Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
FORGOTSON MERRILL J
   2. Issuer Name and Ticker or Trading Symbol
CORNERSTONE BANCORP INC [cbn] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Chairman and President
(Last)
(First)
(Middle)
7 BAYBERRY LANE		 3. Date of Earliest Transaction (Month/Day/Year)
01/05/2005
(Street)

WESTPORT, CT 06880		 4. If Amendment, Date Original Filed(Month/Day/Year)
01/07/2005		 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 01/06/2005 01/05/2005 W   3,025 (1) A $ 12.397 4,967.51 (2) I By wife
Common Stock 01/06/2005 01/05/2005 W   6,050 (1) A $ 16.012 11,017.51 (2) I By wife
Common Stock               1,251.987 (3) I By wife as custodian for child
Common Stock               60 I By child
Common Stock               7,700 D  
Common Stock               10,330.99 I By trust of which wife is trustee

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Employee stock option - right to buy $ 13.636             05/29/2001 05/29/2011 Common Stock 22,000   2,000 D  
Employee stock option - right to buy $ 14.545             01/02/2002 01/02/2012 Common Stock 2,200   24,200 D  
Employee stock option - right to buy $ 20.3             01/02/2004 01/02/2014 Common Stock 2,000   26,200 D  
Employee stock option - right to buy $ 12.397 01/06/2005 01/05/2005 W   3,025 (1)   05/21/1997 05/21/2007 Common Stock 3,025 (1) $ 12.397 3,025 I By wife
Non-employee stock option - right to buy $ 16.012 01/06/2005 01/05/2005 W   6,050 (1)   12/31/1997 12/31/2007 Common Stock 6,050 (1) $ 16.012 9,075 I By wife
Non-employee stock option - right to buy $ 12.397 01/06/2005 01/05/2005 M     3,025 (1) 05/21/1997 05/21/2007 Common Stock 3,025 $ 12.397 6,050 I By wife
Non-employee stock option - right to buy $ 16.012 01/06/2005 01/05/2005 M     6,050 (1) 12/31/1997 12/31/2007 Common Stock 6,050 $ 16.012 0 I By wife

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
FORGOTSON MERRILL J
7 BAYBERRY LANE
WESTPORT, CT 06880		   X     Chairman and President  

Signatures

 Leigh A. Hardisty as power of attorney   05/27/2005
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Contemporaneous transfer and exercise of non-qualified stock options to Janis Forgotson, wife of Merrill J. Forgotson, from the estate of her father, Norman H. Reader, who passed away 1/8/2004.
(2) The reporting person received 33.414 shares of common stock as a result of participation in the Bancorp's plan for the reinvestment of dividends.
(3) The reporting person received 21.536 shares of common stock as a result of participation in the Bancorp's plan for the reinvestment of dividends.

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