CSNC Cardinal State Bank (MM)

DURHAM, N.C., Oct. 13 /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 third quarter of 2005 was $210,000, compared to net income of $104,000 in the third quarter of 2004. For the nine months ended September 30, 2005, net income amounted to $609,000, compared to $121,000 for the first nine months of 2004. Total assets stood at $152,080,000 at September 30, 2005, compared to $124,233,000 at September 30, 2004, an increase of $27,847,000 or 22.4%. Similar gains were experienced in deposits and loans which increased to $125,253,000 and $121,270,000, respectively, from $105,399,000 and $105,926,000. "We passed a significant milestone of $150 million in total assets during the third quarter" said John W. Mallard, Jr., President and CEO of Cardinal State Bank. "Our asset quality remains strong and profitability continues to improve." Mallard further noted: "We have recently leased additional space in our Administration/Operations location which will officially become our corporate headquarters effective January 1, 2006. We are also negotiating to purchase an additional branch location outside of Durham. We remain 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 Nine Months Ended September 30 September 30 2005 2004 2005 2004 Income Statement: Interest Income $2,279 1,538 $6,237 4,080 Interest Expense 887 477 2,273 1,391 Net Interest Income 1,392 1,061 3,964 2,689 Loan Loss Provision 60 128 171 281 Net Interest Income After Provision 1,332 933 3,793 2,408 Other Income 134 120 320 288 Other Expense 1,256 949 3,504 2,575 Income Before Taxes 210 104 609 121 Income Taxes -- -- -- -- Net Income $210 104 $609 121 Income Per Share: Basic .09 .05 .27 .07 Diluted .09 .05 .26 .07 Average Shares Outstanding (000's): Basic 2,261 2,261 2,261 1,767 Diluted 2,288 2,261 2,288 1,767 Balance Sheet Data: Total Assets $152,080 124,233 -- -- Total Deposits 125,253 105,399 -- -- Total Loans 121,270 105,926 -- -- Loan Loss Reserve 1,522 1,329 -- -- Total Shareholders' Equity 18,945 18,171 -- -- Asset Quality: Non-Performing Loans 453 5 -- -- Non-Performing Loans To Total Assets (%) .30 .00 -- -- Net Loan Charge-Offs 17 17 39 19 Net Loan Charge-Offs To Average Loans (%) .06 .07 .05 .03 Performance Ratios: Return On Average Assets (%) .56 .34 .56 .14 Return On Average Equity (%) 4.41 2.28 4.35 1.21 Net Interest Margin (%) 3.86 3.58 3.80 3.33 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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