Cardinal State Bank and Yadkin Valley Bank and Trust Receive Merger Approval from State Banking Commissioner

Pending approvals from the FDIC and shareholders, the merger will take place in late 2007. 


DURHAM, N.C., Sept. 25  /PRNewswire-FirstCall/ -- Cardinal State Bank (NASDAQ:CSNC) and Yadkin Valley Bank and Trust Company (NASDAQ:YAVY) are one step closer to completing their proposed merger.  On September 19, the North Carolina Commissioner of Banks approved the application for merger submitted by the two financial institutions.  Approval for the merger is expected from the Federal Deposit Insurance Corporation later this month or in early October.

"These approvals clear the way for final preparations for our merger," said John W. Mallard, Jr., president and chief executive officer of Cardinal State Bank.  "The combined staff of the two banks is an exceptional team.  We are working together to integrate the policies and systems of both banks to provide our communities with an exceptional local community bank."

Plans call for completion of the merger in December 2007.  The timetable for the merger has been somewhat extended since the Securities and Exchange Commission elected to review the application.  While Yadkin Valley Bank and Trust Company is headquartered in Elkin, North Carolina, the Cardinal State Bank division of Yadkin Valley Bank and Trust Company will continue its operations in Durham and Hillsborough, North Carolina.

According to Mallard, "Led by local bankers and a team of committed directors, Cardinal State Bank will continue to focus on serving the needs of Durham and Orange counties.  In addition, we will reach new customers as a result of our merger."

Founded in 2001, Cardinal State Bank is headquartered in Durham, NC and as of June 30, 2007 reported total assets of $192.8 million.

http://www.cardinalstatebank.com/

Yadkin Valley Financial Corporation and Cardinal State Bank have filed a proxy statement/prospectus and other relevant documents concerning the merger with the United States Securities and Exchange Commission ("SEC") and the Federal Deposit Insurance Corporation (the "FDIC").

INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.

Investors may obtain these documents free of charge at the SEC's web site (http://www.sec.gov/). In addition, documents filed with the SEC by Yadkin Valley Financial Corporation will be available free of charge from Yadkin Valley Financial Corporation, Attention: William A. Long, Yadkin Valley Financial Corporation, 209 North Bridge Street, Elkin, North Carolina 28621-3404, (336-526-6300).  Documents filed with the FDIC by Cardinal State Bank will be available free of charge from Cardinal State Bank, Attention: 3710 University Drive, Suite 100, Durham, North Carolina 27707, (919-403-2833).

The directors, executive officers, and certain other members of management of Cardinal State Bank may be soliciting proxies in favor of the merger from Cardinal State Bank's shareholders.  For information about these directors, executive officers, and members of management, shareholders are asked to refer to the most recent proxy statements issued by Cardinal State Bank, which are filed with the FDIC and are available on the Cardinal State Bank's website Investor page (http://www.snl.com/Irweblinkx/docs.aspx?iid=4064834), and from Cardinal State Bank at the address provided in the preceding paragraph.

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). 

DATASOURCE: Cardinal State Bank



CONTACT:  John W. Mallard, Jr., President and CEO,

, or W. Harold Parker, Jr., Executive Vice

President and Chief Financial Officer, ,

both of Cardinal State Bank, [phone]



Web site: http://www.cardinalstatebank.com/ 

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