UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   -----------

                                   FORM 10-K/A
                                 AMENDMENT NO. 1

|X| Annual report pursuant to section 13 or 15 (d) of the Securities
    Exchange Act of 1934 For the fiscal year ended DECEMBER 31, 2009
                                                   -----------------
                                      -OR-
|_| Transition report pursuant to section 13 or 15(d) of the Securities Exchange
    Act of 1934 For the transition period from             to              .
                                               -----------    -------------

                        CORNERSTONE FINANCIAL CORPORATION
             -------------------------------------------------------
             (Exact name of registrant, as specified in its charter)

            NEW JERSEY                                     80-0282551
  ------------------------------                     ------------------------
  State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                       Identification No.)

6000 MIDLANTIC DRIVE, SUITE 120 S, NEW JERSEY                          08054
--------------------------------------------------------------------------------
(Address of principal executive offices)                             Zip Code

Registrant's telephone number, including area code: (856) 439-0300
                                                    --------------

Securities registered pursuant to Section 12(b) of the Act:

                                      NONE
                                 ---------------
                                (Title of Class)

Securities registered pursuant to Section 12(g) of the Act:

                           COMMON STOCK, NO PAR VALUE
                           --------------------------
                                (Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. YES     NO  X
                                              ---     ---

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act [ ]

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X  NO    .
                                      ---    ---
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). YES X   NO    .
                                   ---     ---
Indicate by check mark if disclosure of delinquent filers in response to Item
405 of Regulation S-K (229.405 of this chapter) is not contained herein and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K/A
or any amendment to this Form 10-K/A. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, am
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer", and "smaller
reporting company" in rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ]                       Accelerated filer [ ]

Non-accelerated filer   [ ]                       Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.) YES    NO X
                                    ---   ---

State the aggregate market value of the voting stock and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and ask price of such common
equity as of the last business day of the registrant's most recently completed
second fiscal quarter $7,096,459.


                                       1
<PAGE>


As of March 17, 2010, there were 1,809,656 outstanding shares of the
registrant's Common Stock.

This amendment is being filed to include within the Registrant's Form 10-K
certain information which was originally to be incorporated by reference from
the Registrant's definitive proxy statement. As the Registrant's definitive
proxy statement will not be filed with the Securities and Exchange Commission on
or prior to April 30, 2010, the Registrant is amending its Form 10-K to include
this information.

                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Set forth below are the names, ages, principal occupations, and business
experience, as well as their prior service on the Board, if any, for all
nominees and for those members of our Board whose terms continue beyond the 2010
Annual Meeting. Unless otherwise indicated, principal occupations shown for each
Director have extended for five or more years.


J. RICHARD CARNALL      DIRECTOR SINCE 2004      TERM EXPIRES 2010     AGE 71
--------------------------------------------------------------------------------

J. Richard Carnall, currently retired, is the former Chairman and CEO of PFPC
Worldwide, Inc., a subsidiary of PNC Bank from 1987 until 2002. From 1981 to
2002, Mr. Carnall was Executive Vice President of PNC Bank, National Association
and held directorships with various PNC Bank-related entities from 1993 to 2002.
Mr. Carnall has also served as a director of RBB Fund, Inc., a registered
investment company since 2002. As a career banker, he brings a wealth of
industry experience to his service on the Company's Board.


GAETANO P. GIORDANO     DIRECTOR SINCE 1999      TERM EXPIRES 2010     AGE 53
--------------------------------------------------------------------------------

Mr. Giordano is the President of Vincent Giordano Corporation, Philadelphia,
Pennsylvania, since 1983. Mr. Giordano also serves on the Board of Trustees of
LaSalle University, located in Philadelphia, Pennsylvania. Mr. Giordano also
serves as a director of a number of children's charitable organizations. His
diverse involvement in local community affairs brings an important and unique
outlook when considering issues affecting our marketplace, customers and
shareholders.


RONALD S. MURPHY        DIRECTOR SINCE 1999      TERM EXPIRES 2010     AGE 60
--------------------------------------------------------------------------------

Since 1978, Ronald S. Murphy has served as the President of Murphy's Markets of
South Jersey, Inc., a chain of supermarkets. Mr. Murphy's business experience
provides him with insight and understanding of many of the same issues our small
business customers, and the Company, deal with today, including financial and
strategic planning, capital allocation and management development.


SUSAN BARRETT           DIRECTOR SINCE 2010      TERM EXPIRES 2010     AGE 49
--------------------------------------------------------------------------------

Susan Barrett is a former President and partner of Dearden, Maguire, Weaver &
Barrett LLC, investment and financial advisors, retiring in 2007. Ms. Barrett
has recently re-entered the financial industry as an independent advisor and
consultant for individuals, non-profits and small banks. Ms. Barrett is also an
active member of a variety of local organizations, acting as a financial advisor
for various non-profit entities in the area, and as a member of the Board of
Trustees of LaSalle University. Ms. Barrett's extensive knowledge of financial
affairs and small bank operations provides valuable insight to the Board.


