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Business Combination
 9 Months Ended
Sep. 30, 2015
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
Note 7. Business Combination
 
On June 18, 2015, the shareholders of the Company approved a merger with Cornerstone Bancshares, Inc. (Cornerstone) ticker symbol CSBQ, the one bank holding company of Cornerstone Community Bank, which became effective August 31, 2015. The Company’s shareholders received 1.05 shares of Cornerstone common stock in exchange for each share of the Company’s common stock. After the merger, shareholders of the Company owned approximately 56% of the outstanding common stock of the combined entity on a fully diluted basis, after taking into account the exchange ratio and new shares issued as part of a capital raise through a private placement.
 
While Cornerstone was the acquiring entity for legal purposes, the merger is being accounted for as a reverse merger using the acquisition method of accounting, in accordance with the provisions of FASB ASC 805-10 Business Combinations. Under this guidance, for accounting purposes, the Company is considered the acquirer in the merger, and as a result the historical financial statements of the combined entity will be the historical financial statements of the Company.
 
The merger was effected by the issuance of shares of Cornerstone stock to shareholders of the Company. The assets and liabilities of Cornerstone as of the effective date of the merger were recorded at their respective estimated fair values and combined with those of the Company. The excess of the purchase price over the net estimated fair values of the acquired assets and liabilities was allocated to identifiable intangible assets with the remaining excess allocated to goodwill.
 
In periods following the merger, the financial statements of the combined entity will include the results attributable to Cornerstone Community Bank beginning on the date the merger was completed.
 
The following table details the preliminary estimated financial impact of the merger, including the calculation of the purchase price, the allocation of the purchase price to the fair values of net assets assumed, and goodwill recognized:
 
Calculation of Purchase Price
 
 
 
 
Shares of CSBQ common stock outstanding as of August 31, 2015
 
 
6,643,341
 
Market price of CSBQ common stock on August 31, 2015
 
$
3.85
 
Estimated fair value of CSBQ common stock (in thousands)
 
 
25,577
 
Estimated fair value of CSBQ stock options (in thousands)
 
 
2,858
 
Total consideration (in thousands)
 
$
28,435
 
 
Allocation of Purchase Price (in thousands)
 
 
 
 
Total Consideration above
 
$
28,435
 
Fair value of assets acquired and liabilities assumed:
 
 
 
 
Cash and cash equivalents
 
 
33,502
 
Investment securities available for sale
 
 
74,254
 
Loans
 
 
314,827
 
Premises and equipment
 
 
9,019
 
Bank owned life insurance
 
 
1,278
 
Core deposit intangible
 
 
2,750
 
Other real estate owned
 
 
5,672
 
Prepaid and other assets
 
 
4,301
 
Deposits
 
 
(349,462)
 
Securities sold under agreements to repurchase
 
 
(17,622)
 
FHLB advances and other borrowings
 
 
(42,307)
 
 
 
 
 
 
Payables and other liabilities
 
 
(11,943)
 
Total fair value of net assets acquired
 
 
24,269
 
Goodwill
 
$
4,166
 
 
Pro forma data for the nine months ended September 30, 2015 and 2014 in the table below presents information as if the merger occurred at the beginning of each period.
 
 
 
Nine Months Ended
 
 
 
September 30,
2015
 
September 30,
2014
 
Net interest income (in thousands)
 
$
25,478
 
$
25,967
 
Net income available to common shareholders (in thousands)
 
 
750
 
 
2,962
 
Earnings per share - basic
 
 
.22
 
 
.87
 
Earnings per share - diluted
 
 
.19
 
 
.75
 
 
Supplemental pro forma earnings in the above table for the nine months ended 2015 and 2014 include $1,027 and $0 of nonrecurring costs, respectively