Cardinal Financial Corp – ‘424B1’ on 7/20/98

As of:  Monday, 7/20/98   ·   Accession #:  1002105-98-98   ·   File #:  333-52279

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Prospectus   —   Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Cardinal Financial Corporation Prospectus             57    284K 

Document Table of Contents

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THE RULE  424(b)(1)  PROSPECTUS  CONTAINED  IN THIS EDGAR  FILING  REFLECTS  THE
PROSPECTUS THAT IS BEING DELIVERED TO INVESTORS.  THE PAGINATION IN THIS FILING,
HOWEVER,  DIFFERS  SLIGHTLY FROM THE PAGINATION IN THE DELIVERED  VERSION OF THE
PROSPECTUS.                                                                     

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2,600,000 Shares

[CARDINAL FINANCIAL CORPORATION LOGO APPEARS HERE]

Common Stock

         All of the  shares  of common  stock,  $1.00  par  value  (the  "Common
Stock"),  offered hereby are being sold by Cardinal  Financial  Corporation (the
"Company").  Prior to this  Offering,  there has been no public  market  for the
Common  Stock.  The Common  Stock has been  approved  for  listing on The Nasdaq
SmallCap Market under the symbol "CFNL."                                        

         See "Underwriting" for the factors considered in determining the public
offering price.                                                                 

         See "RISK  FACTORS"  beginning  on page 6 for a  discussion  of certain
factors that should be considered by prospective  purchasers of the Common Stock
offered hereby.                                                                 

THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE BANK
INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
 AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION      
TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                                        [Enlarge/Download Table]

==================================================================================================================
                                                                     Underwriting             Proceeds to the     
                                         Price to Public             Discount (1)               Company (2)       
------------------------------------------------------------------------------------------------------------------
                                                                                                                  
Per Share...........................        $10.00                      $0.70                     $9.30           
------------------------------------------------------------------------------------------------------------------
Total (3)...........................     $26,000,000                 $1,820,000                $24,180,000        
==================================================================================================================

(1)  The Company has agreed to indemnify the Underwriters  against certain civil
     liabilities,  including  liabilities  under the  Securities Act of 1933, as
amended. See "Underwriting."                                          

(2)  Before deducting expenses payable by the Company estimated at $180,000.    

(3)  The Company has granted the  Underwriters a 30-day option to purchase up to
     390,000  additional  shares of Common Stock at the Price to Public less the
     Underwriting  Discount  solely to cover  over-allotments,  if any.  If such
     option is exercised in full, the total Price to Public,  total Underwriting
     Discount, and total Proceeds to the Company will be $29,900,000, $2,093,000
and $27,807,000, respectively. See "Underwriting."                    

         The  shares  of  Common   Stock  are  being   offered  by  the  several
Underwriters  named herein,  subject to prior sale, when, as and if delivered to
and accepted by them and subject to certain conditions. The Underwriters reserve
the  right to  reject  orders in whole or in part and to  withdraw,  cancel,  or
modify the offer without notice. It is expected that certificates for the shares
will be available  for delivery  against  payment  therefor on or about July 22,
1998, at the offices of Scott & Stringfellow, Inc., Richmond, Virginia.         

Scott & Stringfellow, Inc.                                                      
       Interstate/Johnson Lane
       Corporation
                                                             Ferris, Baker Watts
                                                              Incorporated

The date of this Prospectus is July 17, 1998

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  [GRAPHIC OMITTED (MAP OF NORTHERN VIRGINIA)]

         IN CONNECTION  WITH THE OFFERING,  THE  UNDERWRITERS  MAY OVER-ALLOT OR
EFFECT  TRANSACTIONS  WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK AT A LEVEL ABOVE THAT WHICH MIGHT  OTHERWISE  PREVAIL IN THE OPEN  MARKET.
SUCH  TRANSACTIONS  MAY BE EFFECTED ON THE NASDAQ  SMALLCAP MARKET OR OTHERWISE.
SUCH  STABILIZING,   IF  COMMENCED,   MAY  BE  DISCONTINUED  AT  ANY  TIME.  SEE
"UNDERWRITING."                                                                 

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PROSPECTUS SUMMARY

         The following summary is qualified in its entirety by the more detailed
information  and the  Company's  consolidated  financial  statements  and  notes
thereto  appearing  elsewhere in this Prospectus.  Unless the context  indicates
otherwise,  the  information  in this  Prospectus  assumes  no  exercise  of the
Underwriters'  over-allotment  option.  Prospective  investors  should  consider
carefully the information set forth under the heading "Risk Factors."           

         This  Prospectus  contains  forward-looking   statements  that  discuss
certain risks and  uncertainties  and other factors that may cause the Company's
actual  results  to  differ   materially  from  the  results  discussed  in  the
forward-looking statements.  Factors that might cause such a difference include,
but are not  limited  to,  those  factors  set  forth  under the  heading  "Risk
Factors."                                                                       

 The Company

         Cardinal Financial  Corporation is a bank holding company headquartered
in Fairfax,  Virginia which currently  operates  Cardinal Bank, N.A.  ("Cardinal
Bank") in  Fairfax,  Virginia  and  intends  to  organize  and  establish  three
community banks in the Manassas/Prince William County, Reston/Loudoun County and
Alexandria/Arlington County markets in northern Virginia (the "Additional Banks"
and with Cardinal Bank, collectively, the "Banks").  Collectively, these markets
are among the most affluent and fastest growing areas in Virginia.              

         The Company intends to pursue a community  banking strategy by offering
a broad range of banking  products to  individuals,  professionals  and small to
medium-sized  businesses,  with an  emphasis on  personalized  service and local
decision-making  authority.  Management's expansion strategy includes attracting
experienced  local management  teams who will have  significant  decision-making
authority  at the local bank  level and local  independent  boards of  directors
consisting  of  individuals  with strong  community  affiliations  and extensive
business  backgrounds  and  business  development  potential  in the  identified
markets. Each management team will operate in a manner that provides responsive,
personalized  services.  The Company will provide credit policies and procedures
as well as centralized back office functions to provide corporate, technological
and marketing support to the Banks.                                             

         The  Company  was  formed in late  1997,  principally  in  response  to
perceived  opportunities  resulting from the takeovers of several Virginia-based
banks by regional bank holding companies.  Since January 1, 1997, four community
banks headquartered in northern Virginia have been acquired, and the acquisition
of a fifth community bank is pending. Collectively,  these banks had deposits of
approximately  $1.0 billion.  Moreover,  in 1997 three statewide banks,  Central
Fidelity  National Bank,  Signet Bank,  N.A. and Jefferson  National Bank,  with
substantial  northern  Virginia  operations were acquired by large  out-of-state
bank holding  companies.  At June 30, 1997, those three acquired statewide banks
had  deposits  in the  Company's  targeted  market area of  approximately  $1.75
billion.                                                                        

         In the  Company's  market  area,  the  bank  consolidations  have  been
accompanied  by the  dissolution  of local boards of directors and relocation or
termination  of  management  and  customer  service  professionals.  The Company
believes  that local  banking  industry  consolidation  has  disrupted  customer
relationships as the larger regional financial  institutions  increasingly focus
on larger corporate customers,  standardized loan and deposit products and other
services.  Generally,  these  products  and  services  are offered  through less
personalized  delivery  systems,  which has created the demand for high quality,
personalized services to small and medium-sized businesses and professionals. In
addition, consolidation in the local market has created opportunities to attract
experienced bankers from banks that have been acquired. Furthermore, uncertainty
over possible future  acquisitions  has enabled the                             

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Company to attract officers from banks that have not been acquired.  As a result
of these  factors,  management  believes the Company has a rare  opportunity  to
attract its targeted  banking  customers and  experienced  management  personnel
within the Company's identified markets.                                        

         The Company's  business strategy is to successfully  penetrate selected
northern  Virginia  markets by  operating  a  locally-oriented  organization  of
independently managed community banks,  combined with technological,  marketing,
financial  and  managerial  support  at the  holding  company  level.  The major
elements of this strategy include:                                              

         Expand the Company's  market share in the central Fairfax County market
through Cardinal Bank;                                        

         Establish loan  production  offices in the Company's  three  additional
         identified markets in anticipation of future openings of the Additional
Banks;                                                        

         Target small and medium-sized  business  customers,  professionals  and
         individuals   that   demand  the   attention   and   service   which  a
community-oriented bank is well suited to provide;            

         Deliver a broad array of modern  banking  products and  services  using
         up-to-date technology and a decentralized operating strategy with local
decision-making; and                                          

         Maintain   centralized   support   functions,   including  back  office
         operations,  credit  policies  and  procedures,   investment  portfolio
         management,   administration,  and  human  resources  and  training  to
         maximize  operating  efficiencies  and  facilitate   responsiveness  to
         customers.  Each of the Additional Banks will operate with a uniformity
         of service and products  that will be  associated  with the  "Cardinal"
name.                                                         

         The Company's Board of Directors  consists of 11 individuals,  seven of
whom formerly were founding directors of First Patriot  Bankshares  Corporation,
the  holding  company  for  Patriot  National  Bank,  headquartered  in  Reston,
Virginia.  First  Patriot was  organized  in 1990 and in 1997 was acquired by an
out-of-state  bank holding company.  John H. Rust, Jr., the Company's  Chairman,
served as Chairman of First  Patriot.  Until he joined the Company in late 1997,
L. Burwell Gunn,  Jr., the  Company's  President  and Chief  Executive  Officer,
served as Executive Vice President and Commercial  Division head for the Greater
Washington  Region for  Crestar  Bank.  The last 13 years of Mr.  Gunn's 25 year
career with Crestar all involved service in the northern  Virginia area. Each of
the  Company's  five other  executive  officers  has 14 or more years of banking
experience in northern Virginia.  The Company's directors and executive officers
have made a significant  investment in the Company. This financial commitment by
management,  coupled with the  Company's  strategy,  is intended to result in an
organization that is focused on creating shareholder value. See "Management."   

         The Company  raised  $10.57  million from the sale of Common Stock in a
private placement. Proceeds of such private placement have been used in part for
organizational and pre-opening expenses, and proceeds totaling $8.0 million were
used to  capitalize  Cardinal  Bank,  which opened on June 8, 1998.  The Company
intends to use the proceeds of this Offering to open three additional  community
banks.  Each of the Additional Banks will operate under the "Cardinal" name with
appropriate  modifiers to denote its distinct market area. The first  Additional
Bank is  expected to be in the City of Manassas  (the  "Manassas/Prince  William
Bank") and will serve Manassas and Prince William County.  The other  Additional
Banks will be in western  Fairfax County (the  "Reston/Loudoun  Bank"),  serving
western Fairfax County and Loudoun County,  and in either the City of Alexandria
or Arlington County (the  "Alexandria/Arlington  Bank"),  serving the Alexandria
and Arlington communities.  The Company intends that the Manassas/Prince William
Bank will open in the first quarter of 1999. Either the  Reston/Loudoun  Bank or
the Alexandria/Arlington  Bank is expected to open in the third quarter of 1999,
and the other  will open in the first  quarter  of 2000.  The order in which the
Additional Banks                                                                

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open, and their  respective  opening  dates,  will be influenced by a variety of
factors,  including the availability of suitable sites and the receipt of proper
regulatory approvals.                                                           

         Prior  to  opening  the  Additional   Banks,  the  Company  intends  to
establish,  through its Cardinal Bank  subsidiary,  loan  production  offices in
Manassas, Alexandria and the Reston area of Fairfax County to establish customer
relationships,  brand  awareness  and a  pipeline  of loan  business.  The  loan
production  offices are expected to be staffed by personnel who will  ultimately
be employed by the respective Additional Banks when they open for business.     

         The Company  believes  that each Bank's  ability to compete  with other
financial  institutions  in its  respective  market area will be enhanced by its
posture  as a locally  managed  bank with a broad base of local  ownership.  The
proposed  directors of each of the Additional Banks, most of whom reside or work
in the  market  area  in  which  their  respective  Banks  will  operate,  own a
significant  amount of Common  Stock.  In addition,  the Company  anticipates  a
significant  percentage  of the shares of Common Stock sold in the Offering will
be sold to  individuals  residing  in the  areas  served  or to be served by the
Banks. The Company believes that local ownership of the Common Stock is a highly
effective means of attracting customers and fostering loyalty to the Banks.     

         The address of the Company's  principal  executive offices is 10641 Lee
Highway,  Fairfax,  Virginia 22030,  and the Company's  telephone number at such
address is (703) 934-9200.                                                      

                                                        [Enlarge/Download Table]


                                  The Offering                                                                       
                                                                                                                     
Common Stock offered...................................... 2,600,000 shares (1)                                      
Common Stock outstanding prior to the Offering............ 1,409,509 shares                                          
Common Stock to be outstanding after the Offering......... 4,009,509 shares (1)                                      
Use of Proceeds........................................... To  capitalize  and fund  certain  costs  incurred  in the
                                                           organization  of  the  Additional  Banks,  and  for  other
                                                           general corporate purposes.  See "Use of Proceeds."       
Nasdaq SmallCap Market symbol............................. "CFNL"                                                    

___________________                                                             

(1)  Excludes  up to  390,000  shares of Common  Stock  which may be sold by the
     Company  upon  exercise  of  the  over-allotment   option  granted  to  the
Underwriters. See "Underwriting."                                     

Risk Factors

         An investment in the  securities  offered hereby  involves  substantial
risks  including,  among  others,  the  risks  associated  with  the lack of any
operating history of each Bank. See "Risk Factors."                             

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SUMMARY FINANCIAL DATA

         The following  summary  financial data for the three months ended March
31,  1998 are  derived  from the  financial  statements  and  other  data of the
Company.  The  financial  statements  were  audited by KPMG Peat  Marwick,  LLP,
independent  auditors.  The summary financial data should be read in conjunction
with the financial statements of the Company,  including the accompanying notes,
included elsewhere herein.                                                      

                                                            March 31, 1998
                                                             -----------------

Balance Sheet Data:                                                             
Cash and cash equivalents..............................           $9,676,049    
Other assets...........................................              485,272    
                                                             -----------
Total assets...........................................           10,161,321    
Total liabilities......................................               36,458    
                                                             -----------
Shareholders' equity...................................          $10,124,863    
                                                             ===========

Income Statement Data:                                                          
Net interest income....................................              $99,620    
Total expenses.........................................              284,920    
                                                             -----------
Net income (loss)......................................            $(185,300)   
                                                             ===========

RISK FACTORS

         Prospective  investors  should consider  carefully,  in addition to the
other  information  contained in this  Prospectus,  the  following  risk factors
before  purchasing  shares of the Common Stock offered  hereby.  This Prospectus
contains certain forward-looking statements,  which statements can be identified
by the use of  forward-looking  terminology  such as  "may,"  "will,"  "expect,"
"anticipate,"  "estimate"  or  "continue"  or  the  negative  thereof  or  other
comparable  terminology.   The  Company  cautions  readers  that  the  following
important factors,  among others, in some cases have affected, and in the future
could affect,  the Company's actual results and could cause the Company's actual
results in 1998 and beyond to differ  materially  from  those  expressed  in any
forward-looking statements made herein.                                         

         No  Operating  History for the Banks.  Cardinal  Bank opened on June 8,
1998.  None of the Additional  Banks is even in the  organizational  stage. As a
bank holding company, the Company's  profitability will depend entirely upon the
operations  of the  Banks.  The  operations  of the Banks will be subject to the
risks inherent in the  establishment of a new business and,  specifically,  of a
new bank.  The likelihood of the success of each of the Banks must be considered
in light of the expenses,  complications,  and delays frequently  encountered in
connection with the development of a new bank and the competitive environment in
which each Bank will operate.  Typically,  new banks incur  substantial  initial
expenses and often are not  profitable  on an annual basis until  several  years
after commencing business.  While implementing its growth strategy,  the Company
does not  anticipate  profitable  operations on a  consolidated  basis for three
years.  To  commence  business,  each of the Banks must also  attract and retain
officers and  employees.  There can be no  assurance  that any of the Banks will
ever operate  profitably  or that the impact of one or more of their  respective
operations will not have a material  adverse impact on the results of operations
and financial condition of the Company.                                         

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         Dependence on Bank Directors.  The Company believes that the successful
development  and initial  operation of each Bank will also be largely  dependent
upon the efforts of its proposed  directors,  most of whom have been identified.
See  "Management."  None of the proposed  directors of the  Additional  Banks is
obligated to serve as a director of, or to otherwise remain associated with, his
or her Bank. The failure of the proposed directors to continue to participate in
the management of the Additional  Banks could have a material  adverse effect on
the operations of such Banks and the Company.                                   

