The parent company of Cornerstone Community Bank has raised more than $10 million from its stock offering launched nearly two years ago to help shore up its capital following hefty losses during the recession.
Cornerstone Bancshares, Inc., announced Friday that it had received stock investments totaling $10.05 million, or more than two-thirds of the $15 million stock offering begun in 2010. Miller Welborn, chairman of Cornerstone, said the bank decided to extend the stock offering through June and sell additional shares on a first-come, first-served basis.
"We are thrilled with the success of this campaign, especially given the current economic environment and financial sector climate as a whole," Welborn said in a statement. "Our customers, employees and the Chattanooga community at large really rallied to support this offering."
Cornerstone Bank has operated under a consent order with bank regulators for nearly two years after suffering nearly three years of losses. In response, the bank has trimmed expenses, reduced its loan portfolio and offered preferred, convertible stock with a 10 percent annual, cumulative dividend.
Cornerstone has reported three consecutive quarters of profits and will report its fourth quarter results for 2011 later this month. Through the first nine months of 2011, Cornerstone profits rose 59 percent to $917,000, or 9 cents per share.
In his last earnings announcement, Cornerstone President Frank Hughes said the improved profits "place the bank in a positive position to move forward as the capital campaign progresses."
Cornerstone shares are traded on the Over-The-Counter Bulletin Board under the ticker symbol CSBQP.
Dividends on the preferred stock are payable in cash every three months if, and when, they are declared and accumulate at an annual rate of 10 percent.
"We've made this a very attractive security," Welborn said. "Our goal is to continue strengthening and improving Cornerstone, in order to provide the highest return on investment to our shareholders and the best possible products, service and value to our customers."
With $426 million in assets, Cornerstone operates five bank offices in Chattanooga and has a loan production office in Dalton, Ga.