Cardinal Financial (CFNL) 8-K Results of Operations and Financial Condition

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE	Contact: Bernard H. Clineburg,
Tysons Corner, Virginia	Chairman & Chief Executive Officer
October 22, 2008	or
	Mark Wendel,
	EVP & Chief Financial Officer
	703-584-3400

CARDINAL REPORTS THIRD QUARTER RESULTS

Credit Quality Remains Excellent

Cardinal Financial Corporation (NASDAQ: CFNL) (the “Company”) today reported earnings of $1.4 million and $5.5 million, equivalent to $0.06 and $0.22 per diluted share, for the three and nine month periods ended September 30, 2008, respectively, excluding a onetime noncash other-than-temporary impairment charge previously reported during the current quarter of $3.9 million after tax and a goodwill impairment loss of $1.8 million after tax related to the acquisition of its mortgage banking subsidiary, George Mason Mortgage, LLC.   After the impairment losses, the Company reported GAAP net income (loss) of ($4.4) million and ($1.5) million, equivalent to ($0.18) and ($0.06) per diluted share.  This compares to net income (loss) of ($606) thousand and $3.1 million, or ($0.02) and $0.12 per diluted share, for the same periods of 2007.

Selected Financial Highlights

·Asset quality remains excellent.  The Company had no non-accrual loans for a fourth consecutive quarter and net charge-offs were 0.14% of average loans receivable at quarter end.

·The Company’s equity position remains very strong with all ratios exceeding the “well-capitalized” regulatory thresholds.

·Loan demand continues to be resilient as the portfolio grew to $1.086 billion, a 12% increase compared to a year ago.

·Net interest margin increased to 2.96% during the third quarter 2008 compared to 2.65% a year ago.

As disclosed earlier in August 2008, current quarterly and year to date results included $3.9 million in an after tax expense to record a one-time non-cash other-than-temporary impairment charge on Fannie Mae perpetual preferred stock.  Based upon Treasury regulations enacted after

quarter end, the impairment of this investment now qualifies for “ordinary” versus ‘capital” loss tax treatment, and the Company expects to receive an additional $1.1 million of tax benefits  in the fourth quarter reducing the after-tax expense to $2.8 million.  Also included in the current quarter and year to date results was an impairment loss of $1.8 million after tax related to goodwill associated with the acquisition of George Mason Mortgage, LLC. The charge was the result of the annual test for impairment of recorded goodwill for the mortgage banking subsidiary.  These non-cash charges will not adversely impact Cardinal’s daily operations, balance sheet liquidity and, most importantly, its capital remains substantially in excess of the “well capitalized” regulatory ratios.

Highlights of Banking Operations

For the quarter ended September 30, 2008, the traditional banking operations of Cardinal Bank reported operating earnings of $2.3 million, compared to $1.8 million for the same quarter of 2007.  For these comparable quarters, net interest income increased to $10.7 million, versus $10.0 million.  Non-interest income increased to $1.1 million versus $1.0 million.

For the third quarter, the provision for loan losses was $865 thousand versus $915 thousand in the third quarter of 2007.  The allowance for loan losses as a percentage of loans increased from the second to the third quarter from 1.16% to 1.22%.

For the three month period ended September 30, 2008, average assets of the Bank were $1.612 billion, a decrease of 2% from $1.650 billion at September 30, 2007. Portfolio loans receivable grew $113 million, or 12%, to $1.086 billion at September 30, 2008, from $974 million at September 30, 2007.  Mortgage loans held for sale decreased to $134 million at the end of the quarter, compared to $144 million for the same quarter a year ago.

The Company had no non-accrual loans at September 30, 2008. The allowance for loan losses was 1.22% of loans at September 30, 2008, compared to 1.12% at September 30, 2007.

Highlights of Mortgage Banking Operations

Including the goodwill impairment, George Mason Mortgage reported net income (loss) of ($2.2) million for the current quarter. Excluding the impairment, operating earnings (loss) were ($325) thousand compared to $429 thousand for the same quarter of 2007.  Year-to-date income (loss) was ($2.9) million and operating earnings were $159 thousand versus $1.5 million for the same period in 2007.  Since the beginning of the year, the Company’s mortgage operations reduced staff by 20 positions.  The Company continues to closely monitor all aspects of this subsidiary’s operations.