         No Assurance of Regulatory  Approvals  for the  Additional  Banks.  The
Company  must  secure the  approval  of the Board of  Governors  of the  Federal
Reserve  System (the "Federal  Reserve") and of the Virginia  State  Corporation
Commission  (the "SCC") to own the common stock of each  Additional  Bank.  Each
Additional  Bank must also obtain approval of its charter  application  from the
Office of the  Comptroller  of the  Currency  (the  "OCC") and  approval  of its
application for deposit insurance from the Federal Deposit Insurance Corporation
(the  "FDIC").  No  assurances  can be given as to when or whether any or all of
such approvals will be obtained.                                                

         The Company anticipates that final approval of the applications for the
Manassas/Prince    William   Bank,    the    Reston/Loudoun    Bank,   and   the
Alexandria/Arlington  Bank will be conditioned upon a minimum  capitalization of
each Bank of  approximately  $8.0 million.  The OCC has the authority to require
more or less capital.  If more capital were  required,  the Company would likely
fund the  increased  capitalization  through  the use of net  proceeds  from the
Offering or through loans from third-party  financial  institutions  (subject to
obtaining regulatory  approval).  There can be no assurance,  however,  that the
Company would be able to obtain third-party  financing on acceptable terms or in
amounts sufficient to fund any increase in mandated capitalization minimums. The
use by the Company of  borrowed  funds for  capitalization  of the Banks will be
less  favorable to the Company's  financial  condition  than the use of Offering
proceeds for this  purpose.  See  "Business"  and  "Government  Supervision  and
Regulation."                                                                    

         If one or more of the  Additional  Banks do not receive  the  necessary
regulatory  approvals,  the Company will devote the proceeds of this Offering to
support  the  growth of  Cardinal  Bank and such of the  Additional  Banks  that
receive the necessary  approvals and open for business.  The Company anticipates
that such  growth  would be achieved  through  branching.  Additionally,  if the
organization  of one or more  of the  Additional  Banks  is not  completed,  the
Company may devote part of the proceeds of this Offering to the acquisition of a
controlling  interest  in one or  more  existing  banks.  The  Company  has  not
identified any existing bank that it would seek to acquire or merge with in such
event.                                                                          

         Lack of  Established  Trading  Market and Possible  Volatility of Stock
Price.  Prior to this  Offering,  there has been no market for the Common Stock.
There can be no  assurance  as to the  liquidity of any markets that may develop
for the Common  Stock,  the  ability  of  holders of Common  Stock to sell their
securities,  or the  price  at  which  holders  would  be  able  to  sell  their
securities.  The  initial  public  offering  price of the Common  Stock has been
determined  solely by  negotiations  among the Company and Scott & Stringfellow,
Inc., Interstate/Johnson Lane Corporation and Ferris, Baker Watts Incorporated ,
the several underwriters named in this Prospectus (the "Underwriters"),  and may
bear no  relationship  to the  market  price  of the  Common  Stock  after  this
Offering.  See  "Underwriting."  The market  price of the Common  Stock could be
subject to significant  fluctuations  in response to variations in quarterly and
yearly operating  results (which could include  substantial  operating losses in
the near  term as a result  of the  pre-opening  expenses  associated  with each
Additional Bank and the start-up  losses  expected from Cardinal Bank),  general
trends in the Company's industry, and other factors.  Furthermore,  it is likely
that in some future quarter                                                     

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the Company's  operating results will be below the expectations of public market
analysts and  investors.  In such an event,  the price of the Common Stock would
likely be materially adversely affected. In addition, the stock market in recent
years has experienced extreme price and volume fluctuations that have often been
unrelated  or  disproportionate   to  the  operating   performance  of  affected
companies. These broad fluctuations may adversely affect the market price of the
Common Stock.                                                                   

         Dependence on Senior Management.  The Company's development to date has
been  largely  the result of  contributions  of certain of the senior  executive
officers of the  Company  and its  subsidiaries,  including  John H. Rust,  Jr.,
Chairman  of the  Company's  Board of  Directors,  L.  Burwell  Gunn,  Jr.,  the
Company's  President  and  Chief  Executive  Officer,  Joseph L.  Borrelli,  the
Company's  Chief  Financial  Officer,  F. Kevin  Reynolds,  the  Executive  Vice
President  and  Senior  Lending  Officer  of  Cardinal  Bank,  who,  subject  to
regulatory  approval,  is  slated  to be the  President  of  Cardinal  Bank  and
Christopher W.  Bergstrom,  the Executive  Vice  President of the Company,  who,
subject  to  regulatory  approval,   is  slated  to  be  the  President  of  the
Manassas/Prince  William  Bank.  The loss of the services of one or more of such
individuals  could have a material adverse effect on the Company's  business and
development.  No  assurance  can be  given  that  replacements  for any of these
officers could be employed if these officers' services were no longer available.
Mr. Gunn is the only executive officer with an employment contract.  The Company
does not  maintain  and has no plans to maintain  key man life  insurance on its
senior officers. See "Management."                                              

         No  Dividends.  The Company has not paid cash  dividends  on its Common
Stock and in the near-term  intends to retain any future earnings to finance its
growth.  As  the  Company's   business   operations  will  be  conducted  almost
exclusively  through the Banks,  the  Company's  ability to pay dividends on the
Common Stock in the future will be directly  dependent on the dividends  paid by
the Banks to the  Company.  The  ability  of the Banks to pay  dividends  to the
Company  will be subject  to the  profitability  of the Banks and to  government
regulations   that  limit  the  aggregate  amount  of  cash  dividends  paid  to
shareholders  based on retained earnings and then-current  income levels.  There
can be no  assurance  that the Banks'  future  earnings  will  support  dividend
payments to the Company. Additionally, there is no restriction on the ability of
the Company to issue shares of stock with  preferential  dividend  rights in the
future. See "Dividend Policy," "Government Supervision and Regulation -- Payment
of Dividends," and "Description of Capital Stock - Preferred Stock."            

         Dilution.  Purchasers of Common Stock in the Offering  will  experience
immediate  dilution  of $1.49 in the net  tangible  book  value per share of the
Common Stock from the public  offering price of $10.00 per share.  Moreover,  in
the near-term, the Company expects that the organization of the Additional Banks
will result in  dilution  of the  Company's  return on equity and  earnings  per
share. See "Dilution."                                                          

         Strong  Competition.  The Banks will encounter strong  competition from
the  financial  institutions,  including  other new banks,  in their  respective
primary  market  areas.  In addition,  established  financial  institutions  not
already  operating in any of the Banks' primary market areas may, under Virginia
law,  open  branches  in such areas at future  dates.  In the conduct of certain
aspects of their respective banking businesses, the Banks also will compete with
savings  institutions,  credit  unions,  mortgage  banking  companies,  consumer
finance companies,  insurance companies,  and other institutions,  some of which
are not subject to the same degree of regulation  and  restriction  imposed upon
the Banks.  Many of these competitors have  substantially  greater resources and
lending  limits  than the Banks will have and offer  certain  services  that the
Banks will not provide.  In addition,  many of these  competitors  have numerous
branch offices located throughout their extended market areas which provide them
with a competitive  advantage which the Banks will not have.  Furthermore,  as a
consequence of legislation                                                      

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enacted  by the  United  States  Congress,  out-of-state  banks are  allowed  to
commence  operations and compete in the Banks' market areas. No assurance can be
given that such  competition  will not have an adverse  impact on the  financial
condition  and  results  of  operations  of the  Banks  or that the  Banks  will
ultimately be able to successfully compete with other financial  institutions in
their  respective  markets.   See  "Business  --  Competition"  and  "Government
Supervision and Regulation -- Interstate Banking."                              

         Credit Risk;  Adequacy of Allowance for Loan Losses.  There are certain
risks inherent in making all loans,  including  risks with respect to the period
of time over which loans may be repaid, risks resulting from changes in economic
and industry  conditions,  risks inherent in dealing with individual  borrowers,
and, in the case of a collateralized  loan,  risks resulting from  uncertainties
about the future value of the  collateral.  Each Bank will maintain an allowance
for loan  losses  based  on,  among  other  things,  historical  experience,  an
evaluation of economic conditions, and regular reviews of delinquencies and loan
portfolio quality.  Management's judgment as to the adequacy of the allowance is
based upon a number of  assumptions  about future events which it believes to be
reasonable  but which may or may not be valid.  Thus,  there can be no assurance
that charge-offs in future periods will not exceed the allowance for loan losses
or that  additional  increases  in the  allowance  for loan  losses  will not be
required.  Additions to the allowance for loan losses would result in a decrease
of the Company's net income and, possibly, its capital.                         

         Potential  Adverse Impact of Changes in Interest  Rates.  The Company's
profitability  will be dependent to a large extent on the net interest income of
the Banks, which is the difference between the respective Banks' interest income
on  interest-earning  assets and the Banks' interest expense on interest-bearing
liabilities.  The Company,  like most financial  institution  holding companies,
will  continue  to be affected  by changes in general  interest  rate levels and
other economic factors beyond the Company's control.                            

         Dependence on Local Economic Conditions.  The success of the Company is
dependent  to a certain  extent  upon the  general  economic  conditions  in the
geographic  markets  served by the Banks.  Although  the  Company  expects  that
economic conditions will continue to be favorable in these markets, no assurance
can be given that these economic  conditions  will continue.  Adverse changes in
economic  conditions in the geographic markets that the Banks serve would likely
impair the Banks'  ability to collect loans and could  otherwise have a negative
effect on the  financial  condition  of the  Company.  See  "Business  -- Market
Areas."                                                                         

         Anti-Takeover Provisions.  Certain provisions of the Company's Articles
of Incorporation could delay or frustrate the removal of incumbent directors and
could make a merger,  tender offer or proxy  contest  involving the Company more
difficult, even if such events could be perceived as beneficial to the interests
of the shareholders. These provisions, among others, provide for staggered terms
for the Board of Directors, provide that directors may be removed only for cause
and only by the  affirmative  vote of the holders of more than two-thirds of the
Company's outstanding voting stock,  authorize the Board of Directors to fix the
rights and preferences of the shares of the Company's preferred stock, and limit
the ability of  shareholders  to call a special  meeting.  In addition,  certain
provisions of state and federal law may also have the effect of  discouraging or
prohibiting a future takeover attempt in which shareholders of the Company might
otherwise  receive a  substantial  premium for their  shares  over  then-current
market prices. To the extent that these provisions are effective in discouraging
or preventing  takeover  attempts,  they may tend to reduce the market price for
the Common Stock offered hereby. See "Description of Capital Stock."            

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         Management  Ownership and Control.  Directors and executive officers of
the Company and proposed  directors of the Additional Banks currently own in the
aggregate  approximately 46% of the outstanding shares of Common Stock, although
such individuals'  percentage  ownership is expected to decline to less than 17%
following  the  Offering.  To the extent they vote  together,  the directors and
executive  officers  of the Company and the Banks will have the ability to exert
significant  influence over the election of the Company's Board of Directors and
other  corporate  actions  requiring  shareholder  approval.  See "Management --
Ownership of the Common Stock."                                                 

         Elimination of Director and Officer  Liability.  The Company's Articles
of Incorporation  eliminate the monetary  liability of directors and officers to
the Company and its  shareholders  to the maximum  extent  permitted by Virginia
law.  Under  Virginia law, the liability of a director or officer who engages in
willful  misconduct,  a knowing  violation of the criminal law or any federal or
state securities law is not limited. Except in these cases, the liability of the
Company's officers and directors is eliminated,  which means, for example,  that
they  cannot be held  liable  for  monetary  damages  for  negligent  or grossly
negligent acts.                                                                 

         Government  Regulation.  The banking  industry is subject to  extensive
governmental supervision,  regulation and control, which has materially affected
the business of financial institutions in the past and is likely to do so in the
future.  Regulations  affecting the banking industry may be changed at any time,
and the  interpretation  of those  regulations  by examining  authorities of the
banking  industry  is also  subject to change.  There can be no  assurance  that
future changes in legislation, administrative regulations or governmental policy
will not adversely  affect the banking industry and the business of the Company.
See "Government-Supervision and Regulation."                                    

 USE OF PROCEEDS

         The net proceeds to the Company  from the sale of  2,600,000  shares of
Common Stock in the Offering are  estimated to be  approximately  $24.0  million
($27.6 million if the Underwriters' over-allotment option is exercised in full),
after deducting the  underwriting  discount and expenses payable by the Company.
Of these net proceeds,  the Company intends to use approximately $8.0 million to
capitalize  each of the  Additional  Banks,  in each case upon  receipt of final
regulatory approvals.                                                           

         Any  remaining  balance of the net proceeds  from the Offering  will be
available for general corporate purposes aimed primarily at the expansion of the
Company's  business.  While the Company  does not intend  actively to search for
opportunities to expand into additional markets,  it may consider  opportunities
that arise from time to time, which could occur through acquisitions of existing
institutions or branches.  The Company has no specific  acquisition plans at the
current time other than the Additional Banks. See "Business -- Growth Strategy."

         Pending the  capitalization  of the Additional  Banks, the Company will
lend all or part of the net  proceeds of the  Offering to Cardinal  Bank,  which
will invest such funds in short or  medium-term  interest-bearing  securities or
loans,  including  loans that are originated by loan  production  offices in the
market areas of the Additional  Banks. As and when the Company requires funds to
capitalize an Additional Bank,  Cardinal Bank will repay to the Company proceeds
of this Offering previously loaned by the Company to Cardinal Bank.             

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         If one or more of the  Additional  Banks do not receive  the  necessary
regulatory  approvals,  the Company will devote the proceeds of this Offering to
support  the  growth of  Cardinal  Bank and such of the  Additional  Banks  that
receive the necessary  approvals and open for business.  The Company anticipates
that such  growth  would be achieved  through  branching.  Additionally,  if the
organization  of one or more  of the  Additional  Banks  is not  completed,  the
Company may devote part of the proceeds of this Offering to the acquisition of a
controlling  interest  in one or  more  existing  banks.  The  Company  has  not
identified any existing bank that it would seek to acquire or merge with in such
event.                                                                          

 MARKET FOR COMMON STOCK

         The Common Stock has been  approved for listing on The Nasdaq  SmallCap
Market under the symbol "CFNL," subject to official notice of issuance. Prior to
this  Offering,  no shares of Common Stock have  traded.  As of the date of this
Prospectus,  there were  1,409,509  shares of Common Stock  outstanding  held by
approximately 88 shareholders of record.                                        

 DIVIDEND POLICY

         The Company has not declared or  distributed  any cash dividends to its
shareholders  and it is not likely that any cash  dividends will be declared for
several years.  The Board of Directors of the Company intends to follow a policy
of retaining any earnings to provide funds to operate and expand the business of
the Company and the Banks for the foreseeable future. The future dividend policy
of the Company is subject to the  discretion  of the Board of Directors and will
depend upon a number of factors, including future earnings, financial condition,
cash  requirements,  and general business  conditions.  The Company's ability to
distribute cash dividends will depend entirely upon the Banks'  abilities to pay
dividends to the Company.  As national banks, the Banks will be subject to legal
limitations  on the amount of dividends  each is permitted to pay.  Furthermore,
neither the Banks nor the  Company may declare or pay a cash  dividend on any of
their  capital  stock if they are  insolvent  or if the payment of the  dividend
would render them  insolvent or unable to pay their  obligations  as they become
due  in the  ordinary  course  of  business.  See  "Government  Supervision  and
Regulation - Payment of Dividends."                                             

DILUTION

         At March  31,  1998,  the  Company  had a net  tangible  book  value of
approximately  $10.12 million,  or $7.18 per share.  Net tangible book value per
share  represents  the  amount  of  the  Company's  shareholders'  equity,  less
intangible assets,  divided by the number of shares of Common Stock outstanding.
Dilution per share to new investors represents the difference between the amount
per share paid by  purchasers  of shares of Common  Stock in the  Offering  made
hereby  and the pro  forma net  tangible  book  value per share of Common  Stock
immediately  after  completion of the  Offering.  After (i) giving effect to the
sale by the Company of 2,600,000  shares of Common Stock  offered  hereby at the
public  offering price of $10.00 per share,  (ii) deducting  estimated  offering
expenses,  and (iii)  giving  effect to the  application  of the  estimated  net
proceeds as set forth under "Use of  Proceeds,"  the pro forma net tangible book
value of the  Company at March 31,  1998 would  have been  approximately  $34.12
million,  or $8.51 per share.  This  represents  an  immediate  increase  in net
tangible book value of $1.33 per share to existing shareholders and an immediate
dilution of $1.49 per share to new investors.  The following  table  illustrates
this per share dilution:                                                        

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                                                                [Download Table]

                                                                            
Public offering price per share...................................... $10.00
Net tangible book value per share at March 31, 1998..................   7.18
Increase per share attributable to new investors.....................   1.33
                                                                       -----
Pro forma net tangible book value per share after the Offering.......   8.51
Dilution per share to new investors..................................   1.49
                                                                       -----
                                                                      $10.00
                                                                       =====

         Assuming the Underwriters'  over-allotment option is exercised in full,
pro forma net tangible book value upon completion of the Offering would be $8.58
per share, the immediate increase in pro forma net tangible book value of shares
to existing shareholders would be $1.40 per share, and the immediate dilution to
new investors would be $1.42 per share.                                         

         The  following  table sets forth on a pro forma basis,  as of March 31,
1998 (a) the number of shares of Common Stock  purchased  from the Company prior
to the Offering and the number of shares purchased in the Offering,  and (b) the
total consideration and average price per share paid to the Company with respect
to Common Stock held by the existing  shareholders of the Company and to be paid
by new  investors  in the  Offering at the public  offering  price of $10.00 per
share.                                                                          

                                                        [Enlarge/Download Table]


                                                                                                            Average     
                                                                                                           Price Per    
                                            Shares Purchased (1)           Total Consideration               Share      
                                        ---------------------------  -------------------------------  ------------------
                                            Number       Percent           Amount         Percent                       
                                                                                                                        
Existing shareholders..................   1,409,509       35.2%          $10,571,000       28.9%            $7.50       
New investors..........................   2,600,000       64.8%           26,000,000       71.1%           $10.00       
                                          ---------       -----           ----------       -----                        
  Total................................   4,009,509      100.0%          $36,571,000      100.0%                        
                                          =========      ======          ===========      ======                        

_____________________                                                           

(1)  Excludes  up to  390,000  shares of Common  Stock  which may be sold by the
     Company  upon  exercise  of  the  over-allotment   option  granted  to  the
Underwriters. See "Underwriting."                                     

         All shares of Common Stock outstanding on March 31, 1998 were issued in
a private  placement,  are restricted and may be resold only in accordance  with
Securities and Exchange Commission Rule 144. See "Description of Capital Stock -
Shares Eligible for Future Sale."                                               

CAPITALIZATION

         The following table sets forth the consolidated  capitalization  of the
Company at March 31,  1998,  and as adjusted  to reflect  the sale of  2,600,000
shares of Common Stock pursuant to the Offering at the public  offering price of
$10.00 per share and the application of the net proceeds  therefrom as set forth
under "Use of Proceeds."                                                        

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                                                                        March 31, 1998 (1)      
                                                                --------------------------------
                                                                   Actual         As Adjusted   
                                                                                                
Shareholders' equity:                                                                           
Common stock, $1.00 par value; 50,000,000 shares                                                
  authorized, 1,409,509 shares issued; 4,009,509 shares                                         
  issued, as adjusted..........................................  $1,409,509        $4,009,509   
Preferred stock, $1.00 par value; 10,000,000 shares                                             
  authorized; none issued......................................           -                 -   
Uncollected subscriptions receivable (2).......................     (99,977)          (99,977)  
Additional paid-in capital.....................................   9,145,809        30,545,809   
Accumulated deficit............................................    (330,478)         (330,478)  
                                                                -----------         ---------   
Total shareholders' equity..................................... $10,124,863       $34,124,863   
                                                                ===========       ===========   

_________________________                                                       

(1)  Excludes  up to  390,000  shares of Common  Stock  which may be sold by the
     Company  upon  exercise  of  the  over-allotment   option  granted  to  the
Underwriters. See "Underwriting."                                     

(2)  Represents stock  subscriptions  for which payment had not been received at
May 4, 1998. Since May 4, 1998, all such subscriptions have been paid.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The Company was in a development  stage until  Cardinal Bank  commenced
operations on June 8, 1998. The Company has funded its start-up and organization
costs through $10.57 million raised in a private  placement of Common Stock. For
the periods ended December 31, 1997 and March 31, 1998, net losses were $145,178
and $185,300,  respectively. While implementing its growth strategy, the Company
does not  anticipate  profitable  operations on a  consolidated  basis for three
years. At March 31, 1998, shareholders' equity was $10.12 million. Cash and cash
equivalents  totaled  $9.68 million at March 31, 1998, of which $8.0 million was
used to  capitalize  Cardinal  Bank,  which opened on June 8, 1998.  The Company
believes that the net proceeds of the Offering  will satisfy the Company's  cash
requirements and enable it to capitalize the Additional Banks. Accordingly,  the
Company does not anticipate that it will be necessary to raise  additional funds
for the  operation  of the  Company  and the Banks over the next 36 months.  For
additional  information  regarding material expenditures during such period, see
"Use of Proceeds." For additional  information  regarding the plan of operations
for the Company and the Banks, see "Business" and "Management."                 