ROBERT E. GROODY        DIRECTOR SINCE 2010      TERM EXPIRES 2010     AGE 51
--------------------------------------------------------------------------------

Bob Groody has extensive experience in financial services, banking, and
residential real estate lending. Mr. Groody has more than 20 years experience in
banking, including acting as both Chief Operating Officer and Chief Financial
Officer with entities such as GMAC Bank and Cendant Mortgage Corporation,
successfully increasing lending, total assets, and


                                       2
<PAGE>


consumer deposit throughout his career. Mr. Groody is also Chairman of the Board
of the YMCA of Burlington County. Mr. Groody's experience in developing
strategic plans to increase loan production, assets and consumer deposits,
building integrated customers service mechanisms, and knowledge and ability of
the operations of banking organizations, allows him to provide valuable input to
the Board of Directors.


J. MARK BAIADA          DIRECTOR SINCE 1999      TERM EXPIRES 2011     AGE 62
--------------------------------------------------------------------------------

J. Mark Baiada is the President of Bayada Nurses, Inc., a home health care
company. Mr. Baiada also serves as the Overseer of the University of
Pennsylvania School of Nursing. Mr. Baiada's knowledge of economic conditions in
our local markets is also of great assistance to the Company.


BRUCE PAPARONE          DIRECTOR SINCE 2000      TERM EXPIRES 2011     AGE 48
--------------------------------------------------------------------------------

Bruce Paparone is the President of Paparone Corporation since 1995, a real
estate development company. Mr. Paparone has served as a trustee and director of
Kennedy Health System since 1989. Mr. Paparone's knowledge and understanding of
real estate provides valuable insight to our Board and our lending policies.


GEORGE W. MATTEO, JR.   DIRECTOR SINCE 1999      TERM EXPIRES 2012     AGE 54
--------------------------------------------------------------------------------

Mr. Matteo has served as the President and Chief Executive Officer of the Bank
since March 2006 and of the Company's since inception in 2008; Chairman of the
Board of Directors since the Bank's inception in 1999 and the Company's
inception in 2008. He has also served an equity partner in the law firm Wolf,
Block, Schorr and Solis-Cohen LLP from 2005-2006; Mr. Matteo maintained an
of-counsel relationship with Wolf Block from March 2006 through January 2007.
His business and legal experience and background give Mr. Matteo unique insight
into all of the components of the Company's business, including shareholder
relations, capital management, loss mitigation, financial and strategic
planning, regulatory relations and management planning.


ROBERT A. KENNEDY, JR.  DIRECTOR SINCE 1999      TERM EXPIRES 2012     AGE 54
--------------------------------------------------------------------------------

President of the Kennedy Companies since 1986, a wholesale distributor of
underground utility products, founded in 1973. Mr. Kennedy serves as a Trustee
of Our Lady of Lourdes Medical Center and the St. Joseph's Carpenter Society.
The Board benefits from his long term knowledge of the Company's market area and
customers.


CODE OF ETHICS. The Company has adopted a Code of Ethics for the Bank's chief
executive officer and principal financial and accounting officers. A copy of the
Code of Ethics can be found on the Company's internet website at
WWW.CORNERSTONEBANK.NET. The Company intends to disclose any amendments to its
Code of Ethics, and any waiver from a provision of the Code of Ethics granted to
the Company's principal executive officer, principal financial officer,
principal accounting officer, or persons performing similar functions, on the
Company's internet website within four business days following such amendment or
waiver. The information contained on or connected to the Company's internet
website is not incorporated by reference into this Form 10-K/A and should not be
considered part of this or any other report that the Company files with or
furnishes to the SEC.

AUDIT COMMITTEE. The Audit Committee is responsible for the selection and
recommendation of the independent accounting firm for the annual audit and to
establish, and assure the adherence to, a system of internal controls. It
reviews and accepts the reports of the Company's independent auditors and
federal examiners. In 2009, the Audit Committee consisted of Messrs. Paparone
(Chair), Carnall, Giordano, and Kennedy. In February 2010, Susan Barrett and
Robert E. Groody also became members of the audit committee. The audit committee
does not currently have any member qualifying as an "audit committee financial
expert" as that term is defined in SEC Regulation S-K Item 407(d)(5). The board
believes that all members of the audit committee are financially literate and
experienced in business matters. Like many small companies, it is not easy for
the company to attract and retain competent and diligent board members, and
competition for individuals qualifying as "audit committee financial experts" is
significant. The board believes that the current audit committee is able to
fulfill its role under SEC regulations despite not having a designated "audit
committee financial expert". The Audit Committee has adopted a written charter,
which is available at http://www.cornerstonebanknj.com.


