Exhibit 99.1

 

Cornerstone Bancshares, Inc.

Reports Positive Earnings for Second Quarter of 2015

 

CHATTANOOGA, TN – July 27, 2015 — Cornerstone Bancshares, Inc. (“Cornerstone”; OTCBB: CSBQ; CSBQP), parent company of Cornerstone Community Bank (“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, 2015 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% decrease in foreclosed assets

·

68.8% decrease in non-performing loans

·

Non-performing loans to total loans ratio decreased from 1.0% to 0.3%

 

Core Earnings:

 

·

Total loans increased 6.0% from June 30, 2014 to June 30, 2015 and 4.7% from March 31, 2015 to June 30, 2015

·

Cornerstone’s net interest margin strengthened to 4.0% for the six months ended June 30, 2015 from 3.9% 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% 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.”

 

On December 8, 2014, Cornerstone announced the signing of a definitive agreement to merge holding companies with SmartFinancial, Inc., parent company of SmartBank, based in Pigeon Forge, TN. At its Annual Meeting of Shareholders Meeting on June 17, 2015, 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 Welborn. “The merger gives us the size and scale to go on offense and better compete in this new banking environment,” he said. “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, Tennessee MSA, with five branches throughout Chattanooga and one loan production office in Dalton, Georgia. Locally owned and locally operated, Cornerstone specializes in providing a comprehensive range of customized financial solutions for businesses and individuals.

 

Media & Investor Relations Contact

Frank Hughes, President & CEO

Cornerstone Bancshares, Inc.

423-385-3009

 

 

Forward-Looking Statements

 

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, 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 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.

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Second Quarter Financial Highlights

June 30, 2015 and 2014

(Unaudited)

 

(Amounts in thousands, except per common share data)		2015				2014				% Change
Balance Sheet Data at June 30
Total assets		$	435,539			$	419,911				3.7
Interest-earning assets			417,686				393,879				6.0
Loans			309,850				292,369				6.0
Foreclosed assets			7,165				12,996				(44.9	)
Deposits			331,563				331,412				0.0
Other interest-bearing liabilities			54,993				46,913				17.2
Shareholders' equity			40,697				40,369				0.8
Loan to deposit ratio			93.45	%			88.22	%			5.9
Tier 1 leverage ratio (Bank, est)			9.51	%			8.91	%			6.7
Total risk-based capital ratio (Bank, est)			11.84	%			13.61	%			(13.0	)
Outstanding common shares			6,643				6,627				0.2
Book value per common share		$	3.87			$	3.84				0.8
Tangible book value per common share		$	3.87			$	3.84				0.8
Market value per common share as of June 30		$	3.98			$	2.55				56.1
Loan Quality Data
Nonaccruing loans			890				2,853				(68.8	)
Loans past due 90 days – accruing			-				-				-
Net charge-offs YTD			177				388				(54.4	)
Allowance for loan losses			3,579				3,330				7.5
Allowance for loan losses to total loans			1.16	%			1.14	%
Nonperforming assets to total assets			1.85	%			3.77	%
Performance Data for the Year
Net income		$	798			$	822				(2.9	)
Return on average assets			0.38	%			0.39	%
Return on average equity			3.92	%			4.05	%
Net interest margin			4.02	%			3.90	%
Per common share data:
Net income – basic		$	-			$	0.01
Net income – diluted		$	-			$	0.01
Common dividends		$	-			$	-
Preferred dividends & accretion		$	786			$	786
Average shares (000s):
Basic common stock			6,634				6,601
Diluted common stock			7,033				6,761
Preferred stock (actual)			600				600

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Adjusted Income Pre-tax & Pre-provision (PTPP)

Net of Security Gains, Foreclosed Assets Expense, and Merger Expense

 

		(Unaudited)
		2015								2014												Q2-15 /
		Second				First				Fourth				Third				Second				Q2-14
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter				% Chg
Net interest income		$	3,977			$	3,957			$	3,870			$	3,810			$	3,856				3.1
Total noninterest income			(76	)			373				3				-				244				(131.1	)
Sub-total			3,901				4,330				3,873				3,810				4,100				(4.9	)
Total noninterest expense			3,473				3,203				3,208				3,155				3,084				12.6
Pre-tax, pre-provision income			428				1,127				665				655				1,016				(57.9	)
Net gains from sale of securiites			(113	)			-				(129	)			(169	)			(300	)			(62.3	)
Merger related expenses			222				83				84				-				-				N/A
Net losses (gains) from sale of foreclosed assets			474				(73	)			456				504				290				63.4
Foreclosed assets expense, net			55				58				(15	)			184				73				(24.7	)
Adjusted PTPP			1,066				1,195				1,061				1,174				1,079				(1.2	)