Year 2000 Compliance                                                            

         As the year 2000  approaches,  an important  business issue has emerged
regarding how existing  software  programs and operating systems can accommodate
this date value.  Many existing  application  software products were designed to
accommodate  a two-digit  year.  For example,  "98" is stored on the systems and
represents  1998 and "00"  represents  1900. The Company  utilizes a third-party
vendor for processing its primary banking applications. In addition, the Company
also uses several other third-party vendors for ancillary computer applications.
All third  party  vendors  for the  Company's  banking  applications  either are
already  Year  2000  ready or are in the  process  of  modifying,  upgrading  or
replacing their computer  applications to ensure Year 2000  compliance.  Because
the Company was                                                                 

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recently  formed,  all its data  processing  equipment  is new and is Year  2000
ready. The Company does not expect to incur any material expense to replace data
processing  equipment.  The Company has a Year 2000 compliance  program where it
reviews the Year 2000 issues that may be faced by its third-party vendors. Under
such program, the Company is examining the need for modifications or replacement
of all non-Year  2000 ready  pieces of software.  Because the Company is new, it
has had the  opportunity  to screen  its  third-party  vendors  and those it has
chosen either are Year 2000 ready or in the process of becoming  compliant.  All
of the Company's data processing vendor contracts have Year 2000 clauses,  which
allow the  Company to test for  compliance  and to cancel  without  penalty if a
vendor does not meet its Year 2000  compliance  plan.  The  Company's  Year 2000
compliance program provides that all critical data processing  applications will
be tested and that testing will be completed on or before March 31, 1999. If any
software is not Year 2000 ready at March 31, 1999,  the vendor  contract will be
terminated  and  an  alternative  vendor  will  be  selected.  The  Company  has
identified  alternative  vendors,  should they be necessary.  The Company's loan
policy includes Year 2000 risk management parameters and, because the Company is
new,  it has no Year  2000  credit  risk at this  time.  The  Company  does  not
currently  expect that the cost of its Year 2000 compliance  program,  including
possible  remediation  costs,  will be material to its  financial  condition and
expects that it will satisfy such compliance program without material disruption
of  its  operations.  In the  event  that  the  Company's  significant  vendors,
including  its  correspondent,  The Federal  Reserve  Bank of  Richmond,  do not
successfully  and timely achieve Year 2000  compliance,  however,  the Company's
business,  results of  operations  or  financial  condition  would be  adversely
affected.                                                                       

BUSINESS

General                                                                         

         Cardinal Financial  Corporation is a bank holding company headquartered
in Fairfax, Virginia which currently operates Cardinal Bank in Fairfax, Virginia
and  intends  to  organize  and   establish   three   community   banks  in  the
Manassas/Prince William County,  Reston/Loudoun County and  Alexandria/Arlington
County markets in northern Virginia.  Collectively,  these markets are among the
most affluent and fastest growing areas in Virginia.                            

         The Company intends to pursue a community  banking strategy by offering
a broad range of banking  products to  individuals,  professionals  and small to
medium-sized  businesses,  with an  emphasis on  personalized  service and local
decision-making  authority.  Management's expansion strategy includes attracting
experienced  local management  teams who will have  significant  decision-making
authority  at the local bank  level and local  independent  boards of  directors
consisting  of  individuals  with strong  community  affiliations  and extensive
business  backgrounds  and  business  development  potential  in the  identified
markets. Each management team will operate in a manner that provides responsive,
personalized  services.  The Company will provide credit policies and procedures
as well as centralized back office functions to provide corporate, technological
and marketing support to the Banks.                                             

         The  Company  was  formed in late  1997,  principally  in  response  to
perceived  opportunities  resulting from the takeovers of several Virginia-based
banks by regional bank holding companies.  Since January 1, 1997, four community
banks headquartered in northern Virginia have been acquired, and the acquisition
of a fifth community bank is pending. Collectively,  these banks had deposits of
approximately  $1.0 billion.  Moreover,  in 1997 three statewide banks,  Central
Fidelity  National Bank,  Signet Bank,  N.A. and Jefferson  National Bank,  with
substantial  northern  Virginia  operations were acquired by large  out-of-state
bank holding  companies.  At June 30, 1997, those three acquired statewide banks
had  deposits  in the  Company's  targeted  market area of  approximately  $1.75
billion.                                                                        

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         In the  Company's  market  area,  the  bank  consolidations  have  been
accompanied  by the  dissolution  of local boards of directors and relocation or
termination  of  management  and  customer  service  professionals.  The Company
believes that local industry  consolidation has disrupted customer relationships
as the  larger  regional  financial  institutions  increasingly  focus on larger
corporate customers,  standardized loan and deposit products and other services.
Generally,  these  products and services are offered  through less  personalized
delivery  systems,  which has created the demand for high quality,  personalized
services to small and medium-sized  businesses and  professionals.  In addition,
consolidation  in  the  local  market  has  created   opportunities  to  attract
experienced bankers. Bank acquisitions have dislocated  experienced and talented
management personnel due to the elimination of redundant functions and the drive
to  achieve  cost  savings.  Additionally,   uncertainty  over  possible  future
acquisitions  has helped enable the Company to attract  officers from banks that
have not been acquired.  As a result of these factors,  management  believes the
Company has a rare  opportunity  to attract its targeted  banking  customers and
experienced management personnel within the Company's identified markets.       

         Initial  Capitalization  of the  Company.  The  Company  raised  $10.57
million from the sale of Common Stock in a private  placement.  Proceeds of such
private  placement  have been used in part for  organizational  and  pre-opening
expenses,  and proceeds  totaling $8.0 million were used to capitalize  Cardinal
Bank,  which opened on June 8, 1998. The Company  intends to use the proceeds of
this Offering to open three  additional  community  banks by  capitalizing  such
banks and seeking  local  deposits  to fund loan  growth.  The Company  plans to
establish the Additional Banks in the Manassas/Prince William County market, the
Reston/Loudoun  County market and the  Alexandria/Arlington  County market.  The
Company  anticipates the Additional  Banks will open during the first quarter of
1999,  in the  third  quarter  of  1999  and  in  the  first  quarter  of  2000,
respectively.  Although it is expected  that the Manassas / Prince  William Bank
will be the first Additional Bank to open, no firm decisions have been made. The
order in which the Additional  Banks open, and their  respective  opening dates,
may be  influenced  by a variety  of  factors,  including  the  availability  of
suitable sites and the receipt of regulatory approvals.                         

         Experienced  Board and  Management.  The  Company's  Board of Directors
consists of 11  individuals,  seven of whom formerly were founding  directors of
First Patriot Bankshares  Corporation,  the holding company for Patriot National
Bank, headquartered in Reston, Virginia. First Patriot was organized in 1990 and
in 1997 was acquired by an out-of-state bank holding company. John H. Rust, Jr.,
the Company's Chairman,  served as Chairman of First Patriot.  Company directors
who were former First Patriot  directors  include the chairs of First  Patriot's
loan, audit, strategic planning, compensation and marketing committees. Until he
joined the Company in late 1997, L. Burwell Gunn,  Jr., the Company's  President
and Chief Executive  Officer,  served as Executive Vice President and Commercial
Division Head for the Greater  Washington  Region for Crestar Bank.  The last 13
years of Mr.  Gunn's 25 year career with  Crestar  all  involved  service in the
northern Virginia area. Each of the Company's five other executive  officers has
14 or more years of banking experience in northern Virginia. See "Management."  

Strategy of the Company                                                         

         The Company's  business strategy is to successfully  penetrate selected
northern  Virginia  markets by  operating  a  locally-oriented  organization  of
independently  managed  community  banks.  The major  elements of this  strategy
include:                                                                        

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         Expand the Company's  market share in the central Fairfax County market
through Cardinal Bank;                                        

         Establish loan  production  offices in the Company's  three  additional
         identified markets in anticipation of future openings of the Additional
Banks;                                                        

         Target small and medium-sized  business  customers,  professionals  and
         individuals   that   demand  the   attention   and   service   which  a
community-oriented bank is well suited to provide;            

         Deliver a broad array of modern  banking  products and  services  using
         up-to-date technology and a decentralized operating strategy with local
decision-making; and                                          

         Maintain   centralized   support   functions,   including  back  office
         operations,  credit  policies  and  procedures,   investment  portfolio
         management,   administration,  and  human  resources  and  training  to
         maximize  operating  efficiencies  and  facilitate   responsiveness  to
         customers.  Each of the Additional Banks will operate with a uniformity
         of service and products  that will be  associated  with the  "Cardinal"
name.                                                         

         Management intends to gain market share by attracting customers through
a superior level of prompt and  personalized  banking  service.  The goal of the
Company's  organizers  and management is to create a  customer-driven  financial
institution that provides high value to its customers by delivering  customized,
quality products and services. Management believes that such an institution will
appeal to  customers  who  prefer  to  conduct  their  banking  business  with a
locally-managed  financial institution that demonstrates both a genuine interest
in their financial affairs and an ability to cater to their financial needs.    

         The Company's  directors and executive officers have made a significant
investment in the Company. This financial commitment by management, coupled with
the Company's strategy, is intended to result in an organization that is focused
on creating shareholder value.                                                  

         Decentralized  Operating  Strategy.  The  foundation  of the  Company's
strategy is to operate a  multi-community  bank  organization  which  emphasizes
decision-making  at  the  local  bank  level  combined  with  strong  corporate,
technological,  marketing,  financial  and  managerial  support.  The  Company's
operating model is for each bank to operate with local  management and boards of
directors  consisting  of  individuals  with  extensive  knowledge  of the local
community and the authority to make credit decisions.  The Company believes this
operating  strategy  will  enable  the Banks to  attract  customers  who wish to
conduct their business with a locally owned and managed  institution with strong
ties and an active commitment to the community.                                 

         Centralized  Corporate Support.  The Company will provide oversight and
various  services to the Banks,  including  technology,  finance and accounting,
human resources, credit administration, internal audit, compliance, loan review,
marketing,   retail  administration,   administrative   support,   policies  and
procedures,  product development and item processing. By providing such services
and  oversight,  the  Company  expects  not only to  achieve  monetary  savings,
compared  to the  costs if the  Banks  were  individually  responsible  for such
functions,  but also expects to achieve a uniformity of  operations  and service
that will be  associated  with the  "Cardinal"  name in the  Company's  northern
Virginia  markets.  The Banks' principal focus will be to generate  deposits and
loans.  This  corporate  support  system  will  enable  the  Company  to achieve
administrative  economies of scale while  capitalizing on the  responsiveness to
client needs of its decentralized  community bank network. With the support from
its  significant   investment  in  infrastructure,   particularly  a  management
information  system which will link the Company to the Banks and facilitate data
processing,  compliance, and reporting requirements, the Company believes it has
the operational and administrative  capacity to accommodate the Additional Banks
and effectively manage the Company's growth for the foreseeable future.         

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Growth Strategy                                                                 

         Following the Offering, the Company intends to focus on the development
of the Additional  Banks and the growth of Cardinal Bank.  Each Bank's growth is
expected to come from within such Bank's  primary  service area through loan and
deposit business. The Company will focus on acquiring market share, particularly
from  large  bank  holding  companies,   by  emphasizing  local  management  and
decision-making  and  through  delivering   personalized  services  to  business
customers and individuals. Specifically, the Company's competitive strategy will
consist  of  approving  loan  requests  quickly  with a  local  loan  committee,
operating with flexible, but prudent, lending policies, personalizing service by
establishing a long-term banking relationship with the customer, and maintaining
the  requisite  personnel  to ensure a high level of service.  While the Company
does not currently intend to actively search for expansion  opportunities beyond
its designated markets,  the Company may consider  opportunities that arise from
time to time, which could occur through acquisitions of existing institutions or
branches.  The  Company has no specific  acquisition  plans at the current  time
other than the establishment of the Additional Banks.                           

         The Company  intends to organize  and open three  additional  community
banks in northern  Virginia and anticipates that all such banks will be national
banks.  Each of the Additional Banks will operate under the "Cardinal" name with
appropriate  modifiers to denote its distinct market area. The first  Additional
Bank is expected to be the Manassas/Prince  William Bank and will serve Manassas
and Prince William County. The other Additional Banks will be the Reston/Loudoun
Bank,   serving   western   Fairfax   County  and   Loudoun   County,   and  the
Alexandria/Arlington Bank, serving the Alexandria and Arlington communities. The
Company  intends  that the  Manassas/Prince  William Bank will open in the first
quarter of 1999. Either the Reston/Loudoun Bank or the Alexandria/Arlington Bank
is expected to open in the third quarter of 1999, and the other will open in the
first quarter of 2000. Although it is expected the Manassas/Prince  William Bank
will be the first Additional Bank to open, no firm decisions have been made. The
order in which the Additional  Banks open, and their  respective  opening dates,
will be  influenced  by a variety of  factors,  including  the  availability  of
suitable sites and the receipt of proper regulatory approvals.                  

         Prior to opening the Additional Banks,  management of the Company first
will  identify  an  individual  who  will  serve  as the  president,  as well as
additional  individuals  who will  serve on the local  board of  directors.  The
Company  believes that a management  team that is familiar with the needs of its
community can provide higher quality personalized service to its customers.  The
local  management  team  will  have  a  significant  amount  of  decision-making
authority  and  will  be  accessible  to  its  customers.  As a  result  of  the
consolidation  trend in the northern  Virginia  area,  the Company's  management
believes  there  are  significant  opportunities  to  attract  experienced  bank
managers  who would like to join an  institution  promoting a community  banking
concept.                                                                        

         In addition, prior to opening the Additional Banks, the Company intends
to establish,  through its Cardinal Bank subsidiary,  loan production offices in
Manassas, Alexandria and the Reston area of Fairfax County to establish customer
relationships,  brand  awareness  and a  pipeline  of loan  business.  The  loan
production  offices are expected to be staffed by personnel who will  ultimately
be  employed by the  respective  Additional  Banks when they open for  business.
Loans  originated in the loan production  offices are expected to be transferred
by Cardinal Bank to the respective Additional Banks when they are opened.       

         Each Bank will have a local board of directors  which will be comprised
of  prominent  members  of  the  community,   including   business  leaders  and
professionals.  These  directors not only will operate                          

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the Banks, but also will act as ambassadors of their respective Banks within the
community and will be expected to promote the business development of each bank.
The  directors  and  officers of the Company and the  proposed  directors of the
Additional  Banks are active in the civic,  charitable and social  organizations
located in the local  communities.  It is anticipated  that members of the local
management  teams  will  hold  leadership  positions  in a number  of  community
organizations, and continue to volunteer for other positions in the future.     

         The Company  believes  that each Bank's  ability to compete  with other
financial  institutions  in its  respective  market area will be enhanced by its
posture  as a locally  managed  bank with a broad base of local  ownership.  The
proposed  directors of each of the Additional Banks, most of whom reside or work
in the  market  area  in  which  their  respective  Banks  will  operate,  own a
significant  amount of Common  Stock.  In addition,  the Company  anticipates  a
significant  percentage  of the shares of Common Stock sold in the Offering will
be sold to  individuals  residing  in the  areas  served  or to be served by the
Banks.  The Company  believes that local ownership of the Company's Common Stock
is a highly effective means of attracting customers and fostering loyalty to the
Banks.                                                                          

Market Areas                                                                    

         The target market includes areas in and around Fairfax County including
the independent  cities of Fairfax and Alexandria,  as well as Arlington County,
Manassas,  and Prince William and Loudoun counties.  Interstates 95, 495, and 66
all pass through the market area and provide  efficient  access to other regions
of the state.  Prominent  local  newspapers,  the Washington Post and Washington
Times,  and a number of radio and  television  stations  provide  diverse  media
outlets.  The broad exposure of television,  print media and radio offer several
opportunities to explore effective  advertising and public relations avenues for
the Company.                                                                    

         The Company plans to establish banking  operations in four locations in
the broad target market,  each  representing a separate market.  These distinct,
but contiguous  markets are: (1) the City of Fairfax and central Fairfax County;
(2) the City of Manassas and Prince William  County;  (3) the City of Alexandria
and  Arlington  County;  and,  (4) Reston and Herndon  (both in western  Fairfax
County),  together with Loudoun County. As of 1997,  Fairfax County, the city of
Fairfax, Prince William County, the city of Manassas, Arlington County, the city
of  Alexandria  and Loudoun  County  each ranked in the top ten for  Virginia in
median household income, and collectively the population of the area represented
24.4% of the state's  total  population.  State income tax receipts for the area
represented  37.9% of the total  income tax  receipts  collected  by Virginia in
1995.                                                                           

Central Fairfax County and City of Fairfax                                      

         The  Fairfax  market  includes  the city of Fairfax as well as suburban
Vienna,  Merrifield and Tysons  Corner.  Fairfax County and the city of Fairfax,
when combined,  had a population of 933,309 in 1997, which  represented an 11.3%
increase from 838,206 in 1990. In 1997,  Fairfax  County had a median  household
income of  $73,108,  and the city of Fairfax  had a median  household  income of
$62,656, which ranked them first and third,  respectively,  in Virginia. Fairfax
County's median  household income exceeded the state median of $30,854 by 136.9%
and  represented  growth of 23.1% since 1990.  Likewise,  the city of  Fairfax's
median  household  income  exceeded the state  median by 103.1% and  represented
growth of 22.9% since 1990. Collectively as of June 30, 1997, Fairfax County and
the city of  Fairfax  had $10.9  billion  of total  commercial  bank and  thrift
deposits with 62.1% concentrated with the top four financial  institutions.  The
market  has over 75  million  square  feet of office  space,  another 35 million
square feet of industrial/hybrid space and, when viewed together, represents the
sixth largest office space market in the country.                               

