Cornerstone Bancshares, Inc. (Cornerstone) is a bank holding company. It has one wholly owned subsidiary Cornerstone Community Bank, a Tennessee banking corporation (the Bank). The Bank owned and operated a subsidiary, Eagle Financial, Inc. (Eagle), a finance and factoring company. On December 1, 2011, the Bank transferred the operations, assets and liabilities of Eagle into the Bank. As a result, the Bank formed Eagle Financial, a division of Cornerstone Community Bank. The principal business of the Bank consists of attracting deposits and investing those funds, together with funds generated from operations and from principal and interest payments on loans in commercial loans, commercial and residential real estate loans, consumer loans and residential and commercial construction loans. The principal sources of income for the Bank are interest and fees collected on loans, fees collected on deposit accounts and interest and dividends collected on other investments.