                                       3
<PAGE>


IDENTIFICATION OF EXECUTIVE OFFICERS

The following table sets forth certain information about each executive officer
of the Company who is not also a director.


--------------------------- ---------------------------------------------------
                                                              TERM  OF OFFICE
NAME                  AGE   POSITION WITH COMPANY             EXPIRES (1)

--------------------------- ---------------------------------------------------
Keith Winchester      57    Executive Vice President and      (2)
                            Chief  Financial Officer
--------------------------- ---------------------------------------------------
Gene D'Orazio         47    Executive Vice President and      2011
                            Chief Operating Officer
--------------------------- ---------------------------------------------------

(1) Pursuant to New Jersey law, officers serve at the pleasure of the Board of
    Directors
(2) Please see Item 11 for a description of the term of Mr. Winchester's
    employment agreement.










                                       4
<PAGE>


COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten percent stockholders are required by
regulation of the Securities and Exchange Commission to furnish the Company with
copies of all Section 16(a) forms they file.

     The Company believes that all persons associated with the Company and
subject to Section 16(a) have made all required filings for the fiscal year
ended December 31, 2009.

ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth compensation paid to the CEO and the two
other most highly compensated executive officers of the Company earning in
excess of $100,000 (the "named executive officers") as of the fiscal year ended
December 31, 2009.

<TABLE>
<CAPTION>
                                                      EXECUTIVE COMPENSATION
---------------------------------------------------------------------------------------------------------------------------------
                                                                                 NON-QUALIFIED
                                                                                    DEFERRED
                                                                     OPTION       COMPENSATION        ALL OTHER
                                            SALARY       BONUS       AWARDS         EARNINGS        COMPENSATION        TOTAL
NAME AND PRINCIPAL POSITION        YEAR      ($)          ($)        ($)(1)           ($)                ($)             ($)
---------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>      <C>            <C>        <C>          <C>              <C>                <C>
George W. Matteo, Jr.              2009     311,171          - (2)   19,800         69,563 (6)       24,287 (3)(5)      424,821
Chairman of the Board,             2008     275,827     30,000 (2)        -         41,031 (6)       20,962 (3)(5)      367,820
President and CEO
---------------------------------------------------------------------------------------------------------------------------------
Gene D'Orazio                      2009     160,397                     572 (1)      9,630 (6)       11,446 (4)(5)      182,045
Executive Vice President and       2008     151,252          -          572 (1)      4,476 (6)       12,263 (4)(5)      168,563
Chief Operating Officer
---------------------------------------------------------------------------------------------------------------------------------
Keith Winchester                   2009     153,890          -          572 (1)     20,899 (6)        8,907 (4)(5)      184,268
Executive Vice President and       2008     144,785          -          572 (1)     13,538 (6)        8,400 (4)(5)      167,295
Chief Financial Officer
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Pursuant to newly effective requirements of the Securities and Exchange
     Commission, the amounts set forth represent the aggregate grant date fair
     value of the stock and option awards, computed in accordance with FASB ASC
     Topic 718, rather than the expense recognized pursuant to SFAS 123 (R). The
     value of prior year grants has been restated to conform to the newly
     required presentation
(2)  Represents a signing bonus pursuant to the terms of Mr. Matteo's employment
     agreement dated January 10, 2008.
(3)  Includes payments for an auto allowance and country club dues
(4)  Includes payments for an auto allowance
(5)  Includes the Bank's contributions under the Cornerstone Bank 401(k) Plan
(6)  Includes payments under the Cornerstone Bank Nonqualified Deferred
     Compensation Plan (Deferred Compensation Plan") adopted January 1, 2008.
     Under the Deferred Compensation Plan, the Board designates those employees
     eligible to participate and receive contributions credited to an unfounded
     Plan Deferral Account equal to a percentage of such employees base salary.

     MATTEO EMPLOYMENT AGREEMENT. On January 10, 2008, we entered into an
employment agreement with George W. Matteo, Jr., our Chairman, President and
Chief Executive Officer. Under the Agreement, Mr. Matteo receives an annual base
salary as determined from time to time by the Board, but no less than $345,000.
Mr. Matteo is eligible to participate in any bonus plan implemented by us for
executive employees, on terms no less favorable than those applicable to any
comparable executive of the Company, or in a bonus plan specific to Mr. Matteo
but which will


                                       5
<PAGE>


be at least as favorable to Mr. Matteo as any plan applicable to
any comparable executive employees. Under the Agreement, we also provide Mr.
Matteo with certain fringe benefits, which in the aggregate will be not less
favorable than those received by our comparable executive employees, include an
automobile allowance and reimbursement for membership dues and other
business-related expenses in accordance with our policy.

