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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal; font-style: normal">UNITED
        STATES</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal; font-style: normal">SECURITIES
        AND EXCHANGE COMMISSION</FONT></P></TD>
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    <TD COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Washington, D.C. 20549</TD>
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    <TD COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">FORM 8-K</TD>
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    <TD COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">CURRENT REPORT</TD>
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    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>PURSUANT TO SECTION 13 OR 15(d) OF
    THE<BR> SECURITIES EXCHANGE ACT OF 1934</B></TD>
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    <TD COLSPAN="13" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center"><FONT STYLE="font-style: normal"><B>Date of Report (Date of earliest event reported): </B><FONT STYLE="font-weight: normal">March 28, 2012</FONT></FONT></TD></TR>
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    <TD COLSPAN="7" ROWSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 12pt; text-align: center">CORNERSTONE BANCSHARES, INC.</TD>
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    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
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    <TD COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(Exact name of registrant as specified
    in its charter)</B></TD>
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    <TD COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Tennessee</TD>
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    <TD COLSPAN="3" STYLE="border-bottom: windowtext 1pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: black">000<B>-</B></FONT><FONT STYLE="font-weight: normal; font-style: normal">30497</FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="4" STYLE="border-bottom: windowtext 1pt solid; vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">62-1175427</TD></TR>
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    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(State or other jurisdiction of incorporation)</B></TD>
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    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(Commission File Number)</B></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>&nbsp;</B></TD>
    <TD COLSPAN="4" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(IRS Employer Identification No.)</B></TD></TR>
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    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD>
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    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD>
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    <TD COLSPAN="11" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">835
    Georgia Avenue, Chattanooga, Tennessee 37402</TD>
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    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="9" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>(Address of principal executive offices)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (zip code)</B></TD>
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    <TD COLSPAN="11" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(423) 385-3000</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD></TR>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center"><FONT STYLE="font-style: normal"><B>(Registrant's telephone number, including area code)</B></FONT></TD>
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    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD></TR>
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    <TD COLSPAN="11" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-style: normal; font-weight: normal; text-align: center">Not
    Applicable</TD>
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    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-style: italic; text-align: center"><FONT STYLE="font-style: normal"><B>(Former name or former address if changed since last report)</B></FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>Item</B></TD><TD STYLE="text-align: justify"><B>1.01.&#9;Entry Into A Material Definitive Agreement.</B></TD>
</TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-weight: normal">On
March 28, 2012, Cornerstone Bancshares, Inc. (&quot;Cornerstone&quot;) and Midland Loan Services, a division of PNC Bank, N.A.,
servicer for the FDIC as receiver for Silverton Bank, N.A. (&quot;Lender&quot;), entered into a waiver agreement (&quot;Waiver&quot;)
with respect to a term loan with the Lender. Pursuant to the Waiver, the Lender will provide a waiver of covenant
compliance thresholds for 2012, conditioned upon the following: (1) Cornerstone will continue to provide covenant compliance certificates
to the Lender, (2) Cornerstone Community Bank, the wholly owned subsidiary of Cornerstone, will limit its dividend payments to
amounts necessary to service the term loan and line of credit and to pay income taxes, and (3) Cornerstone will pay a processing
fee of $25,000.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.</P>

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    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2">CORNERSTONE BANCSHARES, INC.&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">Date:</TD>
    <TD STYLE="width: 45%; padding-right: 5.4pt; padding-left: 5.4pt">March 30, 2012</TD>
    <TD STYLE="width: 3%">By:&nbsp;</TD>
    <TD STYLE="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt"><U> /s/ Nathaniel F. Hughes </U></TD>
    <TD STYLE="width: 12%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Nathaniel F. Hughes</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">President</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
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[{"type": "8-K", "sequence": "1", "filename": "v307974_8k.htm", "description": "FORM 8-K", "secsgml_size_bytes": 22052}]
{"company-data": {"conformed-name": "CORNERSTONE BANCSHARES INC", "cik": "0001038773", "assigned-sic": "6021", "irs-number": "621175427", "state-of-incorporation": "TN", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-30497", "film-number": "12727757"}, "business-address": {"street1": "4154 RINGGOLD RD", "city": "CHATTANOOGA", "state": "TN", "zip": "37412-416", "phone": "4236982454"}, "mail-address": {"street1": "4154 RINGGOLD RD", "city": "CHATTANOOGA", "state": "TN", "zip": "37412-0416"}, "former-company": {"former-conformed-name": "EAST RIDGE BANCSHARES INC", "date-changed": "19970507"}}
UNITED
        STATES
SECURITIES
        AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
    THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 28, 2012
CORNERSTONE BANCSHARES, INC.
(Exact name of registrant as specified
    in its charter)
Tennessee
000
-
30497
62-1175427
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
835
    Georgia Avenue, Chattanooga, Tennessee 37402
(Address of principal executive offices)          
    (zip code)
(423) 385-3000
(Registrant's telephone number, including area code)
Not
    Applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01.	Entry Into A Material Definitive Agreement.
On
March 28, 2012, Cornerstone Bancshares, Inc. ("Cornerstone") and Midland Loan Services, a division of PNC Bank, N.A.,
servicer for the FDIC as receiver for Silverton Bank, N.A. ("Lender"), entered into a waiver agreement ("Waiver")
with respect to a term loan with the Lender. Pursuant to the Waiver, the Lender will provide a waiver of covenant
compliance thresholds for 2012, conditioned upon the following: (1) Cornerstone will continue to provide covenant compliance certificates
to the Lender, (2) Cornerstone Community Bank, the wholly owned subsidiary of Cornerstone, will limit its dividend payments to
amounts necessary to service the term loan and line of credit and to pay income taxes, and (3) Cornerstone will pay a processing
fee of $25,000.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
CORNERSTONE BANCSHARES, INC.
Date:
March 30, 2012
By:
/s/ Nathaniel F. Hughes
Nathaniel F. Hughes
President