CSNC Cardinal State Bank (MM)

Cardinal State Bank Announces Second Quarter 2005 Financial Results DURHAM, N.C., July 14 /PRNewswire-FirstCall/ -- Cardinal State Bank (NASDAQ:CSNC), a North Carolina state chartered bank headquartered in Durham, North Carolina, announced today that its net income for the second quarter of 2005 was $193,000, compared to net income of $49,000 in the second quarter of 2004. For the six months ended June 30, 2005, net income amounted to $399,000, compared to $17,000 for the first six months of 2004. Total assets stood at $144,779,000 at June 30, 2005, compared to $119,021,000 at June 30, 2004, an increase of $25,758,000 or 21.6%. Similar gains were experienced in deposits and loans which increased to $118,262,000 and $118,817,000, respectively, from $100,357,000 and $97,078,000. "We have continued our momentum from 2004 through the first half of 2005" said John W. Mallard, Jr., President and CEO of Cardinal State Bank. "Our balance sheet has grown further, our asset quality remains strong and profitability continues to improve. We have some exciting plans underway that we will share with you in succeeding quarters. We are highly optimistic about the remainder of 2005 and beyond." Cardinal State Bank is a full-service community bank. Founded in 2001, the Bank has three offices in Durham: Homestead Market, Independence Park and Westgate Drive. This news release may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of Cardinal State Bank's goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words "may", "could", "should", "would", "believe", "anticipate", "estimate", "expect", "intend", "plan", "projects", "outlook" or similar expressions. These statements are based upon the current beliefs and expectations of Cardinal State Bank's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond Cardinal State Bank's control). CARDINAL STATE BANK ($000's Except Per Share Data) As of or For The As of or For The Three Months Ended Six Months Ended June 30 June 30 2005 2004 2005 2004 Income Statement: Interest Income $2,069 1,321 $3,958 2,542 Interest Expense 738 456 1,386 914 Net Interest Income 1,331 865 2,572 1,628 Loan Loss Provision 63 76 112 153 Net Interest Income After Provision 1,268 789 2,460 1,475 Other Income 86 91 186 168 Other Expense 1,161 831 2,247 1,626 Income Before Taxes 193 49 399 17 Income Taxes -- -- -- -- Net Income $193 49 $399 17 Income Per Share: Basic .09 .03 .18 .01 Diluted .08 .03 .17 .01 Average Shares Outstanding (000's): Basic 2,261 1,754 2,261 1,517 Diluted 2,285 1,754 2,287 1,517 Balance Sheet Data: Total Assets $144,779 119,021 -- -- Total Deposits 118,262 100,357 -- -- Total Loans 118,817 97,078 -- -- Loan Loss Reserve 1,480 1,218 -- -- Total Shareholders' Equity 18,735 18,078 -- -- Asset Quality: Non-Performing Loans 116 18 -- -- Non-Performing Loans To Total Assets (%) .08 .02 -- -- Net Loan Charge-Offs 14 2 22 2 Net Loan Charge-Offs To Average Loans (%) .05 .01 .04 .00 Performance Ratios: Return On Average Assets (%) .54 .18 .57 .03 Return On Average Equity (%) 4.14 1.49 4.32 .31 Net Interest Margin (%) 3.83 3.23 3.77 3.19 DATASOURCE: Cardinal State Bank CONTACT: John W. Mallard, Jr., President and Chief Executive Officer of Cardinal State Bank, +1-919-403-2833, or

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