MANAGEMENT COMMENTS

Bernard H. Clineburg, Chairman and Chief Executive Officer of the Company, said:

“Our asset quality remains among the industry’s best with no non-accrual loans for a fourth consecutive quarter and insignificant charge offs.  Our capital ratios significantly exceed the regulatory requirements for “well capitalized” and our conservative approach to credit underwriting continues to highlight the company’s strength.

It is disappointing that our third quarter was impacted by a onetime non-cash impairment expense on the Fannie Mae perpetual preferred stock and a goodwill im pairment of our mortgage banking subsidiary.

Cardinal is a safe and sound bank firmly focused on serving the deposit and lending needs of our communities.  We, the board and management, remain committed to this goal and are optimistic about the future of the Cardinal franchise.”

CAUTION ABOUT FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements contain information related to matters such as the Company’s intent, belief or expectation with regard to such matters as financial and operational performance, credit quality and branch expansion. Such statements are necessarily based on management’s assumptions and estimates and are inherently subject to a variety of risks and uncertainties concerning the Company’s operations and business environment, which are difficult to predict and beyond the control of the Company. Such risks and uncertainties could cause actual results of the Company to differ materially from those matters expressed or implied in such forward-looking statements. For an explanation of the risks and uncertainties associated with forward-looking statements, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 and other reports filed with and furnished to the Securities and Exchange Commission.

About Cardinal Financial Corporation: Cardinal Financial Corporation, a financial holding company headquartered in Tysons Corner, Virginia with assets of $1.638 billion at September 30, 2008, serves the Washington Metropolitan region through its wholly-owned subsidiary, Cardinal Bank, with 25 conveniently located banking offices. Cardinal also operates several other subsidiaries: George Mason Mortgage, LLC, a residential mortgage lending company based in Fairfax, with six offices throughout the Washington Metropolitan region; Cardinal Trust and Investment Services, a trust division; Cardinal Wealth Services, Inc., a full-service brokerage company; and Wilson/Bennett Capital Management, Inc., an asset management company. The Company’s stock is traded on NASDAQ (CFNL). For additional information please visit our Web site at www.cardinalbank.com or call (703) 584-3400.

Cardinal Financial Corporation and Subsidiaries

Summary Statements of Condition

September 30, 2008,  December 31, 2007 and September 30, 2007

(Dollars in thousands)

	(Unaudited)						(Unaudited)			% Change
	September 30, 2008			December 31, 2007			September 30, 2007			Current Year		Year Over Year
Cash and due from banks	$	22,124		$	20,622		$	17,860		7.3	%	23.9	%
Federal funds sold	21,785			1,799			25,750			1111.0	%	-15.4	%
Investment securities available-for-sale	231,044			285,998			343,517			-19.2	%	-32.7	%
Investment securities held-to-maturity	52,229			78,948			82,740			-33.8	%	-36.9	%
Total investment securities	283,273			364,946			426,257			-22.4	%	-33.5	%
Other investments	16,822			14,188			12,674			18.6	%	32.7	%
Loans held for sale	134,553			170,487			144,448			-21.1	%	-6.9	%
Loans receivable, net of fees	1,086,531			1,039,684			973,518			4.5	%	11.6	%
Allowance for loan losses	(13,257		)	(11,641		)	(10,857		)	13.9	%	22.1	%
Loans receivable, net	1,073,274			1,028,043			962,661			4.4	%	11.5	%
Premises and equipment, net	16,995			18,463			18,892			-8.0	%	-10.0	%
Goodwill and intangibles, net	14,233			17,239			17,303			-17.4	%	-17.7	%
Bank-owned life insurance	33,056			32,316			31,931			2.3	%	3.5	%
Other assets	22,077			21,928			19,824			0.7	%	11.4	%
TOTAL ASSETS	$	1,638,192		$	1,690,031		$	1,677,600		-3.1	%	-2.3	%
Non-interest bearing deposits	$	147,499		$	123,994		$	127,119		19.0	%	16.0	%
Interest bearing deposits	938,065			972,931			1,010,751			-3.6	%	-7.2	%
Total deposits	1,085,564			1,096,925			1,137,870			-1.0	%	-4.6	%
Other borrowed funds	374,007			400,060			322,388			-6.5	%	16.0	%
Mortgage funding checks	7,293			9,403			17,776			-22.4	%	-59.0	%
Escrow liabilities	1,250			1,016			1,594			23.0	%	-21.6	%
Other liabilities	15,538			23,164			41,911			-32.9	%	-62.9	%
Shareholders’ equity	154,540			159,463			156,061			-3.1	%	-1.0	%
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	1,638,192		$	1,690,031		$	1,677,600		-3.1	%	-2.3	%

