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 * GORDON JEROLD JAMES   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 _____ Officer (give title below) _____ Other (specify below) (Last) (First) (Middle) 383 ROUND HILL RD 3. Date of Earliest Transaction (Month/Day/Year) 12/27/2005 (Street) GREENWICH, CT 06831 4. If Amendment, Date Original Filed(Month/Day/Year) 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               2,694 (1) (2) D

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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

Director Stock Option (right to buy)

$ 17.252

12/27/2005

D

303 (3)

05/20/1998

05/20/2008

Common Stock

303

$ 19.438

0

D

Director Stock Option (right to buy)

$ 17.818

12/27/2005

D

275 (3)

05/15/2002

05/15/2012

Common Stock

275

$ 18.872

0

D

Director Stock Option (right to buy)

$ 18

12/27/2005

D

250 (3)

05/21/2003

05/21/2013

Common Stock

250

$ 18.69

0

D

Director Stock Option (right to buy)

$ 25.46

12/27/2005

D

250 (3)

05/26/2004

05/26/2014

Common Stock

250

$ 11.23

0

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
GORDON JEROLD JAMES 383 ROUND HILL RD GREENWICH, CT 06831	X

Signatures

Leigh A. Hardisty as Power of Attorney		12/29/2005
**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)	In 2005, the reporting person received 3.468 shares of common stock as a result of participation in the Cornerstone Bancorp, Inc. dividend reinvestment plan.
(2)	Approximately .497 fractional shares were converted to cash as a result of the termination of the Bancorp's plan for the reinvestment of dividends in May 2005.
(3)	In accrodance with the provisions of the Issuer's 1996 Stock Plan, in anticipation of the Issuer's merger with NewAlliance Bancshares, Inc. on January 2, 2006, the Compensation Committee of the Board of Directors of the Issuer on December 27, 2005 approved the purchase of all outstanding options by the Issuer at a price per share equal to the difference between the option exercise price and $36.69, the price of the Issuer's common stock at the close of business on December 23, 2005, the prior business day.

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