CSNC Cardinal State Bank (MM)

DURHAM, N.C., April 17 /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 first quarter ended March 31, 2007 totaled $309,000, compared to net income of $77,000 for the first quarter of 2006. Basic and diluted income per share was $.14 in the 2007 period, compared to $.03 in the 2006 period. Total assets as of March 31, 2007 were $192.8 million, compared to $171.6 million at March 31, 2006, an increase of $21.2 million or 12.4%. Fueling the growth in total assets was an increase of $19.4 million or 13.4% in total deposits which increased to $163.9 million at March 31, 2007 from $144.5 million at March 31, 2006. During the same period, total loans increased to $154.5 million from $149.6 million, an increase of $4.9 million or 3.3%. "We had another good quarter in asset growth and net income" said John W. Mallard, Jr., President and CEO of Cardinal State Bank. "We reviewed the methodology for our allowance for loan losses during the first quarter of 2007 and determined that we could reduce this allowance based on our solid asset quality history and the quality of our current loan portfolio. The Hillsborough community continues to respond favorably to our newest branch office. We remain excited about our future in this community. Despite continued pressure on our net interest margin, increased regulatory assessments and auditing/accounting costs, we remain optimistic about 2007 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 and one office in Hillsborough at 100 S. Churton Street. 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 Three Months Ended March 31 2007 2006 Income Statement: Interest Income $3,258 2,751 Interest Expense 1,641 1,199 Net Interest Income 1,617 1,552 Loan Loss Provision (242) 245 Net Interest Income After Provision 1,859 1,307 Other Income 125 116 Other Expense (1) 1,675 1,346 Income Before Taxes 309 77 Income Taxes -- -- Net Income $309 77 (1) Includes stock option expense $45 77 Income Per Share: Basic .14 .03 Diluted .14 .03 Average Shares Outstanding (000's): Basic 2,263 2,261 Diluted 2,263 2,261 Balance Sheet Data: Total Assets $192,832 171,645 Total Deposits 163,856 144,464 Total Loans 154,491 149,644 Loan Loss Reserve 1,698 1,927 Total Shareholders' Equity 20,651 19,228 Asset Quality: Non-Performing Assets 1,351 547 Non-Performing Assets To Total Assets (%) .70 .32 Net Loan Charge-Offs (19) 1 Net Loan Charge-Offs To Average Loans (%) (.05) -- Performance Ratios: Return On Average Assets (%) .66 .19 Return On Average Equity (%) 6.11 1.61 Net Interest Margin (%) 3.60 3.92 DATASOURCE: Cardinal State Bank CONTACT: John W. Mallard, Jr., President and Chief Executive Officer of Cardinal State Bank, +1-919-403-2833,

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