 

Reconciliation of Non-GAAP Financial Measures		(Unaudited)
		2015								2014
		Second				First				Fourth				Third				Second
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter
Pre-tax, pre-provision income		$	428			$	1,127			$	665			$	655			$	1,016
Income tax expense			(198	)			(298	)			(253	)			(250	)			(257	)
Provision for loan losses			88				(350	)			-				-				(350	)
Net income			318				479				412				405				409
Adjusted PTPP			1,066				1,195				1,061				1,174				1,079
Net gains from sale of securities			113				-				129				169				300
Merger related expenses			(222	)			(83	)			(84	)			-				-
Net gains from sale of foreclosed assets			(474	)			73				(456	)			(504	)			(290	)
Foreclosed assets expense, net			(55	)			(58	)			15				(184	)			(73	)
Provision for loan losses			88				(350	)			-				-				(350	)
Income tax expense			(198	)			(298	)			(253	)			(250	)			(257	)
Net income			318				479				412				405				409

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Quarterly Earnings Summary

 

		(Unaudited)
		2015								2014												Q2-15 /
		Second				First				Fourth				Third				Second				Q2-14
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter				% Chg
Interest income
Loans, including fees		$	4,239			$	4,198			$	4,202			$	4,168			$	4,225				0.3
Securities and interest-bearing deposits at other financial institutions			336				347				312				327				347				(3.2	)
Federal funds sold and other earning assets			7				5				6				7				10				(30.0	)
Total interest income			4,582				4,550				4,520				4,502				4,582				-
Interest expense
Deposits			459				418				415				442				442				3.8
Short-term borrowings			18				22				26				19				21				(14.3	)
FHLB advances and other borrowing			128				153				209				231				263				(51.3	)
Total interest expense			605				593				650				692				726				(16.7	)
Net interest income			3,977				3,957				3,870				3,810				3,856				3.1
(Credit) Provision for losses			(88	)			350				-				-				350				(125.1	)
Net interest income after the  provision for loan losses			4,065				3,607				3,870				3,810				3,506				15.9
Noninterest income
Customer service fees			237				219				237				215				210				12.9
Other noninterest income			19				20				14				13				18				5.6
Net (losses) gains from sale of foreclosed assets			(474	)			73				(456	)			(504	)			(290	)			63.4
Gain on sale of assets			142				61				208				276				306				(53.6	)
Total noninterest income			(76	)			373				3				-				244				(131.1	)
Noninterest expense
Salaries and employee benefits			1,754				1,737				1,803				1,702				1,723				1.8
Net occupancy and equipment			315				287				282				315				324				(2.8	)
Depository insurance			157				155				158				163				164				(4.3	)
Foreclosed asset expense, net			55				58				(15	)			184				73				(24.7	)
Other operating expense			1,192				966				980				791				801				48.8
Total noninterest expense			3,473				3,203				3,208				3,155				3,085				12.6
Income before income taxes			516				777				665				655				666				(22.5	)
Income tax expense			198				298				253				250				257				(23.0	)
Net income		$	318			$	479			$	412			$	405			$	409				(22.2	)
Preferred stock dividends & accretion on preferred stock discount			393				393				393				393				393				(0.1	)
Net income available to common			(75	)			86				19				12				16				(566.3	)
Net income per common share:
Basic		$	(0.01	)		$	0.01			$	0.01			$	0.00			$	0.00
Diluted		$	(0.01	)		$	0.01			$	0.01			$	0.00			$	0.00
Average basic shares			6,639				6,629				6,627				6,627				6,627				0.2
Average common diluted shares			7,063				7,011				6,952				6,844				6,807				3.8
Performance Ratios
Return on average equity			3.12	%			4.70	%			4.05	%			4.01	%			4.02	%			(22.4	)
Return on average assets			0.30	%			0.46	%			0.40	%			0.39	%			0.38	%			(20.4	)
Net interest margin			3.98	%			4.07	%			3.97	%			3.86	%			3.89	%			2.3
Average equity			40,761				40,742				40,649				40,481				40,710				0.1
Average assets			420,420				414,763				409,170				416,247				426,951				(1.5	)
Average interest-earning assets			402,473				396,389				388,746				394,156				400,760				0.4

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Loan Loss Allowance and Asset Quality Review

 

