CSNC Cardinal State Bank (MM)

Cardinal State Bank Announces 2004 Financial Results DURHAM, N.C., Jan. 18 /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 fourth quarter of 2004 was $181,000, compared to a net loss of $173,000 in the fourth quarter of 2003 and net income of $104,000 in the third quarter of 2004. For the year ended December 31, 2004, net income was $302,000, compared to a net loss of $1,357,000 for the year ended December 31, 2003. Total assets stood at $135,439,000 at December 31, 2004, compared to $96,570,000 at December 31, 2003, an increase of $38,869,000 or 40.3%. Similar gains were experienced in deposits and loans which increased to $109,348,000 and $110,798,000, respectively, from $87,350,000 and $85,071,000. "We are pleased with our results for the fourth quarter and full year 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 and continued emphasis on the generation of non-interest revenue. We remain highly optimistic about 2005 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 Year Ended December 31 December 31 2004 2003 2004 2003 Income and Per Share Data: Interest Income $1,707 1,102 $5,786 3,270 Interest Expense 536 453 1,927 1,341 Net Interest Income 1,171 649 3,859 1,929 Loan Loss Provision 77 135 358 644 Net Interest Income After Provision 1,094 514 3,501 1,285 Other Income 125 60 414 253 Other Expense 1,038 747 3,613 2,895 Income Before Taxes 181 (173) 302 (1,357) Income Taxes - - - - Net Income (Loss) $181 (173) $302 (1,357) Income (Loss) Per Share: Basic $.08 (.13) $.16 (1.06) Diluted $.08 (.13) $.16 (1.06) Average Shares Outstanding (000's) 2,261 1,280 1,891 1,280 Balance Sheet Data: Total Assets $135,439 96,570 - - Total Deposits 109,348 87,350 - - Total Loans 110,798 85,071 - - Loan Loss Reserve 1,390 1,067 - - Total Shareholders' Equity 18,343 8,647 - - Asset Quality: Non-Performing Loans 102 - - - Non-Performing Loans To Total Assets (%) .08 - - - Net Loan Charge-Offs 16 - 35 13 Net Loan Charge-Offs To Average Loans (%) .06 - .04 .02 Performance Ratios: Return On Average Assets (%) .56 (.74) .26 (1.93) Return On Average Equity (%) 3.93 (7.86) 2.06 (14.70) Net Interest Margin (%) 3.75 2.91 3.45 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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