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Prince William County and City of Manassas                                      

         The Prince  William County market  includes the city of Manassas.  When
combined,  Prince  William  County and the city of Manassas had a population  of
286,750 in 1997,  which  represented  a 17.7%  increase from 243,643 in 1990. In
1997,  Prince William County had a median household  income of $56,642,  and the
city of Manassas  had a median  household  income of $54,733,  which ranked them
fifth and eighth,  respectively,  in Virginia.  Prince William  County's  median
household  income exceeded the state median by 83.6% and  represented  growth of
14.7%  since 1990.  Likewise,  the city of  Manassas'  median  household  income
exceeded the state median by 77.4% and  represented  growth of 17.3% since 1990.
Collectively as of June 30, 1997, Prince William County and the city of Manassas
had $1.4  billion  of total  commercial  bank and  thrift  deposits  with  70.3%
concentrated with the top four financial institutions. The market had a civilian
labor force of  approximately  135,000 with the most common job  classifications
being professional services,  retail trade,  construction and government.  Major
employers  include  Dominion  Semi-Conductor  (a joint  venture  between IBM and
Toshiba), Lockheed Martin, Prince William Hospital, GTE and Giant Food.         

Arlington County and City of Alexandria                                         

         This  market  includes   Arlington  County,  the  city  of  Alexandria,
Springfield and the Newington/Lorton  area. When combined,  Arlington County and
the city of Alexandria had a population of 294,264 in 1997, which  represented a
4.3%  increase  from  282,119 in 1990.  In 1997,  Arlington  County had a median
household  income of $55,590,  and the city of Alexandria had a median household
income of $51,589, which ranked them sixth and tenth, respectively, in Virginia.
Arlington  County's median  household  income exceeded the state median by 80.2%
and represented growth of 24.4% since 1990.  Likewise,  the city of Alexandria's
median  household  income  exceeded  the state  median by 67.2% and  represented
growth of 24.4% since 1990.  Collectively as of June 30, 1997,  Arlington County
and the city of Alexandria had $4.9 billion of total  commercial bank and thrift
deposits with 66.0% concentrated with the top four financial  institutions.  The
market's employment is  well-distributed  between the public and private sector.
Significant public sector employers include the U.S. Department of Defense,  the
city of Alexandria,  and the Washington  Metropolitan  Transit Authority.  Major
private  sector  employers  include MCI  Telecommunications,  USAirways  and the
Washington Post.                                                                

Western Fairfax / Loudoun County                                                

         The western  Fairfax market  includes  Reston,  Herndon,  Chantilly and
Dulles,  which  are all  located  in close  proximity  to  Dulles  International
Airport.  This  market  has a large  inventory  of  office  space  comprised  of
industrial/hybrid  space,  hotel space and retail space.  Major employers in the
western Fairfax market include American Mobile Satellite  Corporation,  Cordant,
Student Loan Marketing  Association (Sallie Mae), Oracle Systems,  United Parcel
Service, Aetna Life Insurance,  Computer Sciences Corporation,  AT&T, Electronic
Data Systems and Volt Technical Services.                                       

         Loudoun County had a population of 128,719 in 1997, which represented a
49.4%  increase  from  86,129  in 1990.  In 1997,  Loudoun  County  had a median
household  income of $58,938,  which ranked it fourth in Virginia,  exceeded the
state median by 91.0%,  and  represented  growth of 12.8% since 1990. As of June
30,  1997,  Loudoun  County  had $1.0  billion  of  total  deposits  with  59.9%
concentrated with the top four banking institutions.                            

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The Banks                                                                       

         Cardinal Bank opened on June 8, 1998,  and the Company  intends to open
the  Additional  Banks  by  capitalizing  each  of  the  Additional  Banks  with
approximately $8.0 million and seeking local deposits to fund loan growth.      

         The Banks  will  engage in the  commercial  banking  business  in their
respective  communities.  The Company  believes  that there is a demand for, and
that the  northern  Virginia  communities  described  herein will  support,  new
locally operated  community  banks.  Although the Company could obtain a banking
presence in the  identified  markets by opening branch offices of Cardinal Bank,
management  of the Company  believes  that  separate  banks with their own local
boards of directors and their own policies,  tailored to the local market,  is a
preferable approach.  Each Bank will provide personalized banking services, with
emphasis on the financial needs and objectives of individuals, professionals and
small to medium-sized  businesses.  Additionally,  substantially  all credit and
related  decisions  will be made by the  Banks'  local  management  and board of
directors, thereby facilitating prompt response.                                

         The principal business of each Bank will be to accept deposits from the
public and to make loans and other  investments.  The principal sources of funds
for each Bank's loans and investments are expected to be demand,  time,  savings
and other deposits,  repayment of loans, and borrowings.  In addition, a portion
of the net proceeds of this  Offering,  once  contributed to the capital of each
Additional  Bank,  will  be  used by each  Additional  Bank to fund  loans.  The
principal source of income for each Bank is expected to be interest collected on
loans and other investments. The principal expenses of each Bank are expected to
be interest paid on savings and other deposits,  employee  compensation,  office
expenses,  and other  overhead  expenses.  Initially,  the Banks  will not offer
trust, fiduciary or investment services.                                        

         The Company is committed to providing high quality banking products and
services to the Banks'  customers and has made a  significant  investment in its
advanced  automated  operating  accounting system which supports virtually every
banking  function.  The system  provides the technology that fully automates the
branches, processes bank transactions,  mortgages, loans and electronic banking,
conducts  data base and direct  response  marketing,  provides  cash  management
solutions,  streamlined  reporting and  reconciliation  support as well as sales
support.                                                                        

         With this investment in technology,  the Company offers  Internet-based
delivery  products for both  consumers and commercial  customers.  Customers can
open accounts, apply for loans, check balances, check account history,  transfer
funds,  download images of checks,  pay bills,  download active  statements into
QuickenTM or Microsoft MoneyTM, use interactive  calculators and transmit e-mail
with the Company over the Internet.  This is an inexpensive  way for the Company
to expand its geographic  borders and branch activities while providing the kind
of services one would expect from the larger banks.                             

         The Company also offers  customers the  convenience  of digital  imaged
checks that make it easy to reconcile  statements,  organize  and store  account
information  while  streamlining  the back  office.  Every  item is  imaged  and
available for  inspection.  Among the many  features,  check imaging  allows for
instant  statement  reconstruction  for research  which can be faxed or e-mailed
directly to a customer's personal computer.                                     

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Customers                                                                       

         Management believes that the recent bank consolidation  within northern
Virginia   provides   a   significant   opportunity   to  build  a   successful,
locally-oriented franchise. Management of the Company further believes that many
of  the  larger  financial  institutions  do  not  emphasize  a  high  level  of
personalized service to the small and medium-sized  commercial,  professional or
individual retail customers.  The Company intends to focus its marketing efforts
on attracting  small and  medium-sized  businesses  and  professionals,  such as
physicians,  accountants and attorneys.  Because the Company intends to focus on
businesses and professionals,  management believes that the majority of its loan
portfolio will be in the commercial  area with an emphasis placed on originating
sound,  profitable  commercial  and  industrial  loans  secured by real  estate,
accounts receivable, inventory, property, plant and equipment.                  

         Although the Company  expects to concentrate  its lending to commercial
businesses,  management  also  anticipates  that it will  attract a  significant
amount of professional and consumer  business.  Management  expects that many of
its customers  will be the principals of the small and  medium-sized  businesses
for  whom the  Banks  will  provide  banking  services.  Management  intends  to
emphasize  "relationship  banking" in order that each customer will identify and
establish  a comfort  level  with bank  officers  who come to  understand  their
customers' business and financial needs in depth.  Management intends to develop
its retail  business with  individuals who appreciate a higher level of personal
service, contact with their lending officer and responsive  decision-making.  It
is  further  expected  that most of the  Company's  business  will be  developed
through its lending  officers and local  boards of directors  and by pursuing an
aggressive strategy of making calls on customers throughout the market area.    

Products and Services                                                           

         The  Company  intends to offer a broad  array of banking  products  and
services  to its  customers.  The  proceeds  from the  Offering  will enable the
Company to proceed to organize the  Additional  Banks.  Cardinal Bank  currently
provides,  and the  Additional  Banks are  expected  to  provide,  products  and
services that are substantially similar to those set forth below.               

         Loans.  Through each Bank, the Company intends to offer a wide range of
short to long-term commercial and consumer loans, which are described in further
detail below. The Company has established  pre-determined  percentage  levels as
targets for the  division of the  Company's  loan  portfolio  across the various
categories  of loans.  The Company  expects that  commercial  loans,  commercial
mortgage loans,  residential mortgage loans,  consumer loans and credit card and
other  loans  will  account  for  approximately   35%,  20%,  30%,  8%  and  7%,
respectively,  of its loan  portfolio.  The Company  believes  that this initial
division  reflects  the current  credit  demands of its  markets and  provides a
sufficient amount of diversification to avoid over-reliance on one category. The
Company may adjust these  levels from time to time as the credit  demands of the
community change and as each Bank's business evolves.                           

         Credit  Policies.  With  respect to each  Bank's  loan  portfolio,  the
Company will oversee credit  operations  while still granting local authority to
each Bank. The Company's chief credit officer will be primarily  responsible for
maintaining  a quality loan  portfolio and  developing a strong  credit  culture
throughout the entire organization. The chief credit officer will be responsible
for  developing  and  updating  the  credit  policies  and  procedures  for  the
organization.  The Board of Directors of any Bank                               

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may make exceptions to these credit policies and procedures as appropriate,  but
any such exception must be documented and made for sound business reasons.      

         Credit quality will be controlled by the chief credit  officer  through
compliance  with the Company's  credit  policies and  procedures.  The Company's
risk-decision  process  will be  actively  managed in a  disciplined  fashion to
maintain an  acceptable  risk profile  characterized  by  soundness,  diversity,
quality,  prudence,  balance and  accountability.  The Company's credit approval
process will consist of specific  authorities  granted to the lending  officers.
Loans  exceeding a  particular  lending  officer's  level of  authority  will be
reviewed and considered for approval by an officers' loan committee and, then, a
Bank's  Board of  Directors.  In addition,  the chief  credit  officer will work
closely with each lending  officer at the Bank level to ensure that the business
being solicited is of the quality and structure that fits the Company's  desired
risk profile.                                                                   

         Under  its  credit  policies,  the  Company  will  generally  limit the
concentration  of credit risk by a particular Bank in any loan or group of loans
to 20% of that Bank's capital. Such concentration limit pertains to any group of
borrowers  related as to the source of repayment  or any one specific  industry.
Furthermore,  each Bank will establish limits on the total amount of that Bank's
outstanding loans to one borrower, which will be set below legal lending limits.
Any loan that a Bank proposes to make that will exceed such  established  limits
will require the prior approval of the Company's Board of Directors.            

         Commercial  Loans.  The  Company  expects to make  commercial  loans to
qualified  businesses in its market area. The Company's  commercial lending will
consist  primarily  of  commercial  and  industrial  loans for the  financing of
accounts receivable,  inventory, property, plant and equipment. The Company also
expects to offer Small Business  Administration  guaranteed  loans ("SBA loans")
and factoring arrangements to certain of its customers.                         

         Commercial  business loans  generally have a higher degree of risk than
residential mortgage loans, but have commensurately  higher yields.  Residential
mortgage loans generally are made on the basis of the borrower's ability to make
repayment  from his  employment  and other income and are secured by real estate
whose value tends to be easily ascertainable.  In contrast,  commercial business
loans  typically  are  made  on the  basis  of the  borrower's  ability  to make
repayment  from cash flow from its business and are secured by business  assets,
such as commercial real estate, accounts receivable, equipment and inventory. As
a result,  the  availability  of funds for the repayment of commercial  business
loans may be  substantially  dependent  on the success of the  business  itself.
Further,  the collateral for commercial  business loans may depreciate over time
and cannot be appraised with as much precision as residential real estate.      

         To manage these risks,  the  Company's  policy is to secure  commercial
loans  with  both the  assets of the  borrowing  business  and other  additional
collateral and guarantees that may be available.  In addition,  the Company will
actively monitor certain measures of the borrower,  including advance rate, cash
flow, collateral value and other appropriate credit factors.                    

         Commercial  Mortgage  Loans.  The  Company  also  expects to  originate
commercial mortgage loans. These loans are primarily secured by various types of
commercial real estate,  including  office,  retail,  warehouse,  industrial and
other  non-residential  types of  properties  and are made to the  owner  and/or
occupiers of such property.  The Company  expects these loans to have maturities
generally ranging from one to 10 years.                                         

         Commercial  mortgage  lending  entails  significant   additional  risk,
compared with residential mortgage lending.  Commercial mortgage loans typically
involve  larger loan balances  concentrated  with                               

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single  borrowers  or groups of related  borrowers.  Additionally,  the  payment
experience  on  loans  secured  by  income  producing  properties  is  typically
dependent on the successful operation of a business or a real estate project and
thus may be subject,  to a greater  extent,  to adverse  conditions  in the real
estate market or in the economy generally.  The Company's commercial real estate
loan  underwriting  criteria  require an  examination  of debt service  coverage
ratios, the borrower's creditworthiness and prior credit history and reputation,
and the Company  generally  requires  personal  guarantees  or  endorsements  of
borrowers.  The Company also  carefully  considers  the location of the security
property.                                                                       

         The Company expects that loan-to-value  ratios for commercial  mortgage
loans will not exceed 75%,  with higher  ratios  permitted  if the  borrower has
unusually  strong  general  liquidity,  net worth and cash  flow.  Loan-to-value
ratios will not exceed 85% or, if a SBA guaranty has been obtained, 90%.        

         Residential  Mortgage  Loans.  The Company expects that its residential
mortgage  loans will consist of  residential  first and second  mortgage  loans,
residential  construction  loans and home equity  lines of credit and term loans
secured by first and second  mortgages on the  residences  of borrowers for home
improvements, education and other personal expenditures. Management expects that
the Company will make mortgage  loans with a variety of terms,  including  fixed
and  floating  or variable  rates and a variety of  maturities.  Maturities  for
construction  loans will generally  range from six to 12 months for  residential
property  and  from  12  to  18  months  for  non-residential  and  multi-family
properties.                                                                     

         Residential  mortgage  loans  generally  are  made on the  basis of the
borrower's  ability to make  repayment  from his employment and other income and
are secured by real estate whose value tends to be easily  ascertainable.  These
loans  will be made  consistent  with the  Company's  appraisal  policy and real
estate  lending  policy,  which will  detail  maximum  loan-to-value  ratios and
maturities.  Loans for  owner-occupied  property  will  generally be made with a
loan-to-value  ratio of up to 80% for  first  liens  and 75% for  junior  liens.
Higher  loan-to-value  ratios may be allowed based on the  borrower's  unusually
strong general liquidity, net worth and cash flow. Loan-to-value ratios for home
equity lines of credit will generally not exceed 75%. If the loan-to-value ratio
exceeds 90% for residential  mortgage loans, the Company will obtain appropriate
credit  enhancement  in  the  form  of  either  mortgage  insurance  or  readily
marketable collateral.                                                          

         Construction  lending entails  significant  additional risks,  compared
with residential mortgage lending.  Construction loans often involve larger loan
balances  concentrated  with single  borrowers  or groups of related  borrowers.
Construction  loans also involve  additional risks attributable to the fact that
loan funds are advanced upon the security of property under construction,  which
is of uncertain value prior to the completion of construction.  Thus, it is more
difficult  to evaluate  accurately  the total loan funds  required to complete a
project and related  loan-to-value ratios. To minimize the risks associated with
construction  lending,  the Company limits  loan-to-value ratios for residential
property to 85% and for non-residential  property and multi-family properties to
80%, in addition to its usual credit analysis of its borrowers.                 

         Management  expects that the loan-to-value  ratios described above will
be  sufficient  to  compensate  for  fluctuations  in the real estate  market to
minimize the risk of loss.                                                      

         Consumer  Loans.  The  Company  expects  that its  consumer  loans will
consist primarily of installment  loans to individuals for personal,  family and
household purposes.  The specific types of consumer loans expected to be made by
the Banks include home improvement loans, debt  consolidation  loans and general
consumer lending.                                                               

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         Consumer loans may entail greater risk than residential  mortgage loans
do, particularly in the case of consumer loans that are unsecured, such as lines
of credit, or secured by rapidly depreciable assets such as automobiles. In such
cases, any repossessed  collateral for a defaulted consumer loan may not provide
an adequate source of repayment of the  outstanding  loan balance as a result of
the greater likelihood of damage, loss or depreciation. The remaining deficiency
often does not  warrant  further  substantial  collection  efforts  against  the
borrower. In addition, consumer loan collections are dependent on the borrower's
continuing  financial  stability,  and  thus  are more  likely  to be  adversely
affected by job loss, divorce, illness or personal bankruptcy.  Furthermore, the
application  of various  federal  and state  laws,  including  federal and state
bankruptcy and  insolvency  laws, may limit the amount which can be recovered on
such loans.  Such loans may also give rise to claims and  defenses by a consumer
loan  borrower  against  an  assignee  of such loan such as the  Company,  and a
borrower may be able to assert against such assignee claims and defenses that it
has against the seller of the underlying collateral.                            

         The  Company's  policy for consumer  loans is to accept  moderate  risk
while minimizing  losses,  primarily through a careful analysis of the borrower.
In evaluating  consumer loans,  the Company will require its lending officers to
review the borrower's level and stability of income, past credit history and the
impact of these  factors on the  ability of the  borrower to repay the loan in a
timely manner.  In addition,  the Company will require that its banking officers
maintain an appropriate margin between the loan amount and collateral value. The
Company  expects that many of its consumer  loans will be made to the principals
of the small and  medium-sized  businesses  for whom the Banks  provide  banking
services.                                                                       

         Credit Card and Other  Loans.  The Company also expects to issue credit
cards to certain of its  customers.  In determining to whom it will issue credit
cards,  the Company  intends to evaluate the  borrower's  level and stability of
income, past credit history and other factors.  Finally,  the Company expects to
make additional loans that may not be classified in one of the above categories.
In making such loans, the Company will attempt to ensure that the borrower meets
the Company's credit quality standards.                                         

         Deposits. Management intends to offer a broad range of interest-bearing
and  noninterest-bearing  deposit  accounts,  including  commercial  and  retail
checking  accounts,  money  market  accounts,  individual  retirement  accounts,
regular  interest-bearing  savings  accounts and  certificates of deposit with a
range of maturity date options.  Management anticipates that the primary sources
of deposits will be small and medium-sized  businesses and individuals within an
identified  market. In each identified  market,  senior management will have the
authority  to  set  rates  within  specified   parameters  in  order  to  remain
competitive with other financial  institutions.  All deposits will be insured by
the FDIC up to the maximum  amount  permitted  by law.  The  Company  expects to
implement a service charge fee schedule,  which will be  competitive  with other
financial  institutions  in a Bank's  market  area,  covering  such  matters  as
maintenance  fees on checking  accounts,  per item  processing  fees on checking
accounts, returned check charges and other similar fees.                        