     The current term of the Agreement ends on March 31, 2011. The Agreement
will automatically renew for successive one (1) year terms unless (i) either we
or Mr. Matteo gives written notice of termination at least sixty (60) days prior
to the anniversary date of the then-current term, or (ii) the Agreement is
terminated earlier in accordance with the termination provisions in the
Agreement.

     We may terminate Mr. Matteo's employment "without Cause" (as such term is
defined in the Agreement) upon giving thirty (30) days prior written notice to
Mr. Matteo. Additionally, Mr. Matteo may resign for "Good Reason" (as such term
is described below and more fully defined in the Agreement) upon giving written
notice to us within forty-five (45) days after the event constituting Good
Reason), provided that we have not cured such action constituting Good Reason
within thirty (30) days after the event. For purposes of the Agreement, "Good
Reason" includes, among other things, a reduction in title, authority, status or
base salary, our failure to provide comparable benefits upon a Change in
Control, or breach by us of a material provision of the Agreement. If Mr. Matteo
resigns without Good Reason, he will be bound by a one year covenant not to
compete with us, and a one year non-solicitation covenant with regard to our
customers and employees.

     If Mr. Matteo is terminated by us without Cause or resigns for Good Reason,
he will be entitled to receive for a period of the greater of eighteen (18)
months from the date of termination of employment or the remaining term of the
Agreement, (i) the sum of (a) his base salary as of the termination of his
employment (or prior to any reduction thereof preceding termination of
employment), plus (b) a dollar amount equal to the average of the bonuses he
received for each of the three preceding calendar years, and (ii) all life,
disability and medical insurance and other normal benefits in effect during the
two preceding calendar years, or if we are unable to provide such benefits, a
dollar amount that will equal the after tax cost of obtaining such benefits.

D'ORAZIO EMPLOYMENT AGREEMENT.

     On July 16, 2009, we entered into an employment agreement with Eugene D.
D'Orazio, our Executive Vice President and Chief Operating Officer. Under the
Agreement, Mr. D'Orazio receives an annual base salary as determined from time
to time by the Board, but no less than $182,500. Mr. D'Orazio is eligible to
receive bonuses during the term of the Agreement, at the discretion of the
Board. Under the Agreement, we also provide Mr. D'Orazio with certain fringe
benefits as may be provided by the Bank to its employees from time-to-time. The
current term of the Agreement ends on February 28, 2011.

     We may terminate Mr. D'Orazio's employment "without Cause" (as such term is
defined in the Agreement) upon giving thirty (30) days prior written notice to
Mr. D'Orazio. Additionally, Mr. D'Orazio may resign for "Good Reason" (as such
term is described below and more fully defined in the Agreement) upon giving
written notice to us, provided that we have not cured such action constituting
Good Reason within thirty (30) days after the event. For purposes of the
Agreement, "Good Reason" includes, among other things, a reduction in title,
authority, status or base salary, our failure to provide comparable benefits
upon a Change in Control, or breach by us of a material provision of the
Agreement. Following termination, Mr. D'Orazio will be bound by a one year
non-solicitation covenant with regard to our customers and employees, and a
covenant not-to-compete, which will be for a period of one (1) year if
termination is following a change-in-control, or otherwise for sixty (60) days.

     If Mr. D'Orazio is terminated by us without Cause or resigns for Good
Reason, and provided that he executed a Release, as such term is defined in the
Agreement, he will be entitled to receive for the remaining term of the
Agreement, but in no event greater than twelve (12) months nor less than (3)
months, his base salary as of the termination of his employment (or prior to any
reduction thereof preceding termination of employment), and (ii) medical
insurance during the same time period, or if Company is unable to provide such
benefits, a dollar amount that will equal the after tax cost of obtaining such
benefits. In addition if a change of control occurs and a change of control
payment is provided to Mr. D'Orazio pursuant to the terms of the employment
agreement and if the Internal Revenue Service finds that such payment
constitutes an "excess parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended, the company will decrease the
minimum amount necessary to result in no portion of the payments and benefits
being non-deductible pursuant to section 280G of the Code.


                                       6
<PAGE>


WINCHESTER EMPLOYMENT AGREEMENT.

