Exhibit 99.1

 

Cornerstone Bancshares, Inc. Reports Positive Earnings for Fourth Quarter of 2014

 

CHATTANOOGA, Tenn. – January 27, 2015 -- (PR Newswire) Cornerstone Bancshares, Inc. (“Cornerstone”; OTC Bulletin Board: CSBQ; CSBQP), holding company of Cornerstone Community Bank (“Bank”), today announced net income of $412,000 for the fourth quarter of 2014, which represents a 2.1 percent increase in net income compared with the same quarter of 2013. This also marks the sixteenth consecutive quarter of positive earnings for Cornerstone.

 

Net income for the year as of December 31, 2014 was $1,638,000, which represents a 2.5 percent decrease from 2013. Other financial highlights year-over-year include:

 

·

2% increase in loans

·

12.9% increase in loan-to-deposit ratio

·

38.1% reduction in net foreclosed assets

·

9.6% increase in Tier 1 leverage ratio

·

19.7% decrease in nonaccrual loans

·

16% decrease in core transactional deposits

 

“The Board is extremely pleased with this solid performance for the year,” said Cornerstone’s Chairman Welborn. “Our focus for the new year will be on steady loan and deposit growth, increased earnings, and positioning Cornerstone favorably for our upcoming merger.”

 

On December 8, 2014, Cornerstone announced the signing of a definitive agreement to merge holding companies with SmartFinancial, Inc., parent company of SmartBank, which has seven branch locations throughout East Tennessee and the Florida Panhandle. When completed, the merger will create a nearly $1 billion banking entity under the name SmartFinancial, Inc., for which Welborn will serve as Chairman of a combined Board of Directors.

 

“We are excited for the future and the opportunities that this new partnership holds,” said Welborn. “It will give us the size and scale to compete in this new banking environment, an expanded footprint for greater growth potential, and the ability to deliver the greatest value for all of our shareholders. Pardon the pun, but it’s just a ‘smart’ move.”

 

Founded in 1996, Cornerstone is a single-bank holding company, with $416 million in assets, serving the Chattanooga, Tennessee MSA, with five full-service branch locations throughout Chattanooga. Locally owned and operated, Cornerstone specializes in providing a comprehensive range of customized financial solutions for businesses and individuals.

 

Important Information for Shareholders 

 

This communication shall not constitute an offer to sell, the solicitation of an offer to sell, or the solicitation of an offer to buy any securities or the solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed Merger, Cornerstone will file a registration statement on Form S-4 with the SEC, which will contain the joint proxy statement/prospectus of SmartFinancial and Cornerstone. Shareholders of Cornerstone and SmartFinancial are encouraged to read the registration statement, including the joint proxy statement/prospectus that will be part of the registration statement, because it will contain important information about the Merger, Cornerstone and SmartFinancial. After the registration statement is filed with the SEC, the joint proxy statement/prospectus and other relevant documents will be mailed to all Cornerstone and SmartFinancial shareholders and will be available for free on the SEC’s website (www.sec.gov). The joint proxy statement/prospectus will also be made available for free by contacting the President and CEO of SmartFinancial at (865) 868-0613 or the President and CEO of Cornerstone at 423-385-3009. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

 

 

Cornerstone, SmartFinancial and their respective directors, executive officers, and certain other members of management and employees of Cornerstone and SmartFinancial may be deemed to be participants in the solicitation of proxies in connection with the proposed Merger. Information concerning the interests of the persons who may be considered “participants” in the solicitation will be set forth in the joint proxy statement/prospectus relating to the Merger and the other relevant documents filed with the SEC when they become available. Information about the directors and executive officers of Cornerstone is also set forth in Cornerstone’s proxy statement for its 2014 annual meeting of shareholders and its Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC.

 

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 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.

