SMARTFINANCIAL INC. — Director's Dealing 2007

Mar 2, 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: McDonald Frank S (Director)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2007-03-01	Stock Options	$15.24	A	1000	Acquired	2017-03-01	Cornerstone Bancshares, Inc. (1000)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	8000	Direct

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Stock Options	$13.25	2016-03-01	Cornerstone Bancshares, Inc. (4000)	4000	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 4,000 additonal shares of common stock.

F2: This option was previously reported as covering 2,000 shares at an exercise price of $26.50 per share, but was adjusted to reflect the stock split that occured on December 18, 2006.

F3: The exercise date is determined by a vesting schedule: 50% the first year from the anniversary of grant date, 50% the second date of the anniversary of grant date.