     On February 15, 1999, The Cornerstone Formation Group, LLC, the predecessor
entity to the Bank and the Company, entered into an employment agreement with
Keith Winchester to serve initially as a consultant prior to the opening of the
Bank. Since the opening of the Bank, and pursuant to the terms of the Agreement,
Mr. Winchester has served as an Executive Vice President and Chief Financial
Officer. Under the Agreement, Mr. Winchester's current annual base salary as
determined from time to time by the Board, is no less than $170,000. Mr.
Winchester is eligible to participate in a bonus plan implemented by us. Under
the Agreement, we also provide Mr. Winchester with certain fringe benefits,
including an automobile allowance. The term of the Agreement shall continue
until such time as Mr. Winchester's employment is terminated by written notice
at least 30, but no more than 60, days prior to such termination, and otherwise
in accordance with the Agreement.

     We may terminate Mr. Winchester's employment "without Cause" (as such term
is defined in the Agreement) upon giving no less than thirty (30) and no more
than sixty (60) days prior written notice to Mr. Winchester. Additionally, Mr.
Winchester may resign for "Good Reason" (as such term is described below and
more fully defined in the Agreement) upon giving written notice to us after the
event constituting Good Reason. For purposes of the Agreement, "Good Reason"
includes, among other things, a reduction in title, position, duties, or base
salary, or breach by us of a material provision of the Agreement.

     If Mr. Winchester is terminated by us without Cause or resigns for Good
Reason, or following a Change in Control, he will be entitled to receive for a
period of one year from the date of termination of employment his base salary as
of the termination of his employment (or prior to any reduction thereof
preceding termination of employment) and uninterrupted health insurance coverage
substantially comparable to that which was in effect at the time of termination.
In addition, if a termination or change of control occurs and the payment is
provided to Mr. Winchester pursuant to the terms of the employment agreement and
if the Internal Revenue Service finds that such payment constitutes an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, the company will reduce such payment to an amount one
($1) dollar less than the amount that is fully deductive by the Company.

     The following table sets forth information regarding outstanding stock
option awards for each of our Named Executive Officers as of December 31, 2009.

<TABLE>
<CAPTION>
                           ---------------------------------------------------------------------------------------------------------
                                                         OPTION AWARDS                                      STOCK AWARDS
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       MARKET
                              NUMBER OF                                                                NUMBER OF      VALUE OF
                              SECURITIES                                                               SHARES OR      SHARES OR
                              UNDERLYING      NUMBER OF SECURITIES                                     UNITS OF       UNITS OF
                             UNEXERCISED          UNDERLYING          OPTION                          STOCK THAT     STOCK THAT
                               OPTIONS        UNEXERCISED OPTIONS    EXERCISE         OPTION           HAVE NOT       HAVE NOT
                                 (#)                 (#)              PRICE         EXPIRATION          VESTED         VESTED
NAME                         EXERCISABLE         UNEXERCISABLE         ($)             DATE               (#)           ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                  <C>                <C>            <C>                 <C>           <C>
George W. Matteo, Jr.         22,575 (1)              -              $8.86 (1)       May 17, 2010           -            -
                                                   45,000            $5.00          July 16, 2019        45,000      207,000 (3)
------------------------------------------------------------------------------------------------------------------------------------
Gene D. D'Orazio                 522 (2)              -              $9.40 (2)     October 2, 2017          -            -
------------------------------------------------------------------------------------------------------------------------------------
Keith Winchester               4,369 (1)              -              $8.86 (1)      May 17, 2010            -            -
                                 564 (1)              -              $8.86 (1)      July 1, 2011            -            -
                                 522 (2)              -              $9.40 (2)     October 2, 2017          -            -
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Has been restated to reflect the 7.5% common stock dividend paid on May 15,
     2008 and the 5% common stock dividend paid on May 15, 2007.
(2)  Has been restated to reflect the 7.5% common stock dividend paid on May 15,
     2008.
(3)  Based on the last sale price of the Bank's common stock known on April 27,
     2010 ($4.60 per share price)


                                       7
<PAGE>


     The Company maintains three (3) equity compensation plans, the 2000 A Stock
Option Plan, the 2000 B Stock Option Plan, and the 2009 Cornerstone Financial
Corporation 2009 Equity Compensation Plan. Under these plans, the Company is
authorized to issue options and restricted stock to purchase up to 231,807
shares of the Company's common stock, in the aggregate. All options authorized
under the 2000 A Stock Option Plan and the 2000 B Stock Option Plan have been
granted.

