CSNC Cardinal State Bank (MM)

Cardinal State Bank Announces Third Quarter Earnings DURHAM, N.C., Oct. 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 third quarter of 2004 was $104,000, compared to a net loss of $286,000 in the third quarter of 2003 and net income of $49,000 in the second quarter of 2004. For the nine months ended September 30, 2004, net income was $121,000, compared to a net loss of $1,184,000 for the first nine months of 2003. Total assets stood at $124,233,000 at September 30, 2004, compared to $86,441,000 at September 30, 2003, an increase of $37,792,000 or 43.7%. Similar gains were experienced in deposits and loans which increased to $105,399,000 and $105,926,000, respectively, from $77,445,000 and $73,967,000. "We are pleased with our results for the third quarter of 2004," said John W. Mallard, Jr., President and CEO of Cardinal State Bank. "Our profitability continued to improve due to improved interest rate spreads and margins, as well as continued emphasis on the generation of non-interest revenue. We remain highly optimistic about the balance of 2004 and beyond." Cardinal State Bank, headquartered in Durham, NC, 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 2004 2003 2004 2003 Income and Per Share Data: Interest Income $1,539 946 $4,079 2,168 Interest Expense 477 398 1,391 888 Net Interest Income 1,062 548 2,688 1,280 Loan Loss Provision 128 184 281 509 Net Interest Income After Provision 934 364 2,407 771 Other Income 120 73 289 193 Other Expense 950 723 2,575 2,148 Income Before Taxes 104 (286) 121 (1,184) Income Taxes - - - - Net Income (Loss) $104 (286) $121 (1,184) Income (Loss) Per Share: Basic $.05 (.23) $.07 (.93) Diluted $.05 (.23) $.07 (.93) Average Shares Outstanding (000's) 2,261 1,280 1,777 1,280 Balance Sheet Data: Total Assets $124,233 86,441 - - Total Deposits 105,399 77,445 - - Total Loans 105,926 73,967 - - Loan Loss Reserve 1,329 932 - - Total Shareholders' Equity 18,171 8,835 - - Asset Quality: Non-Performing Loans 166 33 - - Non-Performing Loans To Total Assets (%) .13 .04 - - Net Loan Charge-Offs 17 13 17 13 Net Loan Charge-Offs To Average Loans (%) .07 .07 .03 .04 Performance Ratios: Return On Average Assets (%) .34 (1.40) .15 (2.52) Return On Average Equity (%) 2.28 (12.59) 1.21 (16.85) Net Interest Margin (%) 3.58 2.83 3.33 2.91 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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