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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001144204-10-064668.txt : 20101203
<SEC-HEADER>0001144204-10-064668.hdr.sgml : 20101203
<ACCEPTANCE-DATETIME>20101203101215
ACCESSION NUMBER:		0001144204-10-064668
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20101203
DATE AS OF CHANGE:		20101203

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CORNERSTONE BANCSHARES INC
		CENTRAL INDEX KEY:			0001038773
		STANDARD INDUSTRIAL CLASSIFICATION:	NATIONAL COMMERCIAL BANKS [6021]
		IRS NUMBER:				621175427
		STATE OF INCORPORATION:			TN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-166625
		FILM NUMBER:		101230110

	BUSINESS ADDRESS:	
		STREET 1:		4154 RINGGOLD RD
		CITY:			CHATTANOOGA
		STATE:			TN
		ZIP:			37412-416
		BUSINESS PHONE:		4236982454

	MAIL ADDRESS:	
		STREET 1:		4154 RINGGOLD RD
		CITY:			CHATTANOOGA
		STATE:			TN
		ZIP:			37412-0416

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EAST RIDGE BANCSHARES INC
		DATE OF NAME CHANGE:	19970507
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>v204515_424b3.htm
<TEXT>
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    <title>Unassociated Document</title>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PROSPECTUS
SUPPLEMENT NO. 3</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated
December 3, 2010</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(to
prospectus dated June 23, 2010)</font></div>
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Pursuant to Rule 424(b)(3)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
Number 333-166625</font></div>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">_______________________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CORNERSTONE
BANCSHARES, INC.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">600,000
Shares of Series A Convertible Preferred Stock</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">________________________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
third prospectus supplement (the &#8220;Third Supplement&#8221;) is <font style="DISPLAY: inline; COLOR: #000000">supplemental to the prospectus
dated</font><font style="DISPLAY: inline; COLOR: #000000">&#160;</font>June 23,
2010 (the &#8220;Original Prospectus&#8221;) relating to the offer and sale by Cornerstone
Bancshares, Inc.&#8217;s (the &#8220;Company&#8221;) of up to 600,000 shares of Series A
Convertible Preferred Stock (&#8220;Preferred Stock&#8221;) and the <font style="DISPLAY: inline; COLOR: #000000">first supplement to the Original
Prospectus dated August 18, 2010 (the </font><font style="DISPLAY: inline; COLOR: #000000">&#8220;</font><font style="DISPLAY: inline; COLOR: #000000">First Supplement</font><font style="DISPLAY: inline; COLOR: #000000">&#8221;</font><font style="DISPLAY: inline; COLOR: #000000">) and the second supplement to the
Original Prospectus dated November 12, 2010 (the </font><font style="DISPLAY: inline; COLOR: #000000">&#8220;</font><font style="DISPLAY: inline; COLOR: #000000">Second Supplement</font><font style="DISPLAY: inline; COLOR: #000000">&#8221;</font><font style="DISPLAY: inline; COLOR: #000000">).</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
purpose of this Third Supplement is to inform you of certain developments that
have occurred since the date of the Second Supplement.&#160;&#160;This Third
Supplement should be read together with, and may not be delivered or utilized
without, the Original Prospectus, the First Supplement and the Second
Supplement.&#160;&#160;The information contained in this Third Supplement is
qualified by reference to the Original Prospectus, the First Supplement and the
Second Supplement, except to the extent that the information in this Third
Supplement updates or supersedes the information contained in the Original
Prospectus, the First Supplement or in the Second Supplement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; COLOR: #000000">Extension of
Offering</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; COLOR: #000000">We have determined to extend the
offering through June 30, 2011.&#160;&#160;The offering is being conducted on a
&#8220;best efforts&#8221; basis and we will terminate it upon the sale of
</font>600,000<font style="DISPLAY: inline; COLOR: #000000"> shares or June 30,
2011, whichever occurs first.&#160;&#160;We also reserve the right to end the
offering at any time if we determine that the total amount of subscriptions will
provide adequate capitalization for us and our bank
subsidiary.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved the securities that we are offering, or determined if
the Original Prospectus, the First Supplement, Second Supplement or this Third
Supplement is truthful or complete.&#160;&#160;Any representation to the
contrary is a criminal offense.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; COLOR: #000000">The shares of </font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">Preferred
Stock</font><font style="DISPLAY: inline; COLOR: #000000"> that we are offering
are not deposit accounts, and are not, and will not be, insured or guaranteed by
the Federal Deposit Insurance Corporation or any other federal or state
government agency.&#160;&#160;The shares of </font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">Preferred
Stock</font><font style="DISPLAY: inline; COLOR: #000000"> are subject to
investment risk, including the possible loss of principal.&#160;&#160;See
</font><font style="DISPLAY: inline; COLOR: #000000">&#8220;</font><font style="DISPLAY: inline; COLOR: #000000">Risk Factors</font><font style="DISPLAY: inline; COLOR: #000000">&#8221;</font><font style="DISPLAY: inline; COLOR: #000000"> beginning on page 10 of the Original
Prospectus for a discussion of these risks.</font></font></div>
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BANCSHARES, INC.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">835
Georgia Avenue</font></div>
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Tennessee 37402</font></div>
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385-3000</font></div>
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