Cornerstone Bancshares Inc. reported earnings results for the third quarter and nine months ended September 30, 2009. For the quarter, the company reported net loss of $697,000 or $0.11 per share on interest income of $6,407,000 compared to net income of $860,000 or $0.14 per share on interest income of $7,462,000 for the same period a year ago. The company reported pretax loss of $1,219,000 and net interest income after provision for loan loss of $1,876,000 compared to pretax income of $1,321,000 and net interest income after provision for loan loss of $3,996,000 for the same period a year ago. Return on average assets was negative 0.57% and return on average total equity was negative 8.48% compared to return on average assets of 0.77% and return on average total equity of 9.12% for the same period a year ago. The third quarter 2009 loss was a direct result of the company's continued commitment to reduce problem assets as the bank provided $1.8 million of additional provision for loan losses. Book value per common share was $5.07 compared to book value per common share of $5.93 for the same period a year ago. For the nine months, the company reported net loss of $4,211,000 or $0.66 per share on interest income of $19,699,000 compared to net income of $2,948,000 or $0.47 per share on interest income of $23,279,000 for the same period a year ago. The company reported pretax loss of $7,021,000 and net interest income after provision for loan loss of $2,147,000 compared to pretax income of $4,564,000 and net interest income after provision for loan loss of $12,632,000 for the same period a year ago. Return on average assets was negative 1.19% and return on average total equity was negative 16.26% compared to return on average assets of 0.87% and return on average total equity of 10.51% for the same period a year ago. The company provided earnings guidance for the year 2010. The company expects earnings to improve during 2010, and expects to make $1.5 million for the year. The majority of the problem assets will be fully provided for, but the income figure for 2010 allows for $2.4 million in provision for any additional loan issues. The company had net charge-offs of $3.6 million during the third quarter.

Cornerstone Bancshares Inc. reported earnings results for the second quarter and six months ended June 30, 2009. For the quarter, the company reported net loss of $603,000 or $0.10 per share on net interest income of $3,637,000 and interest income of $6,428,000 compared to net income of $1,073,000 or $0.17 per share on net interest income of $4,533,000 and interest income of $7,757,000 for the same period last year. Pretax loss was $1,040,000 compared to pretax income of $1,672,000 for the same period last year. Negative return on average assets was 0.52% compared to positive return on average assets of 0.95% for the same period last year. Negative return on total equity was 7.12% compared to positive return on average total equity of 11.49% for the same period last year. Book value per common share was $5.17 compared to positive return on average assets of $5.87 per share for the same period last year. Net interest income after provision was $2,078,000 compared to $4,363,000 a year ago. Interest income was $6,428,000 compared to $7,757,000 a year ago. For the six months, the company reported net loss of $3,514,000 or $0.56 per share on net interest income of $7,630,000 and interest income of $13,292,000 compared to net income of $2,088,000 or $0.33 per share on net interest income of $9,124,000 and interest income of $15,817,000 for the same period last year. Pretax loss was $5,801,000 compared to pretax income of $3,243,000 for the same period last year. Negative return on average assets was 1.51% compared to positive return on average assets of 0.93% for the same period last year. Negative return on total equity was 19.86% compared to positive return on average total equity of 11.21% for the same period last year. Net interest income after provision was $346,000 compared to $8,637,000 a year ago. Interest income was $13,292,000 compared to $15,817,000 a year ago. The company provided earnings guidance for the second half, third quarter and fourth quarter of 2009. The company expects earnings to improve during the second half of 2009, and expects to break even for the third quarter and make a small profit for the fourth quarter.

Cornerstone Bancshares Inc.'s Board of Directors has approved distribution to shareholders of record a dividend payable in cash and common stock. The stock payment is payable in common stock at the rate of 0.8421%. The dividend rate means that 8.42 new dividend shares will be distributed for every 1,000 shares held on the record date. In addition, the company will pay a $0.03 cash dividend. The dividends will be issued to shareholders of record as of June 12, 2009 and will be paid July 3, 2009.