         Specialized Consumer Services.  Management intends to offer specialized
products and services to its customers, such as lock boxes, travelers checks and
safe deposit services.                                                          

         Courier Services.  The Company expects to offer courier services to its
business  customers.   Courier  services  permit  the  Company  to  provide  the
convenience  and  personalized  service  its  customers  require  by  scheduling
pick-ups of deposits.                                                           

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         Telephone and Internet  Banking.  The Company  believes that there is a
strong demand within its market for telephone banking and internet banking. Both
services  allow  customers  to  access  detailed  account  information,  execute
transactions  and pay  bills  electronically.  Management  believes  that  these
services are particularly  attractive for its customers,  as it will enable them
to conduct  their  banking  business and monitor their bank accounts from remote
locations.  Management  of the Company  believes  that  telephone  and  internet
banking will assist the Banks in  attracting  and  retaining  customers and will
also encourage its customers to maintain their total banking  relationships with
the Company.                                                                    

         Automatic Teller Machines ("ATMs"). The Company plans to have an ATM at
each  office  of  each  Bank.   Management   intends  to  make  other  financial
institutions'  ATMs available to its customers and to offer  customers a certain
number of free ATM transactions per month.                                      

         Other  Products and  Services.  The Company  intends to evaluate  other
services such as trust services,  brokerage and investment services,  insurance,
and other permissible activities. Management expects to introduce these services
as they become economically viable.                                             

Competition                                                                     

         Banks generally compete with other financial  institutions  through the
selection of banking products and services offered, the pricing of services, the
level of service provided, the convenience and availability of services, and the
degree of  expertise  and the  personal  manner in which  services  are offered.
Virginia  law permits  statewide  branching by banks.  Consequently,  commercial
banking in  Virginia is highly  competitive.  Many large  banking organizations,
several of which are controlled by  out-of-state  holding  companies,  currently
operate in the Company's targeted market areas. In addition, competition between
commercial  banks and  thrift  institutions  (savings  institutions  and  credit
unions)  has  intensified  significantly  by the  elimination  of many  previous
distinctions  between  the  various  types  of  financial  institutions  and the
expanded  powers  and  increased  activity  of thrift  institutions  in areas of
banking which  previously had been the sole domain of commercial  banks.  Recent
legislation, together with other regulatory changes by the primary regulators of
the various financial institutions, has resulted in the almost total elimination
of practical  distinctions  between a commercial bank and a thrift  institution.
Consequently,  competition among financial  institutions of all types is largely
unlimited  with respect to legal ability and authority to provide most financial
services.  Furthermore,  as a consequence of legislation recently enacted by the
United States Congress,  out-of-state banks not previously allowed to operate in
Virginia  are  allowed to  commence  operations  and  compete  in the  Company's
targeted market areas. See "Government  Supervision and Regulation -- Interstate
Banking and Branching."                                                         

         Each of the Banks will face  competition  from other banks,  as well as
thrift institutions,  consumer finance companies,  insurance companies and other
institutions in the Banks'  respective  market areas.  Some of these competitors
are not subject to the same degree of regulation  and  restriction  imposed upon
the Banks.  Many of these competitors also have broader  geographic  markets and
substantially  greater  resources  and  lending  limits than the Banks and offer
certain  services  such as trust  banking  that the  Banks are not  expected  to
provide in the near term. In addition,  many of these  competitors have numerous
branch offices  located  throughout the extended  market areas of the Banks that
the  Company  believes  may  provide  these  competitors  with an  advantage  in
geographic  convenience that the Banks do not have at present.  Such competitors
may also be in a  position  to make  more  effective  use of media  advertising,
support services,  and electronic technology than can the Banks. Currently there
are 27 other  commercial  banks,  7 savings  institutions,  and 30 credit unions
operating in the Company's targeted market areas.                               

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Legal Proceedings                                                               

         In the ordinary course of operations,  the Company and the Banks expect
to be parties to various legal proceedings.  At present, there are no pending or
threatened  proceedings  against  the  Company  or any of the  Banks  which,  if
determined adversely,  would have a material effect on the business,  results of
operations, or financial position of the Company or any of the Banks.           

Properties                                                                      

         The Company's  headquarters  and Cardinal Bank's office is at 10641 Lee
Highway,  Fairfax,  Virginia. The premises are held under a 10 year lease, which
began  January  1, 1998.  The  building,  which the  Company  has  substantially
renovated,  is a three-story  brick structure,  containing 9,000 square feet. It
has five teller stations,  one drive-through  window and a walk-up ATM and night
depository.                                                                     

Employees                                                                       

         At May 31, 1998, the Company had 14 full time employees,  none of which
is  represented  by a union or covered  by a  collective  bargaining  agreement.
Management considers employee relations to be good.                             

MANAGEMENT

Directors and Executive Officers of the Company                                 

         Currently,  the Company's Board of Directors includes 11 directors. The
following  sets forth certain  information  regarding  the  Company's  executive
officers  and  directors  as of the  date of this  Prospectus  and for  previous
periods of at least five years. The Company's Articles of Incorporation  provide
for a classified Board of Directors,  so that, as nearly as possible,  one-third
of the  directors  are elected each year to serve  three-year  terms.  Executive
officers  of the  Company  serve at the  discretion  of the  Company's  Board of
Directors.                                                                      

                                                        [Enlarge/Download Table]

                                                                    Director   Term  
        Name          Age           Position                         Since    Expires
        ----          ---           --------                         -----    -------
                                                                                     
Robert M. Barlow       68  Director and Vice Chairman                 1997     2000  
Wayne W. Broadwater    74  Director                                   1997     2001  
Nancy K. Falck         68  Director and Secretary                     1997     1999  
L. Burwell Gunn, Jr.   53  Director, President and Chief Executive    1997     1999  
                           Officer                                                   
Anne B. Hazel          58  Director                                   1997     2000  
Harvey W. Huntzinger   71  Director                                   1997     2001  
Jones V. Isaac         66  Director                                   1997     1999  
Dale B. Peck           52  Director                                   1997     2000  
James D. Russo         51  Director and Treasurer                     1997     2000  
John H. Rust, Jr.      50  Director and Chairman                      1997     2001  
H. Steve Swink, Ph.D.  56  Director                                   1997     1999  

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         Biographical  information for each of the Directors is set forth below.
With the exception of Messrs.  Gunn, Peck and Swink and Mrs.  Hazel,  all of the
Directors were formerly  directors of First Patriot  Bankshares  Corporation,  a
Virginia  corporation  and  the  holding  company  for  Patriot  National  Bank,
headquartered in Reston,  Virginia ("First Patriot").  On August 1, 1997, United
Bankshares, Inc., a West Virginia corporation ("UBS"), acquired First Patriot in
a Merger,  pursuant to which,  among other  things,  each  shareholder  of First
Patriot  received a cash payment for his or her shares and Patriot National Bank
merged into United Bank, a subsidiary of UBS.                                   

         Robert M. Barlow  served as Vice  Chairman of First Patriot and Patriot
National  Bank.  Mr.  Barlow  also served as  Chairman  of the  Director's  Loan
Committee for Patriot  National  Bank.  Mr. Barlow was the founder and principal
shareholder of a group of companies  engaged in construction,  manufacturing and
real estate in northern  Virginia for the past 38 years.  In 1995, he sold these
ventures and is now retired.                                                    

         Wayne W. Broadwater  served as Chairman of the Marketing  Committee for
Patriot National Bank. A retired U.S. Navy Master Chief Petty Officer, he served
as President  and CEO of Shipmates,  Ltd., a chain of tool and equipment  rental
and sales  companies  that he founded in 1972 until its sale in 1997. He is past
President of the National  Capital  Area Rental  Association.  He is involved in
civic organizations such as the Chamber of Commerce,  the American Legion, Fleet
Reserve Association and the Izaak Walton League.                                

         Nancy K. Falck was  Secretary  of First  Patriot and  Patriot  National
Bank.  Ms.  Falck also  served as  Chairman of the  Compensation  Committee  for
Patriot  National  Bank.  She is a former member of the Fairfax  County Board of
Supervisors  (1980-1987) and Fairfax County School Board (1976-1979).  Ms. Falck
worked in  Virginia as a research  bacteriologist  and also spent time as a high
school teacher.  She is active in community affairs and is past President of the
Board of Directors of the Family Respite Center (a day program that helps people
with  Alzheimer's  disease) and is a Commissioner on the Fairfax Area Council on
Aging.  She has  also  served  as past  president  of such  associations  as the
Northern Virginia Mental Health  Association,  the Social Center for Psychiatric
Rehabilitation,  the Washington  Council of Governments and the Junior League of
Northern Virginia. From 1970 to 1978, she served on the Board of Visitors of the
College of William and Mary.                                                    

         L. Burwell Gunn,  Jr. is President and Chief  Executive  Officer of the
Company,  having  recently  completed 25 years of service with Crestar Bank. Mr.
Gunn  has  managed  a wide  variety  of  diverse  commercial  banking  functions
including equipment leasing, trade finance/international banking, special assets
(loan workouts) and lower, middle and upper market commercial functions. He left
Crestar as Executive  Vice  President and  Commercial  Division Head for Greater
Washington  Region. He has served on the Boards of Directors for United Virginia
Leasing Corporation and Crestar Bank, N.A. He is a past Chairman of the Board of
Directors for the Fairfax County Chamber of Commerce and serves on the boards of
many local civic and charitable entities. Mr. Gunn was honorably discharged from
the U.S. Army in 1972 as a Captain.                                             

         Anne B.  Hazel  serves as a  Director  of the  Corcoran  Museum of Art,
Washington,  D.C., the Florida House, Washington,  D.C., the Morikani Museum and
Japanese  Gardens  Foundation,  Delray  Beach,  Florida and the Concert  Hall at
Mizner Park, Boca Raton,  Florida. In addition Mrs. Hazel is active with the UNC
Alumni  Association,  the Boca Raton Historical  Society,  the Junior Leagues of
Boca Raton,  Florida and Washington,  D.C. among many other civic endeavors.  In
the past she has  held  management  positions  with  the Boca  Raton  Historical
Society,  the Boca Raton Community                                              

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Redevelopment  Agency and The Morikani Museum and Japanese  Gardens.  Mrs. Hazel
graduated  from the  University  of North  Carolina with a BA in English and Art
History.                                                                        

         Harvey W.  Huntzinger  served as  Chairman  of the  Strategic  Planning
Committee  for First  Patriot.  He served in the U.S.  Army from 1946 to 1967 in
numerous  command,  staff and management  jobs relative to aviation  operations,
research,   development  and  engineering.  Upon  retirement,  he  joined  TRW's
engineering  department  in support of a  helicopter  research  development  and
prototyping phase. He is a founder of National Systems  Management  Corporation,
which was organized in 1972, and has been President and CEO since 1983.         

         Jones V. Isaac was  Treasurer of First  Patriot.  Mr. Isaac also served
several terms as Chairman of the Audit Committee for Patriot  National Bank. Mr.
Isaac was the Administrator of Finance and  Administration  for the Construction
Specifications  Institute  where he was employed  from 1967 until 1995.  In this
capacity,  Mr. Isaac was  responsible for the financial,  budgetary,  office and
building  administration  of CSI,  as well as the  administration  of its  staff
benefits programs. Currently, Mr. Isaac is President of Isaac Enterprises, Inc.,
a service oriented firm incorporated in the State of Maryland.                  

         Dale B. Peck is a partner with Beers & Cutler,  PLLC,  Certified Public
Accountants.  Prior to joining his present  firm,  Mr. Peck founded and operated
his own practice.  In addition, he has functioned as Chief Financial Officer for
a group of  financial  services  companies  and began  his  career  with  Arthur
Andersen & Co. in 1968.  A graduate  of Old  Dominion  University,  Mr. Peck has
served as Chairman of the Board of Directors for the Fairfax  County  Chamber of
Commerce,  has been an Advisory Board member of George Mason Bank and many civic
and charitable associations.                                                    

         James D. Russo  served a term as  Chairman of the Audit  Committee  for
Patriot  National Bank. Mr. Russo is currently the Senior Vice President,  Chief
Financial Officer and Treasurer of Shire Laboratories,  Inc. ("Shire"),  and has
held these  positions  since May 1994.  Shire,  a  pharmaceutical  research  and
development company, creates and uses its advanced drug delivery technologies to
develop clinically  needed,  cost effective  therapeutic  products suited to the
managed care  market.  Prior to joining  Shire,  Mr. Russo served as Senior Vice
President, Chief Financial Officer and Treasurer of Versar, Inc. in Springfield,
Virginia  from 1992 to 1994.  Mr. Russo was the Senior Vice  President and Chief
Financial Officer of ICF Kaiser International, Inc. from 1986 to 1992. From 1981
to 1986, Mr. Russo was Vice President of Finance and Treasurer and served on the
Board of  Directors  of PRC  Engineering,  Inc.  in New York,  a  subsidiary  of
Planning  Research  Corporation,  where he managed the  international  financial
operations of the consulting engineering firm.                                  

         John H.  Rust,  Jr.  was  Chairman  of the Board of First  Patriot  and
Patriot  National  Bank.  Mr.  Rust also  served as  Chairman  of the  Executive
Committee for First Patriot and Patriot  National Bank. Mr. Rust is currently of
counsel in the law firm of McCandlish  and Lillard.  Mr. Rust is a member of the
Virginia  House of  Delegates,  the former Vice  Chairman of the Virginia  State
Board of  Elections  and a former  President of the Central  Fairfax  Chamber of
Commerce.                                                                       

         H. Steve  Swink,  Ph.D.  is the  President  of the coffee,  vending and
roasting  group  of U.S.  Office  Products  Company,  the  largest  supplier  of
breakroom products in America.  Prior to joining U.S. Office Products, Dr. Swink
served as Vice President and Chief Operating  Officer for Coffee Butler Service,
Inc. headquartered in Alexandria,  Virginia. Under his leadership, Coffee Butler
grew  to  become  one of the  top  three  independently  owned  coffee  products
companies in the nation. Dr. Swink has a distinguished  record of public service
and  currently   serves  on  the  Board  of  Directors  of  the  American       

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Heart   Association/Northern   Virginia   Chapter,   the  Cultural  Alliance  of
Washington,  D.C., The Fairfax Symphony Orchestra, The Fairfax County Chamber of
Commerce (Past Chairman), and the Northern Virginia Community Foundation.  He is
also an active member of the Greater  Washington Board of Trade, and is involved
with a number of other civic and  professional  organizations.  Dr.  Swink holds
Bachelor of Science  and Master of  Education  degrees  from  Mississippi  State
University  and  received  his  Doctorate  of  Philosophy   from  Georgia  State
University.                                                                     

Executive Officers Who Are Not Directors                                        

         Joseph L. Borrelli,  CPA - Mr. Borrelli (age 50) is the Chief Financial
Officer for the Company and  Cardinal  Bank.  Mr.  Borrelli has over 25 years of
accounting and banking  experience  beginning  with Deloitte & Touche  (formerly
Haskins & Sells) conducting  audits of banks and in senior financial  management
positions  with  Citibank,  Perpetual  Savings,  John Hanson Savings and Crestar
Bank.  His most recent  position was with  Crestar Bank as the Regional  Finance
Manager for the greater  Washington  Region.  He is past  President  of the D.C.
Chapter  of  Financial  Executives  Institute  and is a member  of the  American
Institute of CPA's and the Virginia Society of CPA's.                           

         F. Kevin  Reynolds - Mr.  Reynolds (age 38) is Executive Vice President
and Senior Lending Officer of Cardinal Bank and, subject to regulatory approval,
is slated to become the President of Cardinal Bank. Mr. Reynolds has served in a
variety of positions in his 15 years of banking experience beginning as a credit
analyst and commercial trainee at the National Bank of Washington. After leaving
to join  American  Security  Bank he gained  experience in lending to government
contractors, real estate developers, and businesses. In 1991 Mr. Reynolds joined
George  Mason Bank to help create the  commercial  lending  group and became the
senior  lending  officer  responsible  for all facets of the  bank's  commercial
lending business. In addition to his many civic activities,  Mr. Reynolds is the
current  Chairman of the American Heart  Association,  Northern  Virginia and is
Treasurer and Vice President of Westwood Country Club.                          

         Christopher W. Bergstrom - Mr.  Bergstrom (age 38) is an Executive Vice
President  and  Commercial  Lending  Officer  of the  Company  and,  subject  to
regulatory  approval,  is slated to be President of the Manassas/Prince  William
Bank when it opens.  Mr.  Bergstrom will establish a loan  production  office in
Prince William County,  his home. Mr.  Bergstrom had a 16-year career at Crestar
Bank  where he served in a variety of retail and  commercial  functions.  He has
managed several  commercial  lending groups in addition to gaining experience in
sales management,  credit administration,  planning and budgeting, and personnel
recruitment.  In addition, he has served in a variety of civic roles,  including
serving on the Boards of Directors of the Arlington and  Alexandria  Chambers of
Commerce and the Advisory Board of the McIntire School of Commerce's  Center for
Small and Emerging Business.                                                    

         Eleanor  Schmidt - Ms.  Schmidt (age 37) is a Vice President and Retail
Banking  Head of the  Company  with  over 17 years  of  branch  and  operational
experience with  NationsBank.  She has managed multiple  branches in the Fairfax
area serving a large and diverse  deposit and loan base.  She is  experienced in
retail banking, retail operations,  branch security, and consumer compliance and
customer service. She has been a leader in the Fairfax community for the past 15
years in a variety of business and civic  organizations  and currently serves on
the Industrial  Development Authority in the City of Fairfax, is a member of the
Central Fairfax Chamber of Commerce, the Fairfax County Chamber of Commerce, the
Leadership  Fairfax  Class of 1998,  and is  active  with  the  Kiwanis  Club of
Fairfax.  She is the treasurer of the City of Fairfax Chocolate Lover's Festival
Committee and serves on the Fairfax                                             

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City  Independence  Day  Celebration  Committee.  She  has  been  honored  as an
outstanding volunteer in the City of Fairfax for the past two years.            