DIRECTORS' COMPENSATION


DIRECTOR COMPENSATION

<TABLE>
<CAPTION>
                               FEES
                               EARNED                          NON-EQUITY       NONQUALIFIED
                               OR PAID   STOCK      OPTION     INCENTIVE PLAN   DEFERRED
                               IN CASH   AWARDS     AWARDS     COMPENSATION     COMPENSATION         ALL OTHER
NAME                           ($)(1)    ($)        ($)        ($)              EARNINGS ($)       COMPENSATION ($)  TOTAL ($)
----                           -------   ------     ------     --------------   ------------       ----------------  ---------
<S>                            <C>       <C>        <C>        <C>              <C>                                 <C>
J. Mark Baiada                       -        -          -          -              3,000                    -          3,000
J. Richard Carnall               4,400        -          -          -                  -                    -          4,400
Gaetano P. Giordano                  -        -          -          -              2,400                    -          2,400
Robert A. Kennedy, Jr.               -        -          -          -              3,000                    -          3,000
Ronald S. Murphy                     -        -          -          -              2,700                    -          2,700
Bruce Paparone                       -        -          -          -              3,300                    -          3,300
</TABLE>

     Our directors are not compensated for service on the Company's Board of
Directors. We do compensate our directors for service on the Bank's Board of
Directors. For each regular meeting attended in person, the Vice Chairman
receives $400 and each other non-management director receives $300. The per
meeting attendance fees are paid on a quarterly basis, unless the Director
elects to participate in the Directors' Fee Deferral and Death Benefit Plan
described below. We do not pay or accrue any fees to any director for attending
meetings of committees of the Board of Directors. Directors are reimbursed for
their reasonable out-of-pocket expenses incurred in connection with attendance
at meetings of the Board of Directors and committees of the Board of Directors.

     In addition, we adopted, effective January 1, 2006, a Directors' Fee
Deferral and Death Benefit Plan ("Director Plan"), which allows each
non-employee director to elect to defer receipt of payment of some or all of his
or her director fees into an unfunded Plan Deferral Account. All directors other
then Mr. Carnell elected to defer their director fees in 2009. Pursuant to the
prior election of each director participating in the Director Plan, at the end
of each calendar year each director's Plan Deferral Account balance will be
adjusted to reflect an earnings adjustment calculated as if the amount in the
Plan Deferral Account were invested in either (1) an interest bearing account
earning interest at the prime rate determined by the Board from time to time, or
(2) our common stock. Under the Director Plan, the designated beneficiary of
each non-employee director will also be entitled to a death benefit of $75,000
in the event of his or her death while still serving as a director. Payment of
this death benefit will be funded solely by one or more life insurance contracts
obtained by us on the life of each participant. Accordingly, if a life insurance
policy is not obtained then there will be no death benefit, or if a life
insurance policy is obtained in an amount less than $75,000, then the amount of
the death benefit payable shall be limited to the amount of proceeds paid under
any such life insurance policy. The death benefit under the Director Plan is not
a vested benefit and may be terminated at any time by amendment to the Director
Plan.


                                       8
<PAGE>



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS


       SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANs

     The following table sets forth summary information regarding the Company's
equity compensation plans:

<TABLE>
<CAPTION>
                                                                                                   (C)
                                                                                           NUMBER OF SECURITIES
                                             (A)                                          REMAINING AVAILABLE
                                     NUMBER OF SECURITIES               (B)               FOR FUTURE ISSUANCE
                                      TO BE ISSUED UPON          WEIGHTED-AVERAGE              UNDER EQUITY
                                         EXERCISE OF             EXERCISE PRICE OF          COMPENSATION PLANS
                                     OUTSTANDING OPTIONS,           OUTSTANDING           (EXCLUDING SECURITIES
                                     WARRANTS, AND RIGHTS        OPTIONS, WARRANTS              REFLECTED
   AS OF DECEMBER 31, 2009                   (#)                  AND RIGHTS ($)             IN COLUMN (A))
   -----------------------          -----------------------     --------------------      -----------------------
<S>                                  <C>                         <C>                      <C>
Equity compensation plans
approved by security holders               112,054                     $7.20                         111,405
(1)

Equity compensation plans
not approved by security                      -                          -                              -
holders
                                        -------------                ----------                 --------------
                          Total            112,054                     $7.20                        111,405
                                        =============                ==========                 ==============
</TABLE>

(1)  Represents shares of the Company's common stock which may be issued upon
     the exercise of options granted under the Company's 2000 Stock Option
     Plans.

SECURITY OWNERSHIP OF MANAGEMENT

     The following table sets forth information as of March 31, 2010 regarding
the number of shares of common stock beneficially owned by all Directors,
executive officers described in the compensation table, and by all Directors and
executive officers as a group. Beneficial ownership includes shares, if any,
held in the name of the spouse, minor children or other relatives of the nominee
living in such person's home, as well as shares, if any, held in the name of
another person under an arrangement whereby the Director or executive officer
can vest title in himself at once or within sixty (60) days. Beneficially owned
shares also include shares over which the named person has sole or shared voting
or investment power, shares owned by corporations controlled by the named
person, and shares owned by a partnership in which the named person is a
partner.