Cardinal Financial Corporation and Subsidiaries

Summary Income Statements

Three and Nine Months Ended September 30, 2008 and 2007

(Dollars in thousands, except share and per share data)

(Unaudited)

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2008			2007			% Change		2008			2007			% Change
Net interest income	$	11,280		$	10,333		9.2	%	$	32,660		$	30,401		7.4	%
Provision for loan losses	(1,645		)	(915		)	79.8	%	(2,734		)	(1,670		)	63.7	%
Net interest income after provision for loan losses	9,635			9,418			2.3	%	29,926			28,731			4.2	%
Service charges on deposit accounts	522			505			3.4	%	1,584			1,472			7.6	%
Loan service charges	365			365			0.0	%	1,029			1,187			-13.3	%
Investment fee income	893			1,101			-18.9	%	2,715			3,236			-16.1	%
Realized and unrealized gains on mortgage banking activities	1,985			2,093			-5.2	%	5,878			7,157			-17.9	%
Management fee income	204			229			-10.9	%	590			899			-34.4	%
Other non-interest income	426			450			-5.3	%	1,586			1,410			12.5	%
Total non-interest income	4,395			4,743			-7.3	%	13,382			15,361			-12.9	%
Net interest income and non-interest income	14,030			14,161			-0.9	%	43,308			44,092			-1.8	%
Salaries and benefits	5,754			5,592			2.9	%	17,250			18,237			-5.4	%
Occupancy	1,429			1,362			4.9	%	4,205			3,989			5.4	%
Depreciation	583			748			-22.1	%	1,821			2,345			-22.3	%
Data processing	402			345			16.5	%	1,257			1,044			20.4	%
Telecommunications	256			278			-7.9	%	742			856			-13.3	%
Impairment of Fannie Mae perpetual preferred stock	4,408			—			100.0	%	4,408			—			100.0	%
Impairment of goodwill	2,821			—			100.0	%	2,821			—			100.0	%
Settlement with mortgage correspondent	—			—			0.0	%	1,800			—			100.0	%
Loss related to escrow arrangement	—			3,500			-100.0	%	—			3,500			-100.0	%
Other operating expense	3,603			3,644			-1.1	%	10,414			10,169			2.4	%
Total non-interest expense	19,256			15,469			24.5	%	44,718			40,140			11.4	%
Net income (loss) before income taxes	(5,226		)	(1,308		)	299.5	%	(1,410		)	3,952			-135.7	%
Provision (benefit) for income taxes	(816		)	(702		)	16.2	%	84			851			-90.1	%
NET INCOME (LOSS)	$	(4,410	)	$	(606	)	627.7	%	$	(1,494	)	$	3,101		-148.2	%
Earnings per common share - basic	$	(0.18	)	$	(0.02	)	625.5	%	$	(0.06	)	$	0.13		-148.2	%
Earnings per common share - diluted	$	(0.18	)	$	(0.02	)	625.5	%	$	(0.06	)	$	0.12		-149.2	%
Weighted-average common shares outstanding - basic	24,327,751			24,253,187			0.3	%	24,393,167			24,424,037			-0.1	%
Weighted-average common shares outstanding - diluted	24,327,751			24,253,187			0.3	%	24,393,167			24,900,401			-2.0	%

Reconciliation of Non-GAAP measures:

GAAP net income reported above	$	(4,410	)	$	(606	)			$	(1,494	)	$	3,101
After tax impact on:
- impairment of Fannie Mae perpetual preferred stock	3,992			—					3,992			—
- impairment of goodwill	1,846			—					1,846			—
- settlement with mortgage correspondent	—			—					1,179			—
- loss related to escrow arrangement	—			2,293					—			2,293
- legal expenses related to escrow arrangement	—			229					—			229
Operating earnings, excluding nonrecurring expenses reported above:	$	1,428		$	1,916		-25.5	%	$	5,523		$	5,623	-1.8	%
GAAP earnings per share - diluted reported above	$	(0.18	)	$	(0.02	)			$	(0.06	)	$	0.12
After tax impact on:
- impairment of Fannie Mae perpetual preferred stock	0.16			—					0.16			—
- impairment of goodwill	0.08			—					0.07			—
- settlement with mortgage correspondent	—			—					0.05			—
- loss related to escrow arrangement	—			0.09					—			0.09
- legal expenses related to escrow arrangement	—			0.01					—			0.01
Operating earnings per common share - diluted (excluding nonrecurring expenses reported above)	$	0.06		$	0.08		-25.7	%	$	0.22		$	0.23	0.3	%

