
                               
Basic net income per common share
  $ 0.06     $ 0.03     $ 0.09     $ 0.09  
Diluted net income per common share
  $ 0.06     $ 0.03     $ 0.09     $ 0.09  
                                 
DIVIDENDS DECLARED PER COMMON SHARE
  $ -     $ -     $ -     $ -  

 
 

 

Cornerstone Bancshares, Inc. and Subsidiary
Consolidated Statement of Changes in Stockholders' Equity - Unaudited
For the nine months ended September 30, 2011

                                 
Accumulated
       
                     
Additional
         
Other
   
Total
 
   
Comprehensive
   
Preferred
   
Common
   
Paid-in
   
Retained
   
Comprehensive
   
Stockholders'
 
   
Income
   
Stock
   
Stock
   
Capital
   
Deficit
   
Income
   
Equity
 
                                           
BALANCE, December 31, 2010
        $ 2,727,424     $ 6,500,396     $ 21,237,298     $ (4,317,130 )   $ (328,835 )   $ 25,819,153  
Employee compensation stock option expense
          -       -       59,355       -       -       59,355  
Issuance of Series A Convertible Preferred Stock
          4,550,378       -       -               -       4,550,378  
Preferred stock dividend
          -       -       -       (303,413 )     -       (303,413 )
Accretion on preferred stock
          22,419       -       -       (22,419 )     -       -  
Comprehensive income:
                                                     
Net income
  $ 917,230       -       -       -       917,230       -       917,230  
Other comprehensive income, net of tax:
                                                       
Unrealized holding gains on securities available for sale, net of reclassification adjustment
    1,404,724       -       -       -       -       1,404,724       1,404,724  
Total comprehensive income
  $ 2,321,954                                                  
                                                         
BALANCE, September 30, 2011
          $ 7,300,221     $ 6,500,396     $ 21,296,653     $ (3,725,732 )   $ 1,075,889     $ 32,447,427