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Fourth Quarter Financial Highlights

December 31, 2014 and 2013

(Unaudited) 

 

(Amounts in thousands, except per common share data)		2014				2013				% Change
Balance Sheet Data at December 31
Total assets		$	415,740			$	432,223				(3.8	)
Interest-earning assets			398,503				406,708				(2.0	)
Loans			295,364				289,440				2.0
Foreclosed assets, net			8,000				12,926				(38.1	)
Deposits			308,654				341,414				(9.6	)
Other interest-bearing liabilities			65,410				49,714				31.6
Shareholders' equity			40,662				40,134				1.3
Loan to deposit ratio			95.69	%			84.78	%			12.9
Tier 1 leverage ratio (Bank, est)			9.38	%			8.56	%			9.6
Total risk-based capital ratio (Bank, est)			13.45	%			13.10	%			2.7
Outstanding common shares			6,627				6,547				1.2
Book value per common share		$	3.88			$	3.86				0.6
Tangible book value per common share		$	3.88			$	3.86				0.6
Market value per common share as of December 31		$	3.31			$	2.37				39.7
Loan Quality Data
Nonaccruing loans			2,865				3,566				(19.7	)
Loans past due 90 days – accruing			-				-				-
Net charge-offs YTD			223				3,238				(93.1	)
Allowance for loan losses			3,495				3,203				9.1
Allowance for loan losses to total loans			1.18	%			1.11	%
Nonperforming assets to total assets			2.61	%			3.82	%
Performance Data for the Year
Net income		$	1,638			$	1,681				(2.5	)
Return on average assets			0.39	%			0.39	%
Return on average equity			4.04	%			4.12	%
Net interest margin			3.90	%			3.80	%
Per common share data:
Net income – basic		$	0.01			$	0.02
Net income – diluted		$	0.01			$	0.02
Common dividends		$	-			$	-
Average shares (000s):
Basic common stock			6,614				6,547
Diluted common stock			6,837				6,662
Preferred stock (actual)			600				600

 

 

Cornerstone Bancshares, Inc. and Subsidiary

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

Net of Security Gains & Foreclosed Assets Expense

 

 

		(Unaudited)
		2014																2013				Q4-14 /
		Fourth				Third				Second				First				Fourth				Q4-13
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter				% Chg
Net interest income		$	3,870			$	3,810			$	3,856			$	3,811			$	3,741				3.4
Total noninterest income			459				504				535				322				617				(25.6	)
Sub-total			4,329				4,314				4,391				4,133				4,358				(0.7	)
Total noninterest expense			3,664				3,659				3,375				3,301				3,704				(1.1	)
Pre-tax, pre-provision income			665				655				1,016				832				654				1.7
Net gains from sale of securiites			(129	)			(169	)			(300	)			(102	)			(227	)			N/A
Foreclosed assets expense, net			441				688				363				349				693				(36.4	)
Adjusted PTPP			977				1,174				1,079				1,079				1,120				(12.8	)

 

 

Reconciliation of Non-GAAP Financial Measures		(Unaudited)
		2014																2013
		Fourth				Third				Second				First				Fourth
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter
Pre-tax, pre-provision income		$	665			$	655			$	1,016			$	832			$	654
Income tax expense			(253	)			(250	)			(257	)			(255	)			(250	)
Provision for loan losses			-				-				(350	)			(165	)			-
Net income			412				405				409				412				404
Adjusted PTPP			977				1,174				1,079				1,079				1,120
Net gains from sale of securities			129				169				300				102				227
Foreclosed assets expense, net			(441	)			(688	)			(363	)			(349	)			(693	)
Provision for loan losses			-				-				(350	)			(165	)			-
Income tax expense			(253	)			(250	)			(257	)			(255	)			(250	)
Net income			412				405				409				412				404

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Quarterly Earnings Summary 

 