Cardinal Financial Corporation and Subsidiaries

Selected Financial Information

(Dollars in thousands, except per share data and ratios)

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Income Statements:
Interest income	$	21,951		$	25,545		$	67,283		$	74,538
Interest expense	10,671			15,212			34,623			44,137
Net interest income	11,280			10,333			32,660			30,401
Provision for loan losses	1,645			915			2,734			1,670
Net interest income after provision for loan losses	9,635			9,418			29,926			28,731
Non-interest income	4,395			4,743			13,382			15,361
Non-interest expense	19,256			15,469			44,718			40,140
Net income before income taxes	(5,226		)	(1,308		)	(1,410		)	3,952
Provision for income taxes	(816		)	(702		)	84			851
Net income	$	(4,410	)	$	(606	)	$	(1,494	)	$	3,101
							September 30, 2008			September 30, 2007
Balance Sheet Data:
Total assets							$	1,638,192		$	1,677,600
Loans receivable, net of fees							1,086,531			973,518
Allowance for loan losses							(13,257		)	(10,857		)
Loans held for sale							134,553			144,448
Total investment securities							283,273			426,257
Total deposits							1,085,564			1,137,870
Other borrowed funds							374,007			322,388
Total shareholders’ equity							154,540			156,061
Common shares outstanding							24,103			24,254
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2008			2007			2008			2007
Selected Average Balances:
Total assets	$	1,620,893		$	1,659,440		$	1,636,453		$	1,640,185
Loans receivable, net of fees	1,075,609			946,923			1,057,239			898,984
Allowance for loan losses	(12,763		)	(10,512		)	(12,192		)	(10,096		)
Loans held for sale	118,009			233,646			132,921			261,505
Total investment securities	313,180			379,404			325,851			355,607
Interest earning assets	1,541,592			1,575,920			1,554,172			1,557,233
Total deposits	1,083,469			1,151,490			1,107,002			1,194,068
Other borrowed funds	359,976			319,767			349,178			264,551
Total shareholders’ equity	159,971			156,967			161,567			157,370
Weighted Average:
Common shares outstanding - basic	24,328			24,253			24,393			24,424
Common shares outstanding - diluted	24,328			24,253			24,393			24,900
Per Common Share Data:
Basic net income	$	(0.18	)	$	(0.02	)	$	(0.06	)	$	0.13
Fully diluted net income	(0.18		)	(0.02		)	(0.06		)	0.12
Book value	6.41			6.43			6.41			6.43
Tangible book value (1)	5.92			5.82			5.92			5.82
Performance Ratios:
Return on average assets	-1.09		%	-0.15		%	-0.12		%	0.25		%
Return on average equity	-11.03		%	-1.54		%	-1.23		%	2.63		%
Net interest margin (2)	2.96		%	2.65		%	2.84		%	2.63		%
Efficiency ratio (3)	76.73		%	77.08		%	77.51		%	79.30		%
Non-interest income to average assets	1.08		%	1.14		%	1.09		%	1.25		%
Non-interest expense to average assets	4.75		%	3.73		%	3.64		%	3.26		%
Asset Quality Data:
Annualized net charge-offs to average loans receivable, net of fees							0.14		%	0.07		%
Nonaccrual loans to loans receivable, net of fees							0.00		%	0.01		%
Nonaccrual loans to total assets							0.00		%	0.01		%
Allowance for loan losses to loans receivable, net of fees							1.22		%	1.12		%
Allowance for loan losses to nonperforming loans							0.00		%	12624.4		%
Capital Ratios (4):
Tier 1 risk-based capital							11.93		%	12.49		%
Total risk-based capital							12.91		%	13.34		%
Leverage capital ratio							10.22		%	9.80		%

(1)	Tangible book value is calculated as total shareholders’ equity, adjusted for changes in other comprehensive income, less goodwill and other intangible assets, divided by common shares outstanding.
(2)	Net interest margin is calculated as net interest income divided by total average earning assets and reported on a tax equivalent basis at a rate of 34%.
(3)	Efficiency ratio is calculated as total non-interest expense (less nonrecurring expense) divided by the total of net interest income and non-interest income.
(4)	The capital ratios include the ordinary tax benefit attributable to the Fannie Mae perpetual preferred stock impairment the Company will record during the fourth quarter 2008.