		2015								2014
		Second				First				Fourth				Third				Second
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for loan losses
Balance at beginning of period		$	3,657			$	3,495			$	3,474			$	3,330			$	3,011
(Credit) provision for loan losses			(88	)			350				-				-				350
Net recoveries (charge-offs)			10				(188	)			21				145				(32	)
Balance at end of period		$	3,579			$	3,657			$	3,495			$	3,474			$	3,330
As a % of loans			1.16	%			1.24	%			1.18	%			1.16	%			1.14	%
As a % of nonperforming loans			402.01	%			252.16	%			122.00	%			96.51	%			116.72	%
As a % of nonperforming assets			44.43	%			36.66	%			32.17	%			23.81	%			21.01	%
Net charge-offs as a % of loans (a)			-0.01	%			0.26	%			-0.03	%			-0.19	%			0.04	%
Risk element assets
Accruing troubled debt restructured		$	2,778			$	2,833			$	3,903			$	3,698			$	3,787
Loans past due 30-89 days		$	1,412			$	107			$	2,162			$	2,846			$	1,365
Nonaccruing loans		$	890			$	1,450			$	2,865			$	3,600			$	2,853
Loans past due 90 days – accruing			-				-				-				-				-
Total nonperforming loans		$	890			$	1,450			$	2,865			$	3,600			$	2,853
Foreclosed assets (b) (c)		$	7,165			$	8,523			$	8,000			$	10,994			$	12,996
Total nonperforming assets		$	8,055			$	9,973			$	10,865			$	14,594			$	15,849
Nonperforming loans as a % of loans			0.29	%			0.49	%			0.97	%			1.21	%			0.98	%
Nonperforming assets as a % of loans and foreclosed assets			2.54	%			3.27	%			3.58	%			4.72	%			5.19	%
Total loans			309,850				296,033				295,364				298,390				292,369
(a) Annualized
(b) Properties sold during 2nd Q 2015		$	916
(c) Properties under contract to sell		$	1,548

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Net Interest Margin Analysis

Taxable Equivalent Basis

 

		Three months ended
		June 30
(Amounts in thousands)
Assets		2015												2014
		Average				Income/				Yield/				Average				Income/				Yield/
Earning assets:		Balance				Expense				Rate				Balance				Expense				Rate
Loans, net of unearned income		$	303,953			$	4,239				5.59	%		$	292,039			$	4,225				5.80	%
Investment securities			84,369				336				1.67	%			93,074				347				1.64	%
Other earning assets			14,151				8				0.23	%			15,647				10				0.26	%
Total earning assets			402,473			$	4,583				4.58	%			400,760			$	4,582				4.62	%
Allowance for loan losses			(3,565	)											(3,112	)
Cash and other assets			21,512												29,303
TOTAL ASSETS		$	420,420											$	426,951
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits		$	36,610			$	11				0.12	%		$	28,462			$	11				0.16	%
Savings deposits			13,675				3				0.09	%			15,054				4				0.11	%
MMDA's			60,471				58				0.38	%			65,740				61				0.37	%
Time deposits			164,292				387				0.94	%			160,174				366				0.92	%
Federal funds purchased and securities sold under agreements to repurchase			19,464				18				0.37	%			22,580				21				0.37	%
Federal Home Loan Bank and other borrowings			31,000				129				1.67	%			27,776				263				3.80	%
Total interest-bearing liabilities			325,512				606				0.75	%			319,786				726				0.91	%
Net interest spread						$	3,977				3.83	%						$	3,856				3.71	%
Noninterest-bearing demand deposits			53,044												65,528
Accrued expenses and other liabilities			1,103												927
Shareholders' equity			40,761												40,710
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	420,420											$	426,951
Net yield on earning assets											3.98	%											3.89	%
Taxable equivalent adjustment:
Loans							0												0
Investment securities							14												33
Total adjustment							14												33

 

  