		(Unaudited)
		2014																2013				Q4-14 /
		Fourth				Third				Second				First				Fourth				Q4-13
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter				% Chg
Interest income
Loans, including fees		$	4,202			$	4,168			$	4,225			$	4,095			$	4,190				0.3
Securities and interest-bearing deposits at other financial institutions			312				327				347				431				315				(0.9	)
Federal funds sold and other earning assets			6				7				10				7				8				(25.8	)
Total interest income			4,520				4,502				4,582				4,533				4,513				0.1
Interest expense
Deposits			415				442				442				442				487				(14.8	)
Short-term borrowings			26				19				21				19				18				46.7
FHLB advances and other borrowing			209				231				263				261				267				(21.6	)
Total interest expense			650				692				726				722				772				(15.8	)
Net interest income			3,870				3,810				3,856				3,811				3,741				3.5
Provision for losses			-				-				350				165				-
Net interest income after the
provision for loan losses			3,870				3,810				3,506				3,646				3,741				3.5
Noninterest income
Customer service fees			237				215				210				189				213				11.4
Other noninterest income			14				13				18				12				13				5.2
Gain on sale of assets			208				276				307				121				391				(46.8	)
Total noninterest income			459				504				535				322				617				(25.6	)
Noninterest expense
Salaries and employee benefits			1,803				1,702				1,723				1,827				1,716				5.1
Net occupancy and equipment			282				315				324				309				324				(12.9	)
Depository insurance			158				163				164				155				162				(2.5	)
Foreclosed asset expense (1)			441				688				363				349				693				(36.4	)
Other operating expense			980				791				801				661				810				20.9
Total noninterest expense			3,664				3,659				3,375				3,301				3,705				(1.1	)
Income before income taxes			665				655				666				667				653				1.8
Income tax expense			253				250				257				255				250				1.4
Net income		$	412			$	405			$	409			$	412			$	404				2.1
Preferred stock dividends & accretion on preferred stock discount			393				393				393				393				393				(0.0	)
Net income available to common			19				12				16				19				11				69.7
Net income per common share:
Basic		$	0.01			$	0.00			$	0.00			$	0.00			$	0.00				472.7
Diluted		$	0.01			$	0.00			$	0.00			$	0.00			$	0.00				482.8
Average basic shares			6,627				6,627				6,627				6,575				6,547				1.2
Average common diluted shares			6,952				6,844				6,807				6,714				6,662				4.4
Performance Ratios
Return on average equity			4.05	%			4.01	%			4.02	%			4.08	%			3.98	%			1.8
Return on average assets			0.40	%			0.39	%			0.38	%			0.39	%			0.38	%			6.6
Net interest margin			3.97	%			3.86	%			3.89	%			3.90	%			3.76	%			5.5
Average equity			40,649				40,481				40,710				40,447				40,487				0.4
Average assets			409,170				416,247				426,951				426,282				426,660				(4.1	)
Average interest-earning assets			388,746				394,156				400,760				400,175				398,174				(2.4	)

  

(1) Includes OREO adjustments to fair value

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Loan Loss Allowance and Asset Quality Review 

 

		2014																2013
		Fourth				Third				Second				First				Fourth
(Amounts in thousands)		Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for loan losses
Balance at beginning of period		$	3,474			$	3,330			$	3,011			$	3,203			$	3,159
Provision for loan losses			-				-				350				165				-
Net charge-offs			21				145				(32	)			(357	)			44
Balance at end of period		$	3,495			$	3,474			$	3,330			$	3,011			$	3,203
As a % of loans			1.18	%			1.16	%			1.14	%			1.03	%			1.11	%
As a % of nonperforming loans			122.00	%			96.51	%			116.72	%			63.00	%			89.81	%
As a % of nonperforming assets			32.17	%			23.81	%			21.01	%			17.37	%			19.42	%
Net charge-offs as a % of  loans (a)			-0.03	%			-0.19	%			0.04	%			0.49	%			-0.06	%
Risk element assets
Accruing troubled debt restructured		$	3,903			$	3,698			$	3,787			$	3,337			$	4,251
Loans past due 30-89 days		$	2,162			$	2,846			$	1,365			$	2,193			$	2,250
Nonaccruing loans		$	2,865			$	3,600			$	2,853			$	4,779			$	3,566
Loans past due 90 days – accruing			-				-				-				-				-
Total nonperforming loans		$	2,865			$	3,600			$	2,853			$	4,779			$	3,566
Foreclosed assets (b) (c)		$	8,000			$	10,994			$	12,996			$	12,559			$	12,926
Total nonperforming assets		$	10,865			$	14,594			$	15,849			$	17,338			$	16,492
Nonperforming loans as a % of loans			0.97	%			1.21	%			0.98	%			1.63	%			1.23	%
Nonperforming assets as a % of loans
and foreclosed assets			3.58	%			4.72	%			5.19	%			5.68	%			5.45	%
Total loans			295,364				298,390				292,369				292,952				289,440
(a) Annualized
(b) Properties sold during 4thQ 2014		$	2,951
(c) Properties under contract to sell		$	116

