SMARTFINANCIAL INC. — Director's Dealing 2007

Mar 3, 2007

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: CORNERSTONE BANCSHARES INC (CSBQ)
CIK: 0001038773
Period of Report: 2007-03-01

Reporting Person: JONES GREGORY B (Director, Chairman of the Board & CEO)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2007-03-01	Stock Options	$15.24	A	7500	Acquired	2017-03-01	Cornerstone Bancshares, Inc. (7500)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	29400	Direct
Common Stock	65000	Indirect
Common Stock	5600	Indirect

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Stock Options	$3.75	2009-03-01	Cornerstone Bancshares, Inc. (174200)	174200	Direct
Stock Options	$3.25	2010-03-01	Cornerstone Bancshares, Inc. (156200)	156200	Direct

Footnotes

F1: On December 18, 2006 the common stock of Cornerstone Bancshares, Inc. split 2-for-1, resulting in the reporting person's ownership of 14,700 additional shares of common stock.

F2: On December 18, 2006 the common stock of Cornerstone Bancshares, Inc. split 2-for-1, resulting in the reporting person's ownership of 32,500 additional shares of common stock.

F3: On December 18, 2006 the common stock of Cornerstone Bancshares, Inc. split 2-for-1, resulting in the reporting person's ownership of 2,800 additional shares of common stock.

F4: This option was previously reported as covering 87,100 shares at an exercise price of $7.50 per share, but was adjusted to reflect the stock split that occured on December 18, 2006.

F5: The exercise date is determined by a vesting schedule: 30% the second year from grant date, 30% the third year from grant date, 40% the fourth year from grant date.

F6: This option was previously reported as covering 78,100 shares at an exercise price of $6.50 per share, but was adjusted to reflect the stock split that occured on December 18, 2006.