Cardinal Reports Fourth Quarter and 2008 Annual Results.

Asset Quality Remains Strong, Loans Grow 10%

TYSONS CORNER, Va. -- Cardinal Financial Corporation (NASDAQ:CFNL) (the "Company") today reported earnings of $1.8 million and $0.3 million, or $0.07 and $0.01 per diluted share, for the three month and annual periods ended December 31, 2008, respectively. Operating earnings, a non-GAAP measure, which does not include non-recurring expenses and other charges, were $6.2 million for 2008, equivalent to $0.25 per diluted share versus $7.1 million, or $0.28 per diluted share, for 2007. The decline in operating earnings is mainly attributable to the provision for loan losses, which were $4.3 million and $1.2 million in 2008 at the bank and mortgage subsidiary, respectively, versus $2.5 million in 2007 at the bank. This release includes a table reconciling operating earnings to GAAP net income for the 2008 and 2007 periods presented.

As previously disclosed, the Company's 2008 annual results include after-tax charges of $2.9 million for a non-cash other-than-temporary impairment on Fannie Mae perpetual preferred stock, $1.8 million for a goodwill impairment related to the acquisition of its mortgage banking subsidiary, George Mason Mortgage, LLC ("GMM"), and $1.2 million for a settlement agreement between GMM and one of its major mortgage investors. These charges resulted in a decrease of $5.9 million in net income for 2008.

Selected Financial Highlights

* Loan demand continues to be solid as the portfolio grew year over year by $100 million, a 10% increase compared to a year ago. During the fourth quarter, loans increased $53 million, or 20% annualized.

* Asset quality remains stronger than the industry and peer averages. The Company had non-accrual loans equal to 0.41% of average loans receivable and net charge offs were 0.24%. For the quarter, the provision for loan losses was $2.8 million and net charge offs were $1.5 million. The Company's allowance for loan losses increased to 1.27% from 1.12% at year-end 2008 compared to 2007.

* Deposits grew $83 million, or 8% year over year. Non interest bearing deposits grew $24 million, or 19%.

* Net interest margin increased from 2.63% to 2.78% year over year.

* The Company's equity position remains very strong with all ratios exceeding the "well-capitalized" regulatory thresholds.

Highlights of Banking Operations

For the year, the bank reported operating earnings of $8.2 million, compared to $7.4 million for 2007. Net interest income increased to $40.7 million from $38.7 million in 2007. Non interest income increased to $4.8 million from $4.0 million. Offsetting these increases in income was the addition to the provision for loan losses, which grew by $1.8 million, to $4.3 million versus $2.5 million in 2007. The allowance for loan losses was $14.5 million at year end, and as a percentage of loans the allowance increased from the third to the fourth quarter from 1.22% to 1.27%. For the quarter ended December 31, 2008 compared to the same quarter last year, operating earnings from banking operations were $1.0 million versus $1.8 million. The decrease in earnings was primarily due to an increase in the provision for loan losses of $2.5 million versus $0.9 million compared to the same quarter last year.

For the three month period ended December 31, 2008, average assets of the Bank were $1.662 billion, an increase of 4% from $1.594 billion for the year ago quarter. Portfolio loans receivable grew $100 million, or 10%, to $1.139 billion at December 31, 2008, from $1.040 billion at December 31, 2007. Mortgage loans held for sale decreased to $157 million at the end of the quarter, compared to $170 million at December 31, 2007. Total deposits increased by 8% to $1.180 billion from $1.097 billion. Non interest bearing deposits increased 19%, from $124 million to $147 million.

Highlights of Mortgage Banking Operations

Operating earnings were $343 thousand in 2008 versus $1.6 million in 2007, excluding the goodwill impairment and charge related to the mortgage investor settlement agreement. Including the previously reported charges, the mortgage banking subsidiary reported a net loss of $2.7 million for the year. We continue to closely manage all aspects of this operation and remain prepared to take advantage of any changes in the local residential real estate market.

MANAGEMENT COMMENTS

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

"This past year was the most challenging economic and regulatory environment I have ever experienced in my thirty-seven years in the banking industry. Our financial results were impacted by the non-recurring expenses and other charges we had in 2008. However, Cardinal's asset quality continues to be strong in a tough economic environment.

"In December 2008, Cardinal Bank was approved to participate in the Capital Purchase Program (CPP) of the U.S. Treasury's Troubled Asset Relief Program (TARP) in the amount of $41.2 million. As we recently announced, Cardinal declined the opportunity to participate in the program. We performed careful analysis and concluded that the significant expense and changing requirements of the program were inconsistent with our long term strategic objectives, and that the participation in the CPP would not be in the best interest of Cardinal's shareholders.

"We continue to make loans in the communities we serve and fully support all efforts to stabilize the nation's economy. We believe that Cardinal is a healthy, strong and safe bank. We, the board and management, remain optimistic about the future and value 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 $1.7 billion at December 31, 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 five 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 [phone].

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