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Net Interest Margin Analysis

Taxable Equivalent Basis

 

		Three months ended
		December 31
(Amounts in thousands)
Assets		2014												2013
		Average				Income/				Yield/				Average				Income/				Yield/
Earning assets:		Balance				Expense				Rate				Balance				Expense				Rate
Loans, net of unearned income		$	295,562			$	4,202				5.64	%		$	286,003			$	4,190				5.81	%
Investment securities			81,781				312				1.60	%			99,065				315				1.41	%
Other earning assets			11,402				6				0.21	%			13,106				8				0.23	%
Total earning assets			388,746			$	4,520				4.63	%			398,174			$	4,513				4.53	%
Allowance for loan losses			(3,500	)											(3,045	)
Cash and other assets			23,924												31,531
TOTAL ASSETS		$	409,170											$	426,660
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits		$	25,203			$	9				0.14	%		$	25,363			$	9				0.14	%
Savings deposits			13,183				3				0.09	%			14,149				5				0.15	%
MMDA's			69,906				68				0.39	%			74,607				73				0.39	%
Time deposits			148,779				334				0.89	%			160,824				400				0.99	%
Federal funds purchased and securities
sold under agreements to repurchase			23,710				27				0.45	%			21,184				18				0.33	%
Federal Home Loan Bank and other borrowings			34,522				209				2.40	%			33,095				267				3.20	%
Total interest-bearing liabilities			315,305				650				0.82	%			329,222				772				0.93	%
Net interest spread						$	3,870				3.81	%						$	3,741				3.60	%
Noninterest-bearing demand deposits			51,961												55,398
Accrued expenses and other liabilities			1,255												1,552
Shareholders' equity		$	40,649												40,487
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY		$	409,170											$	426,660
Net yield on earning assets											3.97	%											3.76	%
Taxable equivalent adjustment:
Loans							0												0
Investment securities							18												37
Total adjustment							18												37

 

 

Cornerstone Bancshares, Inc. and Subsidiary

Net Interest Margin Analysis

Taxable Equivalent Basis 

 

		Twelve months ended
		December 31
(Amounts in thousands)
Assets		2014												2013
		Average				Income/				Yield/				Average				Income/				Yield/
Earning assets:		Balance				Expense				Rate				Balance				Expense				Rate
Loans, net of unearned income		$	293,708			$	16,690				5.68	%		$	278,975			$	16,705				5.99	%
Investment securities			89,114				1,416				1.72	%			98,108				1,694				1.94	%
Other earning assets			13,615				31				0.23	%			20,749				54				0.26	%
Total earning assets			396,437			$	18,137				4.60	%			397,832			$	18,453				4.69	%
Allowance for loan losses			(3,284	)											(4,547	)
Cash and other assets			27,350												35,409
TOTAL ASSETS		$	420,503											$	428,694
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits		$	26,921			$	40				0.15	%		$	26,196			$	55				0.21	%
Savings deposits			14,536				14				0.10	%			12,718				27				0.22	%
MMDA's			68,367				259				0.38	%			76,194				392				0.51	%
Time deposits			157,112				1,428				0.91	%			165,748				1,766				1.07	%
Federal funds purchased and securities
sold under agreements to repurchase			22,026				85				0.39	%			22,041				74				0.34	%
Federal Home Loan Bank and other borrowings			30,845				964				3.13	%			31,634				1,209				3.82	%
Total interest-bearing liabilities			319,807				2,790				0.87	%			334,531				3,523				1.05	%
Net interest spread						$	15,347				3.73	%						$	14,930				3.64	%
Noninterest-bearing demand deposits			59,219												51,614
Accrued expenses and other liabilities			910												1,785
Shareholders' equity			40,567												40,764
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY		$	420,503											$	428,694
Net yield on earning assets											3.90	%											3.80	%
Taxable equivalent adjustment:
Loans							0												0
Investment securities							112												205
Total adjustment							112												205

