| x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------|

|   | For transition period from __________  to  __________ |
|--------|---------------------------------------------------------------------------|

| Tennessee                | 62-1173944                           |
|--------------------------|--------------------------------------|
| (State of Incorporation) | (I.R.S. Employer Identification No.) |

----

----

|   | Exhibit No. | Description |
|--------|-------------|-------------|

|   | 10.5 | Stipulation to the Issuance of a Consent Order dated April 2, 2010 between Cornerstone Community Bank and a representative of the Legal Division of the Federal Deposit and Insurance Corporation (FDIC-10-037b). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Consent Order dated April 2, 2010 issued by the Federal Deposit and Insurance Corporation (FDIC-10-037b). |
|--------|------|-----------------------------------------------------------------------------------------------------------|

|   | 31.1 | Certification of principal executive officer. |
|--------|------|-----------------------------------------------|

|   | 31.2 | Certification of principal financial officer. |
|--------|------|-----------------------------------------------|

|   | 32 | Section 906 certifications of chief executive officer and chief financial officer. |
|--------|----|------------------------------------------------------------------------------------|

----

|                    | CORNERSTONE BANCSHARES, INC. |                               |
|-------------------------|------------------------------|------------------------------------|
|                    |                         |                               |   |
| Date: September 9, 2011 | By:                          | /s/  Nathaniel F. Hughes |   |
|                    |                         | Nathaniel F. Hughes                |   |
|                    |                         | President                          |   |
|                    |                         | (principal executive officer)      |   |

|   | By:    | /s/  Gary W. Petty, Jr.     |   |
|--------|--------|-----------------------------------------------------------|--------|
|   |   | Gary W. Petty, Jr.                                        |   |
|   |   | Senior Vice President and Chief Financial Officer         |   |
|   |   | (principal financial officer and accounting officer)      |   |

| Signature                                                                 |   | Title                                                                                                       |
|---------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|
|                                                                      |   |                                                                                                        |
| /s/  W. Miller WelbornW. Miller Welborn     |   | Chairman of the Board of Directors                                                                          |
|                                                                      |   |                                                                                                        |
| /s/  Nathaniel F. HughesNathaniel F. Hughes                     |   | President(principal executive officer) and Director                                                         |
|                                                                      |   |                                                                                                        |
| /s/  B. Kenneth DriverB. Kenneth Driver                         |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/  Karl FillauerKarl Fillauer                                 |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/  David FussellDavid Fussell                                 |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/  Lawrence D. LevineLawrence D. Levine                       |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/   Frank S. McDonaldFrank S. McDonald                   |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/  Doyce G. PayneDoyce G. Payne                               |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/  Billy O. WigginsBilly O. Wiggins                           |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/  Marsha YessickMarsha Yessick                               |   | Director                                                                                                    |
|                                                                      |   |                                                                                                        |
| /s/  Gary W. Petty, Jr.Gary W. Petty, Jr.                       |   | Senior Vice President and Chief Financial Officer (principal financial officer and accounting officer) |

----

|   | Exhibit No. | Description |
|--------|-------------|-------------|

|   | 3.1 | Amended and Restated Charter of Cornerstone Bancshares, Inc. (1) |
|--------|-----|------------------------------------------------------------------|

|   | 3.2 | Amendment to Amended and Restated Charter of Cornerstone Bancshares, Inc. (2) |
|--------|-----|-------------------------------------------------------------------------------|

|   | 3.3 | Amended and Restated Bylaws of Cornerstone Bancshares, Inc. (3) |
|--------|-----|-----------------------------------------------------------------|

|   | 4 | The right of securities holders are defined in the Charter and Bylaws provided in exhibits 3.1, 3.2 and 3.3 respectively. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------|

|   | 10.1* | Cornerstone Bancshares, Inc. Statutory and Nonstatutory Stock Option Plan. (4) |
|--------|-------|--------------------------------------------------------------------------------|

|   | 10.2* | Cornerstone Bancshares, Inc. 2002 Long-Term Incentive Plan. (5) |
|--------|-------|-----------------------------------------------------------------|

|   | 10.3* | Cornerstone Bancshares, Inc. 2004 Non-Employee Director Plan. (6) |
|--------|-------|-------------------------------------------------------------------|

|   | 10.4* | Cornerstone Community Bank Employee Stock Ownership Plan. (7) |
|--------|-------|---------------------------------------------------------------|

|   | 10.5 | Stipulation to the Issuance of a Consent Order dated April 2, 2010 between Cornerstone Community Bank and a representative of the Legal Division of the Federal Deposit and Insurance Corporation (FDIC-10-037b). (8) |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Consent Order dated April 2, 2010 issued by the Federal Deposit and Insurance Corporation (FDIC-10-037b). (9) |
|--------|------|---------------------------------------------------------------------------------------------------------------|

|   | 14 | Code of Ethics. (10) |
|--------|----|----------------------|

|   | 21 | Subsidiaries of the registrant. |
|--------|----|---------------------------------|

|   | 31.1 | Certification of principal executive officer. |
|--------|------|-----------------------------------------------|

|   | 31.2 | Certification of principal financial officer. |
|--------|------|-----------------------------------------------|

|   | 32 | Section 906 certifications of chief executive officer and chief financial officer. |
|--------|----|------------------------------------------------------------------------------------|

|   | * | This item is a management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K pursuant to Item 15(b) of this report. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | Incorporated by reference to Exhibit 3.1 of the registrant's Form 10-Q/A filed on May 5, 2010. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (2) | Incorporated by reference to Exhibit 3 of the registrant's Form 8-K filed on June 29, 2010. |
|--------|-----|---------------------------------------------------------------------------------------------|

|   | (3) | Incorporated by reference to Exhibit 3.2 of the registrant's Form 10-KSB filed on March 24, 2004. |
|--------|-----|---------------------------------------------------------------------------------------------------|

|   | (4) | Incorporated by reference to Exhibit 10.1 of the registrant's Registration Statement on Form S-1 filed on February 4, 2000, as amended (File No. 333-96185). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Incorporated by reference to Exhibit 99.1 of the registrant's Registration Statement on Form S-8 filed March 5, 2004 (File No. 333-113314). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Incorporated by reference to Exhibit 99.3 of the registrant's Registration Statement on Form S-8 filed March 5, 2004 (File No. 333-113314). |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Incorporated by reference to Exhibit 10.1 of the registrant's Form 8-K filed on July 19, 2005. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (8) | Incorporated by reference to Exhibit 10.1 of the registrant's Form 8-K filed on April 8, 2010. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (9) | Incorporated by reference to Exhibit 10.1 of the registrant's Form 8-K filed on April 8, 2010. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (10) | Incorporated by reference to Exhibit 14 of the registrant's Form 10-KSB filed on March 24, 2004. |
|--------|------|--------------------------------------------------------------------------------------------------|