                                       9
<PAGE>


                                      SHARES OF COMMON          PERCENT
                                     STOCK BENEFICIALLY            OF
       NAME                                 OWNED(1)            CLASS(1)
       ----                          ------------------         --------
George W. Matteo, Jr.                     66,617 (2)               3.6%
J. Mark Baiada                           198,608 (3)(4)           10.5%
Susan Barrett                             12,287                      *
J. Richard Carnall                        45,555 (5)               2.5%
Gaetano P. Giordano                      117,902 (3)(6)            6.4%
Robert E. Groody                             125                      *
Robert A. Kennedy, Jr.                    59,675 (3)(7)            3.3%
Ronald S. Murphy                          74,994 (3)(8)            4.1%
Bruce Paparone                            72,199 (3)(9)            3.9%

EXECUTIVE OFFICERS WHO ARE NOT
DIRECTORS

Gene D'Orazio                              3,789 (10)                 *
Keith Winchester                           6,062 (11)                 *

Directors and executive
officers as a group (9 persons)          657,811 (12)(13)          32.9%

------------------------
* Less than one percent

(1)  Beneficial ownership is based on 1,809,656 shares of common stock
     outstanding as of March 31, 2010. The securities "beneficially owned" by an
     individual and the percentage of ownership are determined in accordance
     with the regulations of the Securities and Exchange Commission and,
     accordingly, may include securities owned by or for, among others, the
     spouse and/or minor children of the individual and any other relative who
     has the same home as such individual, as well as other securities as to
     which the individual has or shares voting or investment power. A person is
     also deemed to beneficially own shares of common stock which such person
     does not own but has the right to acquire presently or within 60 days.
(2)  Includes 22,575 shares issuable upon exercise of options
(3)  Includes 4,346 shares issuable upon exercise of options
(4)  Includes 71,429 shares issuable upon exercise of warrants
(5)  Includes 10,700 shares issuable upon exercise of warrants
(6)  Includes 14,285 shares issuable upon exercise of warrants
(7)  Includes 14,000 shares issuable upon exercise of warrants
(8)  Includes 14,275 shares issuable upon exercise of warrants
(9)  Includes 14,200 shares issuable upon exercise of warrants
(10) Includes 522 shares issuable upon exercise of options
(11) Includes 5,455 shares issuable upon exercise of options
(12) Consists of 49,760 shares issuable upon exercise of options
(13) Consists of 138,889 shares issuable upon exercise of warrants

     There are no shareholders other than those set forth above who beneficially
own 5% or more of the common stock of the Company.


POTENTIAL PAYMENTS UPON CHANGE-IN-CONTROL

     If Mr. Matteo is terminated without Cause after a "Change in Control" or
resigns with Good Reason after a Change in Control, Mr. Matteo will be entitled
to receive for a period of two years from the date of termination of employment,
(i) the sum of (a) the highest base salary received by Mr. Matteo as of either
the date of termination of his employment (or prior to any reduction thereof
resulting in Good Reason for resignation) or any of the three immediately
preceding calendar years, plus (b) a dollar amount equal to the highest bonus he
received in any of the three preceding calendar years, and (ii) all life,
disability and medical insurance and other normal benefits in effect during the
two preceding calendar years, or if we are unable to provide such benefits, a
dollar amount that will equal the after tax cost of obtaining such benefits. In
addition if a change of control occurs and a change of control payment is


                                       10
<PAGE>


provided to Mr. Matteo pursuant to the terms of the employment agreement and if
the Internal Revenue Service finds that such payment constitutes an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, the company will increase such change of control
payment to place Mr. Matteo in his original after tax position.

     Should a "Change in Control" (as defined in the Agreement) occur prior to
the time when all of Mr. Matteo's non-qualified stock options have vested, such
unvested options shall immediately vest upon such Change in Control.

     If Mr. Winchester is terminated by us without Cause or resigns for Good
Reason, or following a Change in Control, he will be entitled to receive for a
period of one year from the date of termination of employment his base salary as
of the termination of his employment (or prior to any reduction thereof
preceding termination of employment) and uninterrupted health insurance coverage
substantially comparable to that which was in effect at the time of termination.
In addition, if a termination or change of control occurs and the payment is
provided to Mr. Winchester pursuant to the terms of the employment agreement and
if the Internal Revenue Service finds that such payment constitutes an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, the company will reduce such payment to an amount one
($1) dollar less than the amount that is fully deductive by the Company. Should
a termination without cause, resignation for good cause , or following a change
in control (as defined in the Agreement) occur prior to the time when all of Mr.
Winchester stock options have vested, such unvested options shall immediately
vest.