  

 

Cornerstone Bancshares, Inc. and Subsidiary

Loan Composition

 

		2014								2013
		Fourth				% of				Fourth				% of				% Dollar
(Amounts in thousands)		Quarter				Total				Quarter				Total				Change
Non-residential real estate
Owner occupied		$	68,581				23.2			$	65,765				22.7				4.3
Non-owner occupied			74,587				25.3				64,053				22.1				16.4
Multi-family real estate			8,964				3.0				8,249				2.9				8.7
1-4 family construction			9,274				3.1				10,832				3.7				(14.4	)
Commercial land and lot development			19,973				6.8				25,254				8.7				(20.9	)
Total non-residential real estate			181,379				61.4				174,153				60.2				4.1
Residential real estate
First mortgage - 1-4 family			46,661				15.8				47,931				16.6				(2.6	)
Second mortgage - 1-4 family			1,554				0.5				1,960				0.7				(20.7	)
Home equity lines			19,728				6.7				18,175				6.3				8.5
Total residential real estate			67,943				23.0				68,066				23.5				(0.2	)
Total real estate loans			249,322				84.4				242,219				83.7				2.9
Commercial			36,247				12.3				37,221				12.9				(2.6	)
Agricultural & other			6,860				2.3				7,493				2.6				(8.4	)
Consumer			2,935				1.0				2,507				0.9				17.1
Total loans, net of unearned fees		$	295,364				100.0			$	289,440				100.0				2.0

 

 

CORNERSTONE BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

December 31, 2014 and 2013

		Unaudited
		2014				2013
ASSETS
Cash and due from banks		$	1,930,751			$	2,149,467
Interest-bearing deposits at other financial institutions			13,596,970				22,702,270
Total cash and cash equivalents			15,527,721				24,851,737
Securities available for sale			87,192,909				92,208,672
Securities held to maturity (fair value approximates
$25,702 at 2014 and $35,027 at 2013)			25,428				34,165
Federal Home Loan Bank stock, at cost			2,322,900				2,322,900
Loans, net of allowance for loan losses of
$3,495,129 in 2014 and $3,203,158 in 2013			291,869,338				286,236,578
Bank premises and equipment, net			4,828,123				4,992,449
Accrued interest receivable			1,142,899				977,925
Foreclosed assets, net			8,000,365				12,925,748
Other assets			4,830,113				7,673,179
Total assets		$	415,739,796			$	432,223,353
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand deposits		$	57,034,792			$	75,206,540
Interest-bearing demand deposits			26,464,173				24,563,987
Savings deposits and money market accounts			80,861,110				86,329,930
Time deposits			144,294,390				155,313,920
Total deposits			308,654,465				341,414,377
Accrued interest payable			71,925				82,320
Federal funds purchased and securities sold under
agreements to repurchase			29,409,505				22,974,117
Federal Home Loan Bank advances and other borrowings			36,000,000				26,740,000
Other liabilities			941,796				878,811
Total liabilities			375,077,691				392,089,625
Stockholders' equity:
Preferred stock - no par value; 2,000,000 shares authorized;
600,000 shares issued and outstanding in 2014 and 2013			14,964,309				14,892,927
Common stock - $1.00 par value; 20,000,000 shares
authorized in 2014 and 2013;
6,709,199 shares issued in 2014 and 2013;
6,627,398 and 6,547,074 shares outstanding in 2014 and 2013			6,627,398				6,547,074
Additional paid-in capital			21,821,060				21,549,883
Accumulated deficit			(3,032,551	)			(3,099,451	)
Accumulated other comprehensive income			281,889				243,295
Total stockholders' equity			40,662,105				40,133,728
Total liabilities and stockholders' equity		$	415,739,796			$	432,223,353

