8-K

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)		February 13, 2008
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)			(I.R.S. Employer Identification No.)
835 Georgia Avenue, Chattanooga, Tennessee				37343
(Address of principal executive offices)				(Zip Code)
Registrant’s telephone number, including area code			(423) 385-3000
(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 (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 4.02.Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

On February 13, 2008, the Registrant issued a press release reporting a revision of unaudited earnings results for the 4^th fiscal quarter and fiscal year-ending December 31, 2007.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99.1 Press release dated February 13, 2008 reporting a revision of unaudited earnings results for the 4^th fiscal quarter and fiscal year-ending December 31, 2007.

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. (Registrant)
Date: February 13, 2007	By:	/s/ Nathaniel F. Hughes
		Nathaniel F. Hughes, President and Chief Operating Officer

EX-99.1

Exhibit 99.1

Cornerstone Bancshares, Inc. Revises 4th Quarter 2007 Financial Results on February 13, 2008

CHATTANOOGA, Tenn., Feb. 13 /PRNewswire-FirstCall/ -- Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ) today announced the following:

Cornerstone Bancshares, Inc announced that it will revise its previously stated fourth quarter earnings resulting in a 2007 year-end profit of $871 thousand, adjusted from a previous net income of $4.93 million. Earnings for the 4th quarter were reported at $1.16 million or $0.18 a share and were reduced to a loss of $2.9 million or ($0.45) per share. The reduction in earnings is a result of an apparent customer misuse of funds that Bank management detected, resulting in a $6.5 million (before tax) loan loss provision to cover the future potential charge-off. Management discovered irregularities in February 2008 after an internal compliance investigation. Since the misappropriation existed in 2007, accounting guidelines require the provision for loss be realized in the same year.

Cornerstone Bancshares, Inc. is a one-bank holding company serving the Chattanooga, Tennessee MSA with 5 branches and one loan production office in Dalton, GA and one loan production office in Knoxville, TN and $450 million in assets specializing in business financial services.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which contains a safe harbor for forward-looking statements. The Company relies on this safe harbor in making such disclosures. The statements are based on management's current beliefs and assumptions about expectations, estimates, strategies and projections. These statements are not guarantees of future performance or results and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

Media Contact: Amy Walker Cherry, VP Strategic Services

Phone: (423)421-5391 or (423) 385-3097

CORNERSTONE BANCSHARES, INC.
Selected Financial Information (Revised)
as of December 31, 2007												Page 1
(in thousands)
	Three Months								Year-to-Date
	Ending December 31					%			Ending December 31					%
EARNINGS SUMMARY	2007			2006		Change			2007			2006		Change
Interest income	$	8,877		$	7,936		12	%	$	34,784		$	29,165		19.3	%
Interest expense		4,026			2,931		37	%		14,414			10,306		39.9	%
Net interest income		4,851			5,005		-3	%		20,370			18,859		8.0	%
Provision for loan loss		7,209			49		14612	%		10,409			1,107		840.3	%
Net interest income after provision		(2,357	)		4,956		-148	%		9,961			17,752		-43.9	%
Noninterest income		461			370		25	%		1,695			1,861		-8.9	%
Noninterest expense		2,811			3,297		-15	%		10,926			10,473		4.3	%
Pretax income		(4,707	)		2,029		-332	%		730			9,140		-92.0	%
Income taxes		(1,803	)		582		-410	%		(141	)		3,328		-104.2	%
Net income	$	(2,904	)	$	1,447		-301	%	$	871		$	5,812		-85.0	%
Earnings per common share	$	(0.45	)	$	0.22		-303	%	$	0.13		$	0.90		-85.1	%
Weighted average common shares  outstanding		6,445,663			6,505,405					6,499,205			6,479,441

	Three Months							Year-to-Date
AVERAGE BALANCE	Ending December 31				%			Ending December 31				%
SHEET SUMMARY	2007		2006		Change			2007		2006		Change
Loans, net of unearned income	$	378,173	$	295,787		28	%	$	353,278	$	284,105		24.3	%
Investment securities & Other		37,779		47,095		-20	%		38,433		40,904		-6.0	%
Earning assets		415,952		342,882		21	%		391,711		325,009		20.5	%
Total assets		434,992		362,059		20	%		413,043		344,741		19.8	%
Noninterest bearing deposits		43,761		39,773		10	%		41,503		37,056		12.0	%
Interest bearing transaction deposits		94,720		96,763		-2	%		92,135		93,178		-1.1	%
Certificates of deposit		189,264		140,064		35	%		168,670		132,465		27.3	%
Total deposits		327,745		276,600		18	%		302,308		262,699		15.1	%
Other interest bearing liabilities		64,146		44,922		43	%		67,759		44,019		53.9	%
Shareholder's equity		41,259		38,131		8	%		40,737		35,728		14.0	%

		Three Months					Year-to-Date
		Ending December 31					Ending December 31
SELECTED RATIOS		2007			2006		2007		2006
Average equity to average assets		9.48	%		10.53	%	9.86	%	10.36	%
Average net loans to average total assets		86.94	%		81.70	%	85.53	%	82.41	%
Return on average assets		-2.65	%		1.59	%	0.21	%	1.69	%
Return on average total equity		-27.93	%		15.18	%	2.14	%	16.27	%
Actual Equity on December 31,	$	36,327,350		$	38,055,477
Actual # shares outstanding on December 31		6,369,718			6,503,318
Book value per common share	$	5.70		$	5.85