         Carl E. Dodson - Mr.  Dodson (age 43) joined the Company in May 1998 as
its  Senior  Vice  President  and  Chief  Credit  Officer  and has 14  years  of
commercial  banking  experience.  Mr.  Dodson  began  his  career  as one of the
founding  officers of Palmer  National Bank  ("Palmer") in  Washington,  D.C. At
Palmer, in addition to being the senior commercial  lending officer,  Mr. Dodson
implemented  procedures  involving  the lending  function  of Palmer,  including
establishing  the loan  review,  credit  operations  and  credit  administration
functions.  While at Palmer, he oversaw the growth of its loan portfolio to $100
million before  Palmer's sale to George Mason Bank ("George  Mason") in 1996. At
that  time,  he  joined  George  Mason  as  Senior  Vice   President  of  Credit
Administration.  In 1997, Mr. Dodson left George Mason to become Chief Financial
Officer of C.C. Pace  Resources,  Inc. Mr.  Dodson  received a B.A. in economics
from the  University of Virginia and a M.B.A.  from the University of Virginia's
Darden School of Business Administration.                                       

Security Ownership of Management                                                

         The  following  table  sets  forth  information  as of March  31,  1998
regarding  the  number  of  shares of  Common  Stock  beneficially  owned by all
directors and by all directors  and  executive  officers as a group.  Beneficial
ownership  includes  shares,  if any,  held in the  name  of the  spouse,  minor
children or other relatives of the nominee living in such person's home, as well
as shares,  if any,  held in the name of  another  person  under an  arrangement
whereby the director or  executive  officer can vest title in himself at once or
at some future time.                                                            

                                                                [Download Table]


                                        Common Stock                        
       Name                          Beneficially Owned  Percentage of Class
       ----                          ------------------  -------------------
                                                                            
Robert M. Barlow                           67,500                4.79%      
Wayne W. Broadwater                        27,000                1.92       
Nancy K. Falck                             26,667                1.89       
L. Burwell Gunn, Jr.                       18,500                1.31       
Anne B. Hazel                              13,334                0.95       
Harvey W. Huntzinger                       67,500                4.79       
Jones V. Isaac                             30,000                2.13       
Dale B. Peck                               26,667                1.89       
James D. Russo                             53,600                3.80       
John H. Rust, Jr.                          35,000                2.48       
H. Steve Swink, Ph.D.                      30,000                2.13       
All present executive officers and                                          
  directors as a group (16 persons)       437,101               31.01%      

         The  percentage  ownership  of  directors  and  executive  officers  is
expected to decline to less than 11% following the Offering.                    

Security Ownership of Certain Beneficial Owners                                 

         No one is known to be the beneficial owner of more than five percent of
the issued and outstanding Common Stock of the Company.                         

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Executive Compensation                                                          

         The following table shows, for the fiscal year ended December 31, 1997,
the cash compensation paid by the Company, as well as certain other compensation
paid or accrued for that year, to the named Executive  Officer in all capacities
in which he served:                                                             

Summary Compensation Table

                                                        [Enlarge/Download Table]

                                                 Annual Compensation(1)                        
                                         -------------------------------------                 
                                                                                   All Other   
                                         Year          Salary(2)        Bonus   Compensation(3)
                                         ----          ---------        -----   ---------------

                                                                                               
L. Burwell Gunn, Jr.                     1997           $27,174        $25,000     $    981    
  President and Chief Executive Officer                                                        
----------------                                                                               

(1)  All benefits that might be  considered of a personal  nature did not exceed
     the  lesser of  $50,000  or 10% of total  annual  salary  and bonus for the
officer named in the table.                                           

(2)  Amount reflects a partial year. Mr. Gunn's annual salary is $150,000.      

(3)  Amounts  reflect COBRA  payments to Mr. Gunn's former  employer to continue
insurance benefits.                                                   

Compensation and Other Employment Arrangements                                  

         On September 30, 1997, Mr. Gunn entered into an employment  contract to
serve as President and Chief Executive  Officer of both the Company and Cardinal
Bank and to perform such services and duties as each entity's Board of Directors
may designate. Under the contract, Mr. Gunn is entitled to an annual base salary
of $150,000. Any increases in base salary are at the discretion of the Boards of
Directors. In addition, Mr. Gunn earned a bonus in 1997 of $25,000 in connection
with the completion of various  aspects of the  organization  of the Company and
Cardinal Bank, and may be entitled to up to an additional  $50,000 in connection
with the first year of  operations of the Company and Cardinal  Bank,  and up to
$50,000 per year for future performance.                                        

         The  contract is for a term of three  years and may be extended  for at
least two  additional  years.  Mr. Gunn serves at the pleasure of the  Company's
Board of Directors.  If, during the term of the contract,  Mr. Gunn's employment
is terminated  without cause,  Mr. Gunn will be entitled to a severance  payment
equal to his annual base salary at that time.  The  contract  also  provides for
certain non-competition  covenants for a period of one year following Mr. Gunn's
termination.                                                                    

         During each year under his  three-year  employment  contract,  Mr. Gunn
will be granted an option to purchase  7,048 shares of Common Stock at $7.50 per
share;  however,  the  grant of any  option  for any  particular  year  shall be
conditioned on the Company's financial  performance's  exceeding certain amounts
budgeted for that year.                                                         

         Neither the Company nor Cardinal Bank provides any  compensation to its
directors for service on the respective Board of Directors.                     

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         Any future  transactions  between  the  Company  and its  officers  and
directors,  as well as transactions with any person who acquires five percent or
more of the  Company's  voting  stock will be on  substantially  the same terms,
including interest rates and security for loans, as those prevailing at the time
for comparable transactions with others.                                        

Bank Directors                                                                  

         With the exception of Mrs.  Hazel and Dr.  Swink,  the directors of the
Company also are the  directors of Cardinal  Bank.  The Company  intends that at
least one Company  director will serve on the Board of each Additional Bank. The
Company  has  identified  a  number  of  individuals  who have  indicated  their
willingness  to serve as organizers and directors of the  Additional  Banks.  As
none of the Additional Banks is yet in the organizational stage, the composition
of the Boards of the  Additional  Banks has not been finally  determined  and no
individual may serve as an Additional Bank director without regulatory approval.
The Company expects that the directors of the Additional  Banks will include the
following individuals.                                                          

         George E.  Barlow  (age 41) is  currently  President  and  co-owner  of
Division 7, Inc.  and  Vice-President  and  co-owner  of Prospect  Waterproofing
Company.  Serving  the  construction  industry,  Division 7, Inc. is a materials
distribution company and Prospect Waterproofing Co. is a waterproofing specialty
subcontractor.  Prior to the  purchase of Division 7 and  Prospect in 1994,  Mr.
Barlow was Chief  Executive  Officer of  Insulated  Building  Systems,  Inc.,  a
manufacturer and fabricator of insulation products.  Mr. Barlow is a graduate of
The Wharton  School of the  University of  Pennsylvania  and has an MBA from The
Goizueta Business School of Emory University.                                   

         David  L.  Broadwater  (age  40)  is  managing  partner  of  Broadwater
Investments  II, Real Estate  Development and Management Co. located in northern
Virginia.  Prior to forming  his present  firm,  Mr.  Broadwater  served as Vice
President of Operations of Shipmates,  Ltd. a large  equipment  rental and sales
company headquartered in Manassas, Virginia.                                    

         Russell  A.  DeCarlo,  DDS (age  53),  a  lifetime  area  resident,  is
self-employed  with a private dental practice in northern  Virginia for the past
27 years. After completing  undergraduate studies at the University of Virginia,
Dr. DeCarlo graduated from the Medical College of Virginia in 1969 and completed
military  service in the USN 1969/71.  He was an initial  investor and member of
the Advisory  Board of Patriot  National Bank since its  inception in 1990.  Dr.
DeCarlo has served on several Boards of Directors for  residential  and business
properties,  including  Pinecrest  Office Park and Edsall Terrace in Alexandria,
Virginia and Angelfish Condo in Ocean City, Maryland.                           

         Theresa  A.  Gascoigne  (age 48) is a  graduate  of the  University  of
Maryland with a B.A. in Business  Administration  and the Washington  School for
Secretaries.  She worked for Securities  Investor  Protection  Corporation,  The
American Federation of State, County and Municipal  Employees,  The Construction
Specifications Institute and the Early California Industries. She is a member of
the  Country  Club of Fairfax  and many civic and  charitable  organizations  in
Virginia.                                                                       

         Roy F.  Goggin,  Jr.  (age 53)  established  his own  certified  public
accounting  firm in  1988.  His  accounting  experience  spans  over  25  years.
Specializing in taxation and accounting,  his practice serves a wide spectrum of
small and medium-sized  businesses in northern Virginia. He received his B.S. in
Business  Administration from Virginia  Commonwealth  University and his M.S. in
Taxation from American University in Washington,  D.C. He is active in a variety
of  professional and civic endeavors and is a past President of the Falls Church
Rotary Club.                                                                    

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         Andrew  P.  Hinton  (age  47) is an  attorney  with the  United  States
Government,  and has responsibilities  involving  adjudication of administrative
appeals in an administrative tribunal within the Department of Veterans Affairs.
Previously,  he  worked  for 16 years at the  International  Monetary  Fund (the
"IMF"),  providing  financial  and  economic  expertise  in support of the IMF's
country lending  programs.  Mr. Hinton also has real estate business  experience
since 1973, with  involvement in land  development and brokerage,  redevelopment
and sale of inner-city residential buildings, and financial analytic support for
prospective office building projects. He founded and was President of Washington
Capital Realty,  Inc.,  involved in  non-residential  real estate brokerage.  In
addition to Mr. Hinton's legal training,  he holds an MBA in finance and an M.A.
in economics,  both from Virginia Tech in  Blacksburg,  Virginia.  Mr. Hinton is
active in several northern Virginia community organizations.                    

         Mervin D. Issac (age 34) is currently  Senior  Manager of Operations at
Cable & Wireless,  Inc.  Cable & Wireless  ("C&W") is an industry  leader in the
Global  Telecommunications  industry.  He is  responsible  for all private line,
data, internet and voice operations at C&W. Prior to his management position, he
was a Senior Data Engineer at C&W  responsible  for capacity  planning,  network
architecture,  traffic flow engineering and network resilience design. Mr. Isaac
also served in the United States Navy from  1982-1987 as an aviation  electronic
technician.                                                                     

         Earl F. Lockwood (age 67) is co-founder,  Chairman, President and Chief
Executive  Officer of Betac  International  Corporation which he formed in 1980.
Betac is a  worldwide  technology  firm  located in  Alexandria,  Virginia.  Mr.
Lockwood is a graduate of the College of Engineering, University of Kentucky. He
also attended the International School of Nuclear Science and Engineering at the
University of Chicago.  Mr. Lockwood is a Director of the Professional  Services
Council,  Chairman of the Board of the Securities  Affairs Support  Association,
Senior Advisory Board for the Joint Military  Intelligence  College  Foundation,
Inc. and the Board of Trustees of Hampton-Sydney College.                       

         Virginia  C. Mars (age 68) is a former  teacher  and was a Director  of
Mars  Foundation  until 1990.  For years she has been very active in a number of
civic and  charitable  endeavors.  Mrs. Mars  currently  serves on the Boards of
Vassar  College,  the  Wildlife  Preservation  Trust  International,  the McLean
Revitalization Corporation, The Cathedral Chapter, Washington National Cathedral
and Cathedral  Choral  Society and the National  Symphony  Orchestra,  where she
earned  the  distinction  of being  the only  woman  to serve as  president.  In
addition, she has served on the Boards of the American University, Johns Hopkins
University  American  Contemporary  German  Studies,  and the Langley  School of
McLean, among many others. Mrs. Mars received her B.A. and teacher certification
from Vassar.                                                                    

         John R. Muha,  II (age 40)  graduated  from George Mason  University in
1981 with a Bachelor of Science  degree in Business  Administration.  Mr. Muha's
career in insurance began as a bond underwriter with the Chubb Group. In 1994 he
co-founded Franey, Parr & Muha, Inc., and currently serves as its President. Mr.
Muha is a member  of the  Board of  Directors  and  serves  as the  Underwriting
Chairman for Crab Apple  Insurance  Company and is a member of the  Professional
Insurance  Agents  Association.  He is an  Accredited  Advisor in insurance  and
serves on the  advisory  boards of several  insurance  carriers.  Mr.  Muha is a
member of the George  Mason  University  Patriot  Club,  the Fairfax  Chamber of
Commerce,  the  National  Association  of  Industrial  and Office  Parks and St.
Timothy's Church.                                                               

         Philip M.  Reilly  (age 56) is the Vice  President,  Finance  and Chief
Financial  Officer  of Kol  Bio-Medical  Instruments,  a regional  marketer  and
distributor of high technology  medical  devices.  A former                     

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Marine Corps  Officer and Vietnam  veteran,  he holds an MBA in Finance from the
N.Y.U. Stern School of Business.  He serves on the Executive Committee and Board
of Directors of the Medmarc  Insurance  Company.  Currently the Vice Chairman of
the Virginia Health Care Foundation, he is a past Chairman of the Fairfax County
Chamber of Commerce,  the Fairfax Arts Council,  the Fairfax-Falls Church United
Way and is a past awardee of the Washington Post Cup as Fairfax County's Citizen
of the Year. He also served as Vice Chairman - North of the Virginia  Chamber of
Commerce, and chaired the Virginia Business Health Care Task Force.             

         John A. Rollison,  III (age 47) is President of Rollison Tire and Auto,
a business he has owned and operated  since 1972 in  Woodbridge,  Virginia.  Mr.
Rollison is a member of the House of Delegates representing the 52nd District in
Prince  William  County.  He is a  director  of the  Prince  William  Chamber of
Commerce and an  Alternate  Commissioner  on the  Interstate  Commission  on the
Potomac  River  Basin.  Mr.  Rollison  is a  graduate  of  Virginia  Polytechnic
Institute and State University.                                                 

         Dietmar  S.  Tech  (age 55) is a  founder  and  principal  owner of LSA
Incorporated, which was organized in 1982, and since then has been the President
in charge of  corporate  operations  and head of the LSA  Photonics  and Optical
Wireless Communications Division. LSA provides systems engineering,  acquisition
management, and technical support services to the Government and industry. Prior
to founding LSA, Mr. Tech was a Director of Operations with SYSCON  Incorporated
supporting  various Navy airlaunched  weapon system programs.  From 1966 through
1971 Mr. Tech held various  positions from analyst through  Department Head with
Litton Ingalls  Shipbuilding  Division  supporting  the  development of the LHA,
Spruance Class  Destroyers,  and Surface Effect Ship. From 1962 to 1966 Mr. Tech
worked  for  the  Department  of the  Navy  as an  operations  research  analyst
addressing  logistics  systems design and  effectiveness  issues.  He received a
degree in Physics from Rutgers University in 1964.                              

         William  T.  Theros  (age 48) was the former  owner of McLean  Rentals,
Inc., a major equipment rental dealer in the northern  Virginia region.  He sold
McLean  Rentals,  Inc. in 1996 after growing the firm from one to nine locations
and currently works with his son at Theros  Equipment,  Inc.,  which sells large
construction  equipment.  Previous to his owning McLean Rentals,  Inc., he spent
seven years with the  Montgomery  County Police  Department.  He graduated  from
University  of Maryland with a Bachelor of Science  degree in Criminal  Justice,
then furthered his studies at George  Washington  University,  graduating with a
Masters of Science in Special Studies - Criminal Justice.                       

         Ms. Jana Yeates  (age 56) is the  founder  and  co-owner of  Employment
Enterprises,  Inc., the parent company of Temporary Solutions, Inc. and Checks &
Balances,  Inc.  a  $40+  million  employment  services  enterprise  located  in
Manassas,  Virginia.  Temporary Solutions,  Inc. continually ranks as one of the
Top 50 women-owned businesses in the Washington  metropolitan area, as published
by the Washington  Business  Journal.  Ms. Yeates has received numerous business
awards including being recognized as "Entrepreneur of the Year" by Inc. Magazine
and Ernst & Young, and by being inducted into the "Entrepreneur Hall of Fame" at
the University of North  Carolina.  In addition to serving on numerous state and
local  advisory and civic boards,  she is a past President of the Prince William
County  Greater  Manassas  Chamber  of  Commerce,  and  serves on the  Boards of
Directors of Prince William Health Systems,  Prince William  Hospital Board, and
the Manassas Chapter of the American Red Cross among others.                    

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 GOVERNMENT SUPERVISION AND REGULATION

         The  following  discussion  is a  summary  of the  principal  laws  and
regulations that comprise the regulatory framework applicable to the Company and
the  Banks.  Other  laws and  regulations  that  govern  various  aspects of the
operations  of banks  and  bank  holding  companies  are not  described  herein,
although  violations of such laws and  regulations  could result in  supervisory
enforcement action against the Company or a Bank. The following descriptions, as
well as  descriptions  of  laws  and  regulations  contained  elsewhere  in this
Prospectus,  summarize the material terms of the principal laws and  regulations
and are  qualified  in  their  entirety  by  reference  to  applicable  laws and
regulations.                                                                    

         As a bank holding  company,  the Company is subject to regulation under
the  Bank  Holding  Company  Act of  1956  (as  amended,  the  "BHCA")  and  the
examination and reporting requirements of the Federal Reserve. Under the BHCA, a
bank holding company may not directly or indirectly acquire ownership or control
of more than 5% of the voting shares or  substantially  all of the assets of any
additional  bank or merge or  consolidate  with  another  bank  holding  company
without  the prior  approval  of the Federal  Reserve.  The BHCA also  generally
limits the activities of a bank holding company to that of banking,  managing or
controlling  banks,  or any other  activity which is determined to be so closely
related to banking or to  managing or  controlling  banks that an  exception  is
allowed for those activities.                                                   

         As a national bank, Cardinal Bank is subject to regulation, supervision
and  examination  by the OCC.  The  Additional  Banks  also are  expected  to be
national banks, supervised by the OCC in the same fashion and to the same extent
as Cardinal Bank.  Cardinal Bank is also subject to regulation,  supervision and
examination  by the FDIC.  Federal law also governs the  activities in which the
Banks may engage,  the investments they may make and limits the aggregate amount
of loans that may be  granted to one  borrower  to 15% of a bank's  capital  and
surplus.  Various  consumer and compliance laws and regulations  also affect the
Banks' operations.                                                              

         The earnings of the Banks,  and  therefore the earnings of the Company,
are  affected  by  general  economic  conditions,  management  policies  and the
legislative  and  governmental   actions  of  various  regulatory   authorities,
including those referred to above.                                              

         The OCC will conduct regular examinations of the Banks,  reviewing such
matters as the adequacy of loan loss reserves, quality of loans and investments,
management  practices,   compliance  with  laws,  and  other  aspects  of  their
operations.  In addition to these regular  examinations,  the Banks must furnish
the OCC with periodic  reports  containing a full and accurate  statement of its
affairs. Supervision,  regulation and examination of banks by these agencies are
intended primarily for the protection of depositors rather than shareholders.   