Cornerstone Bancshares, Inc. and Subsidiary
Net Interest Margin Analysis
Taxable Equivalent Basis
		Six months ended
		June 30
(Amounts in thousands)
Assets						2015												2014
		Average				Income/				Yield/				Average				Income/				Yield/
Earning assets:		Balance				Expense				Rate				Balance				Expense				Rate
Loans, net of unearned income		$	299,565			$	8,437				5.68	%		$	291,935			$	8,321				5.75	%
Investment securities			86,504				683				1.66	%			94,513				777				1.81	%
Other earning assets			13,379				13				0.20	%			13,760				17				0.25	%
Total earning assets			399,448			$	9,133				4.63	%			400,208			$	9,115				4.63	%
Allowance for loan losses			(3,483	)											(3,109	)
Cash and other assets			21,604												29,519
TOTAL ASSETS		$	417,569											$	426,618
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits		$	34,470			$	20				0.12	%		$	28,218			$	20				0.14	%
Savings deposits			13,703				7				0.10	%			15,216				7				0.09	%
MMDA's			61,937				115				0.37	%			65,521				116				0.36	%
Time deposits			159,168				735				0.93	%			160,278				741				0.93	%
Federal funds purchased and securities
sold under agreements to repurchase			24,258				40				0.33	%			22,074				39				0.36	%
Federal Home Loan Bank and other borrowings			31,409				282				1.81	%			29,708				525				3.56	%
Total interest-bearing liabilities			324,945				1,199				0.74	%			321,015				1,448				0.91	%
Net interest spread						$	7,934				3.89	%						$	7,667				3.72	%
Noninterest-bearing demand deposits			50,754												64,310
Accrued expenses and other liabilities			1,118												714
Shareholders' equity			40,752												40,579
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY		$	417,569											$	426,618
Net yield on earning assets											4.02	%											3.90	%
Taxable equivalent adjustment:
Loans							0												0
Investment securities							31												72
Total adjustment							31												72

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Loan Stratification

 

		2015								2014
		Second				% of				Second				% of				% Dollar
(Amounts in thousands)		Quarter				Total				Quarter				Total				Change
Non-residential real estate
Owner occupied		$	73,179				23.6			$	70,808				24.2				3.3
Non-owner occupied			76,277				24.6				71,306				24.4				7.0
Multi-family real estate			8,338				2.7				8,375				2.9				(0.4	)
1-4 family construction			10,856				3.5				10,879				3.7				(0.2	)
Multi-family and commercial construction			9,350				3.0				2,255				0.8				314.6
Commercial land and lot development			18,436				5.9				14,322				4.9				28.7
Total non-residential real estate			196,436				63.4				177,945				60.9				10.4
Residential real estate
First mortgage - 1-4 family			44,982				14.5				47,027				16.1				(4.3	)
Second mortgage - 1-4 family			1,361				0.4				1,731				0.6				(21.4	)
Home equity lines			22,025				7.1				18,482				6.3				19.2
Total residential real estate			68,368				22.1				67,240				23.0				1.7
Total real estate loans			264,804				85.5				245,185				83.9				8.0
Commercial			39,012				12.6				37,253				12.7				4.7
Agricultural & other			3,876				1.3				7,157				2.4				(45.8	)
Consumer			2,158				0.7				2,774				0.9				(22.2	)
Total loans, net of unearned fees		$	309,850				100.0			$	292,369				100.0				6.0

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Consolidated Balance Sheets

 

		Unaudited
		June 30,				December 31,
		2015				2014
ASSETS
Cash and due from banks		$	2,355,547			$	1,930,751
Interest-bearing deposits at other financial institutions			31,010,120				13,596,970
Total cash and cash equivalents			33,365,667				15,527,721
Securities available for sale			74,481,436				87,192,909
Securities held to maturity (fair value $22,291 and $25,702 at June 30, 2015 and December 31, 2014, respectively)			22,131				25,428
Federal Home Loan Bank stock, at cost			2,322,900				2,322,900
Loans, net of allowance for loan losses of $3,579,280 and $3,495,129 at June 30, 2015 and December 31, 2014, respectively			306,270,553				291,869,338
Bank premises and equipment, net			6,199,666				4,828,123
Accrued interest receivable			1,072,137				1,142,899
Foreclosed assets			7,165,227				8,000,365
Other assets			4,639,533				4,830,113
Total assets		$	435,539,250			$	415,739,796
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand deposits		$	53,469,722			$	57,034,792
Interest-bearing demand deposits			38,166,656				26,464,173
Savings deposits and money market accounts			76,739,986				80,861,110
Time deposits			163,187,036				144,294,390
Total deposits			331,563,400				308,654,465
Accrued interest payable			104,070				71,925
Federal funds purchased and securities sold under agreements to repurchase			23,992,994				29,409,505
Federal Home Loan Bank advances and other borrowings			31,000,000				36,000,000
Other liabilities			8,182,161				941,796
Total liabilities			394,842,625				375,077,691
Stockholders' equity:
Preferred stock - no par value; 2,000,000 shares authorized; 600,000 shares issued and outstanding in 2015 and 2014			15,000,000				14,964,309
Common stock - $1.00 par value; 20,000,000 shares authorized; 6,709,199 shares issued in 2015 and 2014; 6,643,341 and 6,627,398 shares outstanding in 2015 and 2014, respectively			6,643,341				6,627,398
Additional paid-in capital			21,972,860				21,821,060
Accumulated deficit			(3,020,401	)			(3,032,551	)
Accumulated other comprehensive income			100,825				281,889
Total stockholders' equity			40,696,625				40,662,105
Total liabilities and stockholders' equity		$	435,539,250			$	415,739,796

 

The Notes to Consolidated Financial Statements are an integral part of these statements.