Cardinal Financial Corporation and Subsidiaries

Average Statements of Condition and Yields on Earning Assets and Interest-Bearing Liabilities

Three and Nine Months Ended September 30, 2008 and 2007

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended										For the Nine Months Ended
	September 30, 2008					September 30, 2007					September 30, 2008					September 30, 2007
	Average Balance			Average Yield		Average Balance			Average Yield		Average Balance			Average Yield		Average Balance			Average Yield
Interest-earning assets:
Loans receivable, net of fees (1)
Commercial and industrial	$	119,891		6.15	%	$	108,266		7.88	%	$	127,572		6.35	%	$	106,764		7.67	%
Real estate - commercial	454,513			6.55	%	385,432			6.80	%	432,948			6.56	%	354,731			6.70	%
Real estate - construction	189,041			5.72	%	171,846			8.47	%	190,428			6.11	%	164,295			8.43	%
Real estate - residential	213,360			5.60	%	200,792			5.48	%	213,018			5.61	%	199,342			5.46	%
Home equity lines	96,196			4.66	%	72,365			7.25	%	90,593			4.92	%	66,832			7.35	%
Consumer	2,608			6.08	%	8,222			7.96	%	2,680			6.48	%	7,020			8.08	%
Total loans	1,075,609			6.01	%	946,923			7.00	%	1,057,239			6.12	%	898,984			6.91	%
Loans held for sale	118,009			5.79	%	233,646			7.29	%	132,921			5.81	%	261,505			7.11	%
Investment securities - trading	—			0.00	%	—			0.00	%	—			0.00	%	15			4.61	%
Investment securities - available-for-sale (1)	258,807			5.29	%	293,554			5.04	%	264,376			5.25	%	264,249			4.92	%
Investment securities - held-to-maturity	54,373			4.30	%	85,850			4.17	%	61,475			4.25	%	91,343			4.17	%
Other investments	15,726			2.91	%	10,944			6.05	%	15,138			4.82	%	9,893			5.96	%
Federal funds sold (1)	19,068			2.45	%	5,003			5.69	%	23,023			2.52	%	31,244			5.28	%
Total interest-earning assets	1,541,592			5.73	%	1,575,920			6.51	%	1,554,172			5.81	%	1,557,233			6.41	%
Non-interest earning assets:
Cash and due from banks	7,241					5,659					7,526					7,297
Premises and equipment, net	17,276					19,347					17,765					19,835
Goodwill and intangibles, net	17,060					17,341					17,140					17,403
Accrued interest and other assets	50,487					51,685					52,042					48,513
Allowance for loan losses	(12,763		)			(10,512		)			(12,192		)			(10,096		)
TOTAL ASSETS	$	1,620,893				$	1,659,440				$	1,636,453				$	1,640,185
Interest-bearing liabilities:
Interest-bearing deposits	$	946,894		3.04	%	$	1,028,312		4.39	%	$	979,057		3.34	%	$	1,070,447		4.39	%
Other borrowed funds	359,976			3.78	%	319,767			4.76	%	349,178			3.89	%	264,551			4.52	%
Total interest-bearing liabilities	1,306,870			3.24	%	1,348,079			4.48	%	1,328,235			3.48	%	1,334,998			4.42	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits	136,575					123,178					127,945					123,621
Other liabilities	17,477					31,216					18,706					24,196
Shareholders’ equity	159,971					156,967					161,567					157,370
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY	$	1,620,893				$	1,659,440				$	1,636,453				$	1,640,185
NET INTEREST MARGIN (1)				2.96	%				2.65	%				2.84	%				2.63	%

(1) The average yields for loans receivable, investment securities available-for-sale and fed funds sold (which includes investments in money market preferred stock) are reported on a fully taxable-equivalent basis at a rate of 34%.