         Insurance of Accounts,  Assessments  and  Regulation  by the FDIC.  The
deposits  of  Cardinal  Bank are  insured by the FDIC up to the limits set forth
under  applicable  law. The deposits of Cardinal Bank are subject to the deposit
insurance  assessments  of the Bank  Insurance  Fund  ("BIF")  of the FDIC.  The
Additional Banks will be subject to the same assessments.                       

         The FDIC has  implemented  a risk-based  deposit  insurance  assessment
system  under which the  assessment  rate for an insured  institutions  may vary
according to  regulatory  capital  levels of the  institution  and other factors
(including supervisory evaluations).  Depository institutions insured by the BIF
that are "well  capitalized",  are  required to pay only the  statutory  minimum
assessment of $2,000 annually for deposit  insurance,  while all other banks are
required to pay premiums ranging from .03%                                      

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to .30% of  domestic  deposits.  These  rate  schedules  are  subject  to future
adjustments  by the FDIC. In addition,  the FDIC has authority to impose special
assessments from time to time. However,  because the legislation enacted in 1996
requires  that both Savings  Association  Insurance  Fund  ("SAIF")  insured and
BIF-insured  deposits  pay a pro  rata  portion  of  the  interest  due  on  the
obligations issued by the Financing Corporation ("FICO"),  the FDIC is assessing
BIF-insured  deposits an  additional  1.30 basis  points per $100 of deposits to
cover those obligations.                                                        

         The FDIC is authorized  to prohibit any  BIF-insured  institution  from
engaging in any activity that the FDIC determines by regulation or order to pose
a serious threat to the respective  insurance fund.  Also, the FDIC may initiate
enforcement actions against banks, after first giving the institution's  primary
regulatory  authority an opportunity to take such action. The FDIC may terminate
the deposit  insurance of any depository  institution if it determines,  after a
hearing,  that the  institution  has engaged or is engaging in unsafe or unsound
practices,  is in an unsafe or unsound condition to continue operations,  or has
violated any  applicable  law,  regulation,  order or any  condition  imposed in
writing by the FDIC. It also may suspend deposit  insurance  temporarily  during
the  hearing  process  for  the  permanent  termination  of  insurance,  if  the
institution has no tangible  capital.  If deposit  insurance is terminated,  the
deposits  at the  institution  at  the  time  of  termination,  less  subsequent
withdrawals,  shall  continue  to be insured for a period from six months to two
years,  as  determined  by  the  FDIC.   Management  is  aware  of  no  existing
circumstances  that could  result in  termination  of  Cardinal  Bank's  deposit
insurance.                                                                      

         Capital.  The OCC and the Federal  Reserve have issued  risk-based  and
leverage capital guidelines  applicable to banking organizations they supervise.
Under the  risk-based  capital  requirements,  the Company and Cardinal Bank are
each  generally  required  to  maintain  a  minimum  ratio of total  capital  to
risk-weighted  assets (including certain  off-balance sheet activities,  such as
standby  letters of  credit) of 8%. At least half of the total  capital is to be
composed of common equity,  retained earnings and qualifying perpetual preferred
stock, less certain intangibles ("Tier 1 capital"). The remainder may consist of
certain   subordinated  debt,  certain  hybrid  capital  instruments  and  other
qualifying  preferred  stock  and a limited  amount  of the loan loss  allowance
("Tier 2 capital" and, together with Tier 1 capital, "total capital").          

         In  addition,  each of the  Federal  banking  regulatory  agencies  has
established   minimum   leverage   capital   ratio   requirements   for  banking
organizations. These requirements provide for a minimum leverage ratio of Tier 1
capital  to  adjusted  average  quarterly  assets  equal to 3% for bank  holding
companies  that are  rated a  composite  "1" and 4% for all other  bank  holding
companies.  Bank holding  companies are expected to maintain higher than minimum
capital ratios if they have  supervisory,  financial,  operational or managerial
weaknesses, or if they are anticipating or experiencing significant growth.     

         The  risk-based  capital  standards of the OCC and the Federal  Reserve
explicitly  identify  concentrations  of credit risk and the risk  arising  from
non-traditional  activities, as well as an institution's ability to manage these
risks, as important  factors to be taken into account by the agency in assessing
an institution's  overall capital adequacy.  The capital guidelines also provide
that an institution's exposure to a decline in the economic value of its capital
due to  changes in  interest  rates be  considered  by the agency as a factor in
evaluating a bank's capital adequacy.  The OCC and the Federal Reserve also have
recently issued  additional  capital  guidelines for bank holding companies that
engage in certain trading activities.                                           

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         Other  Safety  and  Soundness  Regulations.   There  are  a  number  of
obligations  and  restrictions  imposed  on bank  holding  companies  and  their
depository  institution  subsidiaries by Federal law and regulatory  policy that
are  designed  to reduce  potential  loss  exposure  to the  depositors  of such
depository  institutions  and to the  FDIC  insurance  funds  in the  event  the
depository  institution  becomes  in danger of  default  or is in  default.  For
example,  under a policy of the Federal  Reserve  with  respect to bank  holding
company  operations,  a bank holding company is required to serve as a source of
financial  strength  to its  subsidiary  depository  institutions  and to commit
resources to support such institutions in circumstances where it might not do so
otherwise. In addition, the "cross-guarantee"  provisions of Federal law require
insured  depository  institutions under common control to reimburse the FDIC for
any loss  suffered  or  reasonably  anticipated  by the BIF as a  result  of the
default of a  commonly  controlled  insured  depository  institution  or for any
assistance  provided  by the FDIC to a commonly  controlled  insured  depository
institution  in  danger  of  default.  The  FDIC  may  decline  to  enforce  the
cross-guarantee  provision  if it  determines  that  a  waiver  is in  the  best
interests of the BIF. The FDIC's claim for  reimbursement  is superior to claims
of shareholders of the insured depository institution or its holding company but
is  subordinate  to claims of  depositors,  secured  creditors  and  holders  of
subordinated  debt (other than  affiliates) of the commonly  controlled  insured
depository institution.                                                         

         The Federal  banking  agencies  also have broad  powers  under  current
Federal  law to take  prompt  corrective  action to resolve  problems of insured
depository  institutions.  The Federal  Deposit  Insurance Act requires that the
federal banking  agencies  establish five capital levels for insured  depository
institutions - "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly  undercapitalized,"  and "critically  undercapitalized."  It also
requires or permits such agencies to take certain  supervisory actions should an
insured   institution's   capital  level  fall.  For  example,   an  "adequately
capitalized"  institution is restricted  from accepting  brokered  deposits.  An
"undercapitalized" or "significantly  undercapitalized" institution must develop
a  capital  restoration  plan  and is  subject  to a  number  of  mandatory  and
discretionary  supervisory actions. These powers and authorities are in addition
to  the  traditional  powers  of the  Federal  banking  agencies  to  deal  with
undercapitalized institutions.                                                  

         Federal regulatory  authorities also have broad enforcement powers over
the Company and the Banks,  including  the power to impose fines and other civil
and  criminal  penalties,  and to appoint a receiver  in order to  conserve  the
assets  of any  such  institution  for  the  benefit  of  depositors  and  other
creditors.                                                                      

         Payment of  Dividends.  The  Company  is a legal  entity  separate  and
distinct  from the Banks.  Virtually  all of the  revenues of the  Company  will
result from dividends paid to the Company by the Banks.  Under OCC regulations a
national  bank may not  declare a dividend in excess of its  undivided  profits,
which will mean that each Bank must  recover any start-up  losses  before it may
pay a dividend to the Company.  Additionally,  a national bank may not declare a
dividend if the total amount of all dividends,  including the proposed dividend,
declared by the  national  bank in any  calendar  year  exceeds the total of the
national  bank's  retained  net income of that year to date,  combined  with its
retained net income of the two preceding years,  unless the dividend is approved
by the OCC. A national bank may not declare or pay any dividend if, after making
the  dividend,  the  national  bank would be  "undercapitalized,"  as defined in
regulations  of the OCC.  The  Company  is  subject to state laws that limit the
amount of dividends  it can pay. In addition,  the Company is subject to various
general  regulatory  policies  relating to the payment of  dividends,  including
requirements to maintain adequate capital above regulatory minimums. The Federal
Reserve has indicated that banking  organizations should generally pay dividends
only if (1) the organization's net income available to common  shareholders over
the past  year has been  sufficient  to fund  fully  the  dividends  and (2) the
prospective                                                                     

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rate of earnings retention appears  consistent with the  organization's  capital
needs, asset quality and overall financial  condition.  The Company expects that
these laws,  regulations or policies will  materially  impact the ability of the
Banks  and,  therefore,  the  Company  to pay  dividends  in the early  years of
operations.                                                                     

         Community Reinvestment.  The requirements of the Community Reinvestment
Act  ("CRA")  are   applicable  to  the  Bank.  The  CRA  imposes  on  financial
institutions an affirmative  and ongoing  obligation to meet the credit needs of
their  local  communities,  including  low and  moderate  income  neighborhoods,
consistent with the safe and sound operation of those institutions.  A financial
institution's  efforts in meeting community credit needs currently are evaluated
as part of the examination process pursuant to twelve assessment factors.  These
factors also are considered in evaluating mergers, acquisitions and applications
to open a branch or facility.                                                   

         Interstate  Banking  and  Branching.  Current  Federal  law  authorizes
interstate  acquisitions of banks and bank holding companies without  geographic
limitation. Effective June 1, 1997, a bank headquartered in one state is able to
merge  with a bank  headquartered  in another  state,  as long as neither of the
states has opted out of such  interstate  merger  authority  prior to such date.
States are  authorized  to enact laws  permitting  such  interstate  bank merger
transactions  prior to June 1, 1997, as well as  authorizing a bank to establish
"de novo" interstate branches.  Virginia enacted early "opt in" laws, permitting
interstate bank merger  transactions.  Once a bank has established branches in a
state  through an  interstate  merger  transaction,  the bank may  establish and
acquire  additional  branches  at  any  location  in  the  state  where  a  bank
headquartered  in that state could have  established or acquired  branches under
applicable Federal or state law.                                                

         Economic  and  Monetary  Polices.  The  operations  of the  Company are
affected not only by general economic  conditions,  but also by the economic and
monetary policies of various regulatory authorities.  In particular, the Federal
Reserve regulates money, credit and interest rates in order to influence general
economic  conditions.  These  policies have a  significant  influence on overall
growth and  distribution of loans,  investments and deposits and affect interest
rates charged on loans or paid for time and savings  deposits.  Federal  Reserve
monetary  policies  have had a significant  effect on the  operating  results of
commercial  banks in the  past  and are  expected  to  continue  to do so in the
future.                                                                         

DESCRIPTION OF CAPITAL STOCK

         The  following  summary  description  of the  material  features of the
capital  stock of the  Company is  qualified  in its  entirety by  reference  to
applicable  provisions of Virginia law and the Articles of  Incorporation of the
Company (the "Articles") and the Bylaws of the Company (the "Bylaws"), which are
exhibits to the Registration Statement on file with the Commission.             

Authorized and Outstanding Capital Stock                                        

         The  authorized  capital  stock of the Company  consists of  50,000,000
shares of Common  Stock,  par value $1.00 per share,  and  10,000,000  shares of
Preferred Stock, par value $1.00 per share. Immediately following the closing of
the offering, the Company estimates that there will be an aggregate of 4,009,509
shares of Common Stock issued and  outstanding  and no shares of Preferred Stock
issued and  outstanding.  As of March 31, 1998,  there were 1,409,509  shares of
Common Stock issued and outstanding held by approximately 88 holders of record. 

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Common Stock                                                                    

         The holders of Common  Stock are  entitled to one vote per share on all
matters voted on by shareholders,  including elections of directors, and possess
exclusively all voting power except as otherwise  required by law or provided in
any resolution  adopted by the Company's  Board of Directors with respect to any
class or series of Preferred  Stock.  The Articles do not provide for cumulative
voting for the election of directors.  Subject to any preferential rights of any
outstanding class or series of Preferred Stock designated by the Company's Board
of Directors from time to time, the holders of Common Stock are entitled to such
dividends  as may be  declared  from  time  to time by the  Company's  Board  of
Directors from funds available therefore,  and upon liquidation will be entitled
to receive pro rata all assets of the Company available for distribution to such
holders.  The holders of Common Stock have no preemptive  or other  subscription
rights,  and there  are no  conversion  rights or  redemption  or  sinking  fund
provisions with respect to the Common Stock.                                    

Preferred Stock                                                                 

         The Company's Board of Directors is authorized,  without further action
of the  shareholders  of the  Company,  to provide for the issuance of shares of
Preferred  Stock,  in one or more  classes or  series,  and to fix for each such
class or series such  designations,  rights and preferences as are stated in the
resolution  adopted  by the  Company's  Board  of  Directors  providing  for the
issuance  of such  class  or  series  and as are  not  prohibited  by law.  Such
Preferred  Stock shall rank prior to the Common Stock as to dividend  rights and
liquidation preferences.  Preferred Stock may have full or limited voting rights
and may be convertible into shares of Common Stock, which could adversely affect
the voting power of the holders of Common  Stock.  In addition,  the issuance of
Preferred  Stock by the Board of  Directors  could be  utilized,  under  certain
circumstances, as a method of preventing a takeover of the Company. There are no
shares of  Preferred  Stock  outstanding  and the Company has no present plan or
agreement for the issuance of Preferred  Stock,  although it may determine to do
so in the future.                                                               

Certain Provisions of the Company's Articles of Incorporation and Bylaws        

         The  Articles  and  Bylaws  contain  provisions,  in  addition  to  the
authority of the Board of Directors to issue shares of Preferred  Stock  without
shareholder  action, that may have the effect of delaying or preventing a change
in control of the  Company.  The  Articles  and Bylaws  provide,  subject to the
rights of any holders of Preferred  Stock: (i) that the Board of Directors shall
be divided  into  three  classes  and at each  annual  meeting  of  shareholders
thereafter one class shall be elected each year to serve a three-year term; (ii)
that directors may be removed only for cause and only by the affirmative vote of
holders of more than two-thirds of the Company's outstanding voting stock; (iii)
that a vacancy on the Board shall be filled by the remaining directors; and (iv)
that special  meetings of the  shareholders may be called only by the President,
by the Chairman of the Board, or by the Board of Directors and may not be called
by the shareholders.  The Bylaws require advance  notification for a shareholder
to bring  business  before a  shareholders'  meeting or to nominate a person for
election as a director.                                                         

         The Articles  also  require  that any  amendment to the Articles or any
merger  or share  exchange  to which  the  Company  is a party or any  direct or
indirect sale, lease,  exchange or other disposition of all or substantially all
of the  Company's  property,  other  than in the  usual  and  regular  course of
business,  must be approved by the  affirmative  vote of a majority of the votes
entitled to be cast by each voting group  entitled to vote on such  amendment or
transaction;  provided,  however,  that  if such  amendment  or  transaction  is
approved by less than  two-thirds  of the Company's  Directors,  holders of more
than  two-thirds of the issued and  outstanding  shares of the Company's  Common
Stock must vote in favor of such amendment or transaction.                      

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Affiliated Transactions                                                         

         The  Virginia  Stock  Corporation  Act (the  "Virginia  Act")  contains
provisions  governing  "Affiliated   Transactions"  designed  to  deter  certain
coercive two-tier takeovers of Virginia  corporations.  Affiliated  Transactions
include certain mergers and share exchanges,  material dispositions of corporate
assets  not  in  the  ordinary  course  of  business,  any  dissolution  of  the
corporation proposed by or on behalf of an "Interested  Shareholder" (as defined
below), or reclassifications,  including reverse stock splits, recapitalizations
or mergers of the  corporation  with its  subsidiaries  which have the effect of
increasing the percentage of voting shares  beneficially  owned by an Interested
Shareholder  by more than 5%. For purposes of the Virginia  Act, an  "Interested
Shareholder" is defined as any beneficial owner of more than 10% of any class of
the voting securities of a Virginia corporation.                                

         Subject to certain exceptions discussed below, the provisions governing
Affiliated  Transactions  require that, for three years  following the date upon
which any shareholder becomes an Interested Shareholder,  a Virginia corporation
cannot  engage in an Affiliated  Transaction  with such  Interested  Shareholder
unless approved by the  affirmative  vote of the holders of more than two-thirds
of the outstanding  shares of the corporation  entitled to vote,  other than the
shares beneficially owned by the Interested Shareholder,  and by a majority (but
not less than two) of the "Disinterested  Directors." A "Disinterested Director"
means,  with  respect  to a  particular  Interested  Shareholder,  a member of a
corporation's  board of  directors  who (i) was a  member  before  the  later of
January  1,  1988  and the date on which an  Interested  Shareholder  became  an
Interested  Shareholder and (ii) was recommended for election by, or was elected
to fill a vacancy  and  received  the  affirmative  vote of, a  majority  of the
Disinterested  Directors then on the  corporation's  board of directors.  At the
expiration  of the three year  period,  these  provisions  require  approval  of
Affiliated  Transactions  by the  affirmative  vote of the  holders of more than
two-thirds of the outstanding shares of the corporation  entitled to vote, other
than those beneficially owned by the Interested Shareholder.                    

         The principal  exceptions to the special  voting  requirement  apply to
Affiliated  Transactions  occurring after the three-year  period has expired and
require  either  that  the   transaction  be  approved  by  a  majority  of  the
Disinterested  Directors  or that the  transaction  satisfy  certain  fair price
requirements of the statute.  In general,  the fair price  requirements  provide
that the shareholders  must receive the highest per share price for their shares
as was paid by the  Interested  Shareholder  for his  shares or the fair  market
value of their shares,  whichever is higher.  The fair price  requirements  also
require that,  during the three years preceding the announcement of the proposed
Affiliated  Transaction,  all required  dividends  have been paid and no special
financial  accommodations have been accorded the Interested Shareholder,  unless
approved by a majority of the Disinterested Directors.                          