     If Mr. D'Orazio is terminated without Cause after a "Change in Control" or
resigns with Good Reason after a Change in Control, Mr. D'Orazio will be
entitled to receive for a period of eighteen (18) months from the date of
termination of employment, Mr. D'Orazio base salary as of either the date of
termination of his employment (or prior to any reduction thereof resulting in
Good Reason for resignation and (ii) all medical insurance benefits in effect
during at the time of termination, or if we are unable to provide such benefits,
a dollar amount that will equal the after tax cost of obtaining such benefits.








                                       11
<PAGE>


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS


RELATED PARTY TRANSACTIONS

     We expect to engage in banking transactions in the ordinary course of
business with our shareholders, Directors and employees and their affiliates,
including members of their families or corporations, partnerships or other
organizations in which such shareholders, Directors and employees have a
controlling interest, on substantially the same terms, including interest rates
and collateral on loans, as those prevailing at the same time for comparable
transactions with others.

DIRECTOR INDEPENDENCE

     Each member of the Board of Directors is "independent" under the Nasdaq
listing standards, except for George W. Matteo, Jr., who in addition to being a
member of the Board, is an executive officer of the Company.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The Company's independent auditors for the fiscal year ended December 31,
2009 were KPMG. KPMG has advised the Company that one or more of its
representatives will be present at the Annual Meeting to make a statement if
they so desire and to respond to appropriate questions.

PRINCIPAL ACCOUNTING FIRM FEES

     Aggregate fees billed to the company for the fiscal years ended December
31, 2009 and 2008 by the Company's principal accounting firm are shown in the
following table.


                                              FISCAL YEAR ENDED DECEMBER 31
                                            ---------------------------------
                                                 2009                  2008
                                            ------------           ----------
Audit Fees                                  $    117,667           $   92,663
Audit-Related Fees                          $                      $
                                            ------------           ----------
Tax Fees                                          20,980               18,236
                                            ------------           ----------

Total Audit and Audit-Related Fees          $    138,647           $  110,899
All Other Fees                              $        -             $      -
                                            ------------           ----------

Total Fees                                  $    138,647           $  110,899
                                            ============           ==========


ITEM 15. EXHIBITS

(b)    EXHIBITS. The following exhibits are included in this Report or
       incorporated herein by reference:

3.(i)  Certificate of Incorporation (1)

3.(ii) By-laws (1)

10.(a) Employment Agreement with Keith Winchester dated February 15, 1999 (1)

10.(b) The Bank's Stock Option Plan dated May 8, 2000 (1)

10.(c) Director Fee Deferral and Death Benefit Plan dated December 30, 2005, as
       amended by Amendment No. 1 to the Director Fee Deferral and Death Benefit
       Plan dated June 20, 2007 (1)

10.(d) Employment Agreement with George W. Matteo, Jr. dated January 10, 2008
       (1)


                                       12
<PAGE>


10.(e) Amended and Restated Non-Qualified Deferred Compensation Plan dated
       September 9, 2008 (1)

10.(f) Loan Agreement with Atlantic Central Bankers Bank ("ACBB") dated February
       17, 2009 (2)

10.(g) Line of Credit Note with ACBB dated February 17, 2009 (2)

10.(h) Stock Pledge Agreement with ACBB dated February 17, 2009 (2)

10.(i) Amendment to the Employment Agreement by and between the Bank and
       Eugene D. D'Orazio dated February 19, 2010(3).

21     Subsidiaries of the Registrant (4)

31.1   CEO Certification required under section 302 of Sarbanes - Oxley Act of
       2002

31.2   CFO Certification required under section 302 of Sarbanes - Oxley Act of
       2002

32.1   CEO Certification required under section 906 of Sarbanes - Oxley Act of
       2002 (4)

32.2   CFO Certification required under section 906 of Sarbanes - Oxley Act of
       2002 (4)

       (1) Incorporated by reference to the Company's Current Report on Form 8-K
           filed with the SEC on February 2, 2009.

       (2) Incorporated by reference to the Company's Current Report on Form 8-K
           filed with the SEC on February 2, 2009.

       (3) Incorporated by reference to the Company's Current Report on Form 8-K
           filed with the SEC on February 22, 2010.

       (4) Incorporated by reference to the Company's Annual Report on Form 10-K
           filed with the SEC on March 30, 2010


                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                        CORNERSTONE FINANCIAL CORPORATION

April 27, 2010                          By: /S/ GEORGE W. MATTEO, JR.
                                           ----------------------------------
                                           George W. Matteo, Jr.
                                           Chairman of the Board
                                           President and Chief Executive Officer






                                       13