Cardinal Financial Corporation and Subsidiaries

Segment Reporting at and for the Three and Nine Months Ended September 30, 2008 and 2007

(Dollars in thousands)

(Unaudited)

At and for the Three Months Ended September 30, 2008:

	Commercial			Mortgage			Wealth Management &					Intersegment
	Banking			Banking			Trust Services		Other			Elimination			Consolidated
Net interest income	$	10,720		$	837		$	—	$	(277	)	$	—		$	11,280
Provision for loan losses	865			780			—		—			—			1,645
Non-interest income	1,142			2,352			893		8			—			4,395
Non-interest expense	12,096			5,728			859		573			—			19,256
Provision for income taxes	605			(1,148		)	13		(286		)	—			(816		)
Net income (loss)	$	(1,704	)	$	(2,171	)	$	21	$	(556	)	$	—		$	(4,410	)
Reconciliation of Non-GAAP measures:
After tax impact on:
- Impairment of goodwill	—			1,846			—		—			—			1,846
- Impairment of Fannie Mae perpetual preferred stock	3,992			—			—		—			—			3,992
Operating earnings, excluding nonrecurring expenses reported above	$	2,288		$	(325	)	$	21	$	(556	)	$	—		$	1,428
Average Assets	$	1,612,406		$	124,567		$	3,589	$	172,889		$	(292,558	)	$	1,620,893

At and for the Three Months Ended September 30, 2007:

	Commercial		Mortgage		Wealth Management &						Intersegment
	Banking		Banking		Trust Services			Other			Elimination			Consolidated
Net interest income	$	9,969	$	767	$	—		$	(403	)	$	—		$	10,333
Provision for loan losses	915		—		—			—			—			915
Non-interest income	1,029		2,601		1,101			12			—			4,743
Non-interest expense	7,533		2,697		4,363			876			—			15,469
Provision for income taxes	715		242		(1,222		)	(437		)	—			(702		)
Net income (loss)	$	1,835	$	429	$	(2,040	)	$	(830	)	$	—		$	(606	)
Reconciliation of Non-GAAP measures:
After tax impact on:
- Loss related to escrow arrangement	—		—		2,293			—			—			2,293
- Legal expenses related to escrow arrangement	—		—		229			—			—			229
Operating earnings, excluding nonrecurring expenses reported above	$	1,835	$	429	$	482		$	(830	)	$	—		$	1,916
Average Assets	$	1,650,498	$	239,395	$	4,247		$	173,802		$	(408,502	)	$	1,659,440

At and for the Nine Months Ended September 30, 2008:

	Commercial		Mortgage			Wealth Management &					Intersegment
	Banking		Banking			Trust Services		Other			Elimination			Consolidated
Net interest income	$	31,110	$	2,470		$	—	$	(920	)	$	—		$	32,660
Provision for loan losses	1,790		944			—		—			—			2,734
Non-interest income	3,565		7,075			2,715		27			—			13,382
Non-interest expense	27,165		12,979			2,575		1,999			—			44,718
Provision for income taxes	2,528		(1,512		)	51		(983		)	—			84
Net income (loss)	$	3,192	$	(2,866	)	$	89	$	(1,909	)	$	—		$	(1,494	)
Reconciliation of Non-GAAP measures:
After tax impact on:
- Impairment of goodwill	—		1,846			—		—			—			1,846
- Impairment of Fannie Mae perpetual preferred stock	3,992		—			—		—			—			3,992
- Settlement with mortgage correspondent	—		1,179			—		—			—			1,179
Operating earnings, excluding nonrecurring expenses reported above	$	7,184	$	159		$	89	$	(1,909	)	$	—		$	5,523
Average Assets	$	1,628,002	$	138,243		$	3,647	$	176,287		$	(309,726	)	$	1,636,453

At and for the Nine Months Ended September 30, 2007:

	Commercial		Mortgage		Wealth Management &						Intersegment
	Banking		Banking		Trust Services			Other			Elimination			Consolidated
Net interest income	$	29,055	$	2,319	$	—		$	(973	)	$	—		$	30,401
Provision for loan losses	1,670		—		—			—			—			1,670
Non-interest income	3,052		9,036		3,236			37			—			15,361
Non-interest expense	22,693		9,045		6,267			2,135			—			40,140
Provision for income taxes	2,365		828		(1,283		)	(1,059		)	—			851
Net income (loss)	$	5,379	$	1,482	$	(1,748	)	$	(2,012	)	$	—		$	3,101
Reconciliation of Non-GAAP measures:
After tax impact on:
- Loss related to escrow arrangement	—		—		2,293			—			—			2,293
- Legal expenses related to escrow arrangement	—		—		229			—			—			229
Operating earnings, excluding nonrecurring expenses reported above	$	5,379	$	1,482	$	774		$	(2,012	)	$	—		$	5,623
Average Assets	$	1,628,777	$	265,305	$	4,680		$	169,925		$	(428,502	)	$	1,640,185