  

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

 

 

CORNERSTONE BANCSHARES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Years Ended December 31, 2014, 2013, and 2012 

		Unaudited
		2014				2013				2012
INTEREST INCOME
Loans, including fees		$	16,690,496			$	16,705,237			$	17,288,855
Securities and interest-bearing deposits at other financial institutions			1,416,190				1,694,292				2,003,620
Federal funds sold			30,678				53,502				60,404
Total interest income			18,137,364				18,453,031				19,352,879
INTEREST EXPENSE
Time deposits			1,427,758				1,766,237				2,471,135
Other deposits			313,105				473,921				546,812
Federal funds purchased and securities
sold under agreements to repurchase			84,641				73,903				94,402
Federal Home Loan Bank advances and other borrowings			964,351				1,208,490				1,672,478
Total interest expense			2,789,855				3,522,551				4,784,827
Net interest income before provision for loan losses			15,347,509				14,930,480				14,568,052
Provision for loan losses			515,000				300,000				430,000
Net interest income after provision for loan losses			14,832,509				14,630,480				14,138,052
NONINTEREST INCOME
Customer service fees			849,984				821,072				803,251
Other noninterest income			57,148				62,457				64,519
Net gains from sale of securities			700,390				652,421				-
Net gains from sale of loans and other assets			211,819				403,569				151,710
Total noninterest income			1,819,341				1,939,519				1,019,480
NONINTEREST EXPENSES
Salaries and employee benefits			7,054,474				6,555,059				6,327,226
Net occupancy and equipment expense			1,230,099				1,335,126				1,447,204
Depository insurance			640,097				644,918				803,902
Foreclosed assets, net			1,841,575				2,001,755				1,100,670
Other operating expenses			3,233,318				3,309,532				3,498,867
Total noninterest expenses			13,999,563				13,846,390				13,177,869
Income before income tax expense			2,652,287				2,723,609				1,979,663
Income tax expense			1,014,005				1,042,800				577,600
Net income			1,638,282				1,680,809				1,402,063
Preferred stock dividend requirements			1,500,000				1,500,000				1,229,780
Accretion on preferred stock discount			71,382				71,381				63,924
Net income available to common stockholders		$	66,900			$	109,428			$	108,359
EARNINGS PER COMMON SHARE
Basic		$	0.01			$	0.02			$	0.02
Diluted			0.01				0.02				0.02

 

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 Year Ended December 31, 2014

 

 

																		Accumulated
										Additional								Other				Total
		Preferred				Common				Paid-in				Accumulated				Comprehensive				Stockholders'
		Stock				Stock				Capital				Deficit				Income				Equity
BALANCE, December 31, 2013		$	14,892,927			$	6,547,074			$	21,549,883			$	(3,099,451	)		$	243,295			$	40,133,728
Stock compensation expense			-				-				160,500				-				-				160,500
Issuance of common stock, 80,324 shares			-				80,324				110,677				-				-				191,001
Preferred stock dividends paid			-				-				-				(1,500,000	)			-				(1,500,000	)
Accretion on preferred stock			71,382				-				-				(71,382	)			-				-
Net income			-				-				-				1,638,282				-				1,638,282
Unrealized holding gains on securities available
for sale, net of reclassification adjustment and taxes			-				-				-				-				38,594				38,594
BALANCE, December 31, 2014		$	14,964,309			$	6,627,398			$	21,821,060			$	(3,032,551	)		$	281,889			$	40,662,105

  

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