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Consolidated Statements of Income

 

		Unaudited								Unaudited
		Three months ended								Six months ended
		June 30,								June 30,
		2015				2014				2015				2014
INTEREST INCOME
Loans, including fees		$	4,238,829			$	4,225,125			$	8,437,044			$	8,320,593
Securities and interest-bearing deposits at other financial institutions			335,766				346,507				682,829				776,997
Federal funds sold			7,932				10,112				13,203				17,275
Total interest income			4,582,527				4,581,744				9,133,076				9,114,865
INTEREST EXPENSE
Time deposits			386,877				365,537				735,188				741,027
Other deposits			71,903				75,965				141,655				143,039
Federal funds purchased and securities sold under agreements to repurchase			17,773				20,621				40,180				39,281
Federal Home Loan Bank advances and other borrowings			128,754				263,201				281,709				524,611
Total interest expense			605,307				725,324				1,198,732				1,447,958
Net interest income before provision for loan losses			3,977,220				3,856,420				7,934,344				7,666,907
(Credit) provision for loan losses			(88,368	)			350,000				261,632				515,000
Net interest income after provision for loan losses			4,065,588				3,506,420				7,672,712				7,151,907
NONINTEREST INCOME
Customer service fees			236,750				209,538				455,333				398,449
Net gains from sale of securities			113,296				300,201				113,296				402,473
Net gains from sale of loans and other assets			28,632				6,529				89,709				25,443
Net (losses) gains from sale of foreclosed assets			(474,159	)			(290,116	)			(401,374	)			(535,093	)
Other noninterest income			19,223				18,220				39,476				30,436
Total noninterest income			(76,258	)			244,372				296,440				321,708
NONINTEREST EXPENSE
Salaries and employee benefits			1,754,728				1,722,503				3,491,400				3,549,487
Net occupancy and equipment expense			314,650				324,086				601,637				632,918
Depository insurance			156,702				164,167				312,055				318,843
Foreclosed assets, net			54,563				73,006				112,178				177,399
Other operating expenses			1,192,476				801,047				2,158,341				1,462,234
Total noninterest expenses			3,473,119				3,084,809				6,675,611				6,140,881
Income before income tax expense			516,211				665,983				1,293,541				1,332,734
Income tax expense			197,900				256,500				495,700				511,100
Net income			318,311				409,483				797,841				821,634
Preferred stock dividend requirements			375,000				375,000				750,000				750,000
Accretion on preferred stock discount			17,845				17,845				35,691				35,691
Net income available to common shareholders		$	(74,534	)		$	16,638			$	12,150			$	35,943
EARNINGS PER COMMON SHARE
Basic		$	(0.01	)		$	-			$	-			$	0.01
Diluted		$	(0.01	)		$	-			$	-			$	0.01
DIVIDENDS DECLARED PER COMMON SHARE		$	-			$	-			$	-			$	-

 

The Notes to Consolidated Financial Statements are an integral part of these statements.

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Consolidated Statement of Changes in Stockholders' Equity - Unaudited

For the six months ended June 30, 2015

 

																		Accumulated
										Additional								Other				Total
		Preferred				Common				Paid-in				Accumulated				Comprehensive				Stockholders'
		Stock				Stock				Capital				Deficit				Income				Equity
BALANCE, December 31, 2014		$	14,964,309			$	6,627,398			$	21,821,060			$	(3,032,551	)		$	281,889			$	40,662,105
Stock compensation expense			-				-				132,000				-				-				132,000
Issuance of common stock, 15,943 shares			-				15,943				19,800				-				-				35,743
Preferred stock dividends paid			-				-				-				(750,000	)			-				(750,000	)
Accretion on preferred stock			35,691				-				-				(35,691	)			-				-
Net income			-				-				-				797,841				-				797,841
Unrealized holding losses on securities available for sale, net of reclassification adjustment			-				-				-				-				(181,064	)			(181,064	)
BALANCE, June 30, 2015		$	15,000,000			$	6,643,341			$	21,972,860			$	(3,020,401	)		$	100,825			$	40,696,625

 

The Notes to Consolidated Financial Statements are an integral part of these statements.