UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): September 10, 2008
CORNERSTONE BANCORP
Incorporated under the Commission File No. 333-79543 I.R.S. Employer
laws of South Carolina Identification No.
57-1077978
1670 East Main Street
Easley, South Carolina 29640
(864) 306-1444
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):
[ ] 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))
Section 8 - Other Events
Item 8.01 Other Events
Following the action taken by the United States Treasury Department and the
Federal Housing Finance Agency to place the Federal National Mortgage
Association ("FNMA") in conservatorship, Cornerstone Bancorp (the "Company")
will evaluate the FNMA preferred stock held by its wholly owned subsidiary,
Cornerstone National Bank, for impairment as of the end of the third quarter of
2008. The Bank holds 40,000 shares of FNMA Series S preferred stock with a
carrying value as of June 30, 2008, of $951,240.00. As a result of the action
taken to place FNMA in conservatorship, dividends for these securities have been
suspended and the market value of these securities has decreased substantially.
The Company will report the effects of the decrease in value in its quarterly
report for the quarter ended September 30, 2008.
Management has evaluated the capital position of the Company and the Bank, and
believes both will continue to have capital levels above the "Well Capitalized"
threshold as promulgated by federal banking regulators, after any impairment
charges.
SIGNATURE
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 BANCORP
(Registrant)
Date: September 10, 2008 By: s/J. Rodger Anthony
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J. Rodger Anthony
Chief Executive Officer