         None of the  foregoing  limitations  and  special  voting  requirements
applies to an Affiliated  Transaction with an Interested Shareholder (i) who was
an Interested  Shareholder on the date the  corporation  first became subject to
the provisions of the Virginia Act governing  Affiliated  Transactions by virtue
of its having 300  shareholders  of record or (ii) whose  acquisition  of shares
making such a person an Interested Shareholder was approved by a majority of the
corporation's Disinterested Directors.                                          

         The  provisions of the Virginia Act governing  Affiliated  Transactions
are  inapplicable  to  transactions  with the Company until the Company has more
than 300  shareholders  of record.  In  addition,  the  Affiliated  Transactions
provisions  provide that, by affirmative vote of a majority of the voting shares
other than shares owned by any Interested Shareholder,  a corporation may adopt,
by  meeting  certain  voting  requirements,  an  amendment  to its  articles  of
incorporation  or bylaws providing                                              

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that the Affiliated  Transactions provisions shall not apply to the corporation.
The Company has not adopted such an amendment.                                  

Control Share Acquisitions                                                      

         The Virginia Act contains provisions  regulating certain "control share
acquisitions,"  which are transactions causing the voting strength of any person
acquiring  beneficial ownership of shares of a public corporation in Virginia to
meet or exceed certain threshold  percentages (20%, 33-1/3% or 50%) of the total
votes  entitled to be cast for the election of directors.  Shares  acquired in a
control share  acquisition  have no voting  rights unless  granted by a majority
vote of all outstanding  shares other than those held by the acquiring person or
any officer or employee  director of the  corporation.  The acquiring person may
require that a special meeting of the shareholders be held to consider the grant
of voting rights to the shares acquired in the control share acquisition. If the
acquiring person's shares are not accorded voting rights (or if no request for a
special meeting is made by an acquiror),  the corporation  may, if authorized by
its charter and bylaws  prior to the control  share  acquisition,  purchase  the
acquiring  person's  shares at their  cost to the  acquiring  person.  If voting
rights are approved and the acquiring  person controls 50% or more of the voting
power, all shareholders  other than the acquiring person have dissenters' rights
which enable them to receive the "fair value" of their  shares.  "Fair value" is
not less than the  highest  price paid in the  control  share  acquisition.  The
provisions  of the  Virginia  Act  relating to control  share  acquisitions  are
inapplicable  to a  corporation  until it has more  than 300  shareholders.  The
Virginia Act permits  corporations  to opt-out of its  provisions  by adopting a
bylaw or charter provision prior to a control share acquisition stating that the
control  share  provisions  of the Virginia Act shall not apply.  The  Company's
Bylaws  contain a provision  opting-out of the control  share  provisions of the
Virginia Act.                                                                   

Liability and Indemnification of Directors and Officers                         

         As permitted by the Virginia Act, the Articles contain provisions which
indemnify  directors and officers of the Company to the full extent permitted by
Virginia law and eliminate the personal  liability of directors and officers for
monetary  damages  to the  Company  or its  shareholders  for  breach  of  their
fiduciary duties,  except to the extent such  indemnification  or elimination of
liability is prohibited by the Virginia  Act.  These  provisions do not limit or
eliminate the rights of the Company or any  shareholder to seek an injunction or
any  other  non-monetary  relief in the  event of a breach  of a  director's  or
officer's  fiduciary duty. In addition,  these  provisions  apply only to claims
against a director  or officer  arising out of his role as a director or officer
and do not relieve a director or officer from liability if he engaged in willful
misconduct  or a knowing  violation  of the criminal law or any federal or state
securities law.                                                                 

         In  addition,  the  Articles  provide for the  indemnification  of both
directors  and  officers for expenses  incurred by them in  connection  with the
defense or settlement  of claims  asserted  against them in their  capacities as
directors and officers.  This right of  indemnification  extends to judgments or
penalties  assessed  against  them.  The Company  has  limited  its  exposure to
liability for indemnification of directors and officers by purchasing  directors
and officers liability insurance coverage.                                      

Transfer Agent and Registrar                                                    

         American  Stock  Transfer & Trust Company will serve as transfer  agent
and registrar for the Common Stock.                                             

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Shares Eligible for Future Sale                                                 

         Upon  consummation  of the  Offering,  the Company will have  4,009,509
shares of Common  Stock  outstanding.  All of the shares  issued in the Offering
(plus any shares  issued upon the exercise of the  Underwriters'  over-allotment
option) will be freely tradeable without  restriction or registration  under the
Securities Act of 1933, as amended (the  "Securities  Act"),  unless owned by an
affiliate of the Company, subject to the lock-up agreements described below. All
shares  issued  prior  to the  Offering,  as well as any  other  shares  held by
"affiliates"  of the  Company  are  subject  to  resale  restrictions  under the
Securities  Act.  An  affiliate  of an issuer is  defined  in Rule 144 under the
Securities  Act as a person  that  directly or  indirectly,  through one or more
intermediaries,  controls, is controlled by, or is under common control with the
issuer. Rule 405 under the Securities Act defines the term "control" to mean the
possession, direct or indirect, of the power to direct or cause the direction of
the  management  and  policies of the person  whether  through the  ownership of
voting  securities,  by contract,  or  otherwise.  All  directors  and executive
officers of the Company will likely be deemed to be affiliates.  See "Management
-- Ownership of the Common  Stock."  Shares held by affiliates and shares issued
prior to the  Offering  may be  eligible  for sale in the  open  market  without
registration in accordance with the provisions of Rule 144. Upon consummation of
the  Offering,  the shares of Common Stock issued prior to the Offering  will be
"restricted securities," within the meaning of Rule 144.                        

         In  general,  under Rule 144 any person (or  persons  whose  shares are
aggregated) who has beneficially  owned  restricted  securities for at least one
year, including affiliates,  and any affiliate who holds shares sold in a public
offering,  may sell, within any three-month period, a number of such shares that
does not exceed  the  greater  of (i) 1% of the then  outstanding  shares of the
Common  Stock or (ii) the  average  weekly  trading  volume of the Common  Stock
during the four calendar weeks  preceding the sale.  Rule 144 also requires that
the  securities  must be sold in  "brokers'  transactions,"  as  defined  in the
Securities  Act, and the person selling the securities may not solicit orders or
make any  payment  in  connection  with the offer or sale of  securities  to any
person  other  than the broker who  executes  the order to sell the  securities.
After  restricted  securities are held for two years, a person who is not deemed
an  affiliate  of the Company is  entitled  to sell such  shares  under Rule 144
without  regard to the volume and manner of sale  limitations  described  above.
Sales of shares by  affiliates  will  continue  to be  subject to the volume and
manner of sale limitations.                                                     

         No prediction  can be made of the effect,  if any, that future sales of
shares of Common Stock,  or the  availability  of shares for future sales,  will
have on the market  price  prevailing  from time to time.  Sales of  substantial
amounts of shares of Common  Stock,  or the  perception  that such  sales  could
occur, could adversely affect the prevailing market price of the shares.        

UNDERWRITING

         Subject  to the  terms and  conditions  contained  in the  Underwriting
Agreement,  the underwriters named below (the "Underwriters"),  for whom Scott &
Stringfellow,  Inc., is acting as representative  (the  "Representative"),  have
severally  agreed to purchase  from the  Company,  and the Company has agreed to
sell to the Underwriters  named below, the respective number of shares of Common
Stock set forth opposite each Underwriter's name below:                         

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         Underwriter                                            Number of Shares

Scott & Stringfellow, Inc............................              1,300,000    
Interstate/Johnson Lane Corporation..................                650,000    
Ferris, Baker Watts Incorporated.....................                650,000    
                                                               ---------
Total.............................................              2,600,000 
                                                               =========

         The Underwriting Agreement provides that the obligations of the several
Underwriters  thereunder  are subject to approval  of certain  legal  matters by
counsel  and to  various  other  conditions.  The  nature  of the  Underwriters'
obligations  is such that they are  committed to purchase and pay for all of the
shares of Common Stock if any are purchased.                                    

         The  Underwriters  propose to offer the Common  Stock  directly  to the
public  at the  public  offering  price  set  forth  on the  cover  page of this
Prospectus and to certain securities dealers at such price less a concession not
in excess of $0.42 per share.  The  Underwriters  may allow,  and such  selected
dealers may reallow,  a  concession  not in excess of $0.10 per share to certain
brokers  and  dealers.  After the  offering,  the price to  public,  concession,
allowance and reallowance may be changed by the Representative. The Underwriters
have agreed that they will not sell  shares of Common  Stock in the  Offering to
any one  purchaser  if such  purchaser  would  beneficially  own more  than five
percent of the issued and outstanding shares of Common Stock after the Offering.

         The  Company  has granted to the  Underwriters  an option,  exercisable
during the 30-day  period after the date of this  Prospectus,  to purchase up to
390,000 additional shares of Common Stock to cover  over-allotments,  if any, at
the  same  price  per  share  as  the  initial  shares  to be  purchased  by the
Underwriters  from the Company.  To the extent the  Underwriters  exercise  this
option,  each  of  the  Underwriters  will  be  committed,  subject  to  certain
conditions,  to  purchase  such  additional  shares  in  approximately  the same
proportion as set forth in the above table.  The  Underwriters may purchase such
shares  only to  cover  over-allotments,  if any,  made in  connection  with the
Offering.                                                                       

         The executive  officers and directors of the Company,  have agreed that
they will not offer,  sell,  contract  to sell or grant an option to purchase or
otherwise  dispose of any shares of the Common  Stock,  options or  warrants  to
acquire shares of Common Stock or any securities  exercisable for or convertible
into Common Stock owned by them or acquired in the Offering,  in the open market
or otherwise, for a period of 90 days from the date of this Prospectus,  without
the prior written consent of the Underwriters.                                  

         The Company has agreed to indemnify the  Underwriters  against  certain
liabilities or to contribute to payments that the  Underwriters  may be required
to make in respect thereof.                                                     

         Prior to the  Offering,  there has been no market for the Common Stock.
The Common Stock has been  approved for listing on The Nasdaq  SmallCap  Market;
however,  there can be no assurance that an active trading market for the Common
Stock will develop or be  sustained.  See "Market for Common  Stock." The public
offering price for the Common Stock was  determined by  negotiation  between the
Company and the Underwriters.  Among the factors considered in such negotiations
are the  prospects  for the Company and the  industry in which it  competes,  an
assessment of the Company's management,  its proposed operations,  the prospects
for  future  earnings  of the  Company,  the  present  state  of  the  Company's
development,  the general condition of the securities markets at the time of the
Offering,  the demand for the Common Stock,  and the market prices of and demand
for the publicly-traded  common stock of comparable companies in recent periods.
The  Underwriters  intend  to  make a  market  in  the  Common  Stock  following
completion of the Offering.                                                     

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         In  order  to  facilitate  the  Offering  of  the  Common  Stock,   the
Underwriters  may engage in transactions  that stabilize,  maintain or otherwise
affect  the  price of the  Common  Stock.  Specifically,  the  Underwriters  may
overallot  in  connection  with the  Offering  creating a short  position in the
Common Stock for its own account.  In addition,  to cover  overallotments  or to
stabilize  the price of the Common  Stock,  the  Underwriters  may bid for,  and
purchase,  shares of Common Stock in the open market.  Finally, the Underwriters
may reclaim selling  concessions allowed to a dealer for distributing the Common
Stock in the Offering,  if the Underwriters  repurchase  previously  distributed
Common  Stock  in  transactions  to  cover  short  positions,  in  stabilization
transactions or otherwise. Any of these activities may stabilize or maintain the
market  price  of  the  Common  Stock  above  independent   market  levels.  The
Underwriters are not required to engage in these activities,  and may end any of
these activities at any time.                                                   

LEGAL OPINIONS

         Certain  legal  matters in  connection  with the Common  Stock  offered
hereby are being  passed upon for the Company by  Williams,  Mullen  Christian &
Dobbins, P.C., Richmond,  Virginia. Certain legal matters in connection with the
Offering  are  being  passed  upon  for the  Underwriters  by  LeClair  Ryan,  A
Professional Corporation, Richmond, Virginia.                                   

 EXPERTS

         The balance sheets of the Company as of March 31, 1998 and December 31,
1997 and the statements of operations,  shareholders'  equity, and cash flows of
the Company  for the period  from  January 1, 1998 to March 31, 1998 and for the
period from November 24, 1997 (date of inception) to December 31, 1997 have been
included in this  Prospectus in reliance on the report of KPMG Peat Marwick LLP,
independent  accountants,  upon  the  authority  of  said  firm  as  experts  in
accounting and auditing.                                                        

 AVAILABLE INFORMATION

         The Company has filed with the United  States  Securities  and Exchange
Commission  (the  "Commission")  a  Registration  Statement  on Form  SB-2  (the
"Registration  Statement")  under the  Securities Act with respect to the Common
Stock offered hereby.  For further  information  with respect to the Company and
the  Common  Stock  offered  by  this  Prospectus,  reference  is  made  to  the
Registration   Statement  and  the  exhibits  filed  as  a  part  thereof.   The
Registration  Statement,  including exhibits, may be inspected without charge at
the public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street,  N.W.,  Washington,  D.C. 20549,  and at its regional  offices
located at CitiCorp  Center,  500 West  Madison  Street,  Suite  1400,  Chicago,
Illinois 60661 and 7 World Trade Center,  13th Floor,  New York, New York 10048.
Copies of all or part of the  Registration  Statement  may be obtained  from the
Commission's principal office in Washington, D.C. upon payment of the prescribed
fees. Statements contained in this Prospectus as to the contents of any contract
or  other  documents  referred  to are  not  necessarily  complete,  and in each
instance  reference is made to the copy of the contract or other  document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.                                              

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         Prior  to the  Offering,  the  Company  has  not  been  subject  to the
informational  requirements  of the Securities  Exchange Act of 1934, as amended
(the  "Exchange   Act"),  and  accordingly  has  not  filed  reports  and  other
information  pursuant thereto with the Commission.  As a result of the Offering,
however,  the Company will become subject to the  informational  requirements of
the  Exchange Act and will  furnish the reports and other  information  required
thereby to the  Commission.  The Company also will furnish annual reports to its
shareholders  containing audited financial statements of the Company, as well as
quarterly reports containing unaudited financial information.                   

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CARDINAL FINANCIAL CORPORATION

INDEX TO FINANCIAL STATEMENTS 

MARCH 31, 1998 AND DECEMBER 31, 1997

                                                        [Enlarge/Download Table]

                                                                                                                                 
                                                                                                                             Page

Independent Auditors' Report................................................................................................ F-2 
Balance Sheet as of march 31, 1998 and December 31, 1997.................................................................... F-3 
Statements of Operations for the period ended January 1, 1998 to March 31, 1998 and the period from November                     
  24, 1997 (date of inception) to December 31, 1997......................................................................... F-4 
Statements of Shareholders' Equity for the period ended January 1, 1998 to March 31, 1998 and the period from                    
  November 24, 1997 (date of inception) to December 31, 1997................................................................ F-5 
Statements of Cash Flows for the period ended January 1, 1998 to March 31, 1998 and the period from November                     
  24, 1997 (date of Inception) to December 31, 1997......................................................................... F-6 
Notes to Financial Statements............................................................................................... F-7 


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Independent Auditors' Report

The Board of Directors                                                          
Cardinal Financial Corporation:                                                 

We  have  audited  the  accompanying   balance  sheets  of  Cardinal   Financial
Corporation  (the  Company) as of March 31, 1998 and December 31, 1997,  and the
related statements of operations,  shareholders'  equity, and cash flows for the
period from  January 1, 1998 to March 31, 1998 and for the period from  November
24, 1997 (date of inception) to December 31, 1997.  These  financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an  opinion  on these  consolidated  financial  statements  based on our
audits.                                                                         

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.          

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Cardinal Financial Corporation
as of March 31, 1998 and December 31,  1997,  and the results of its  operations
and its cash flows for the period from January 1, 1998 to March 31, 1998 and for
the period from  November 24, 1997 (date of  inception) to December 31, 1997, in
conformity with generally accepted accounting principles.                       

KPMG Peat Marwick LLP                                                           

Washington, DC                                                                  
April 29, 1998                                                                  

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CARDINAL FINANCIAL CORPORATION

Balance Sheets

March 31, 1998 and December 31, 1997

                                                        [Enlarge/Download Table]


---------------------------------------------------------------------------------------------------------------------

                                                                                   March 31,            December 31, 
Assets                                                                                  1998                    1997 
---------------------------------------------------------------------------------------------------------------------

                                                                                                                     
Cash and cash equivalents                                                $         9,676,049               4,283,454 
Subscriptions receivable (note 2)                                                    202,132               4,509,652 
Property and equipment, net (note 3)                                                 279,700                       - 
Other assets                                                                           3,440                   2,740 
---------------------------------------------------------------------------------------------------------------------

Total Assets                                                             $        10,161,321               8,795,846 
---------------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity                                                                                 
---------------------------------------------------------------------------------------------------------------------

Liabilities:                                                                                                         
     Borrowings (note 4)                                                 $                 -                 185,000 
     Accounts payable and accrued expenses                                            36,458                  59,591 
---------------------------------------------------------------------------------------------------------------------

Total Liabilities                                                                     36,458                 244,591 
---------------------------------------------------------------------------------------------------------------------

Shareholders' Equity                                                                                                 
     Common stock, $1 par value, 50,000,000 shares authorized,                                                       
         1,409,509 and 1,174,988 outstanding at March 31, 1998                                                       
         and December 31, 1997, respectively                                       1,409,509               1,174,988 
     Uncollected subscriptions receivable                                            (99,977)                (99,977)
     Additional paid in capital                                                    9,145,809               7,621,422 
     Accumulated deficit                                                            (330,478)               (145,178)
---------------------------------------------------------------------------------------------------------------------

Total Shareholders' Equity                                                        10,124,863               8,551,255 
---------------------------------------------------------------------------------------------------------------------

Total Liabilities and Shareholders' Equity                              $         10,161,321               8,795,846 
---------------------------------------------------------------------------------------------------------------------

See accompanying notes to financial statements. 

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CARDINAL FINANCIAL CORPORATION

Statements of Operations

For the period ended January 1, 1998 to March 31, 1998 and the period from
November 24, 1997 (date of inception) to December 31, 1997

                                                        [Enlarge/Download Table]


--------------------------------------------------------------------------------------------------------------- 

                                                                                   March 31,       December 31, 
                                                                                        1998              1997  
--------------------------------------------------------------------------------------------------------------- 

                                                                                                                
Income - Interest Income                                                  $          101,236              7,041 
Expense - Interest on Borrowing                                                        1,616              2,724 
--------------------------------------------------------------------------------------------------------------- 

Net Interest Income                                                                   99,620              4,317 

Other expenses:                                                                                                 
     Salary and benefits                                                             120,289             66,918 
     Occupancy                                                                        58,497             42,500 
     Professional fees                                                                61,461             18,142 
     Other operating expenses                                                         44,673             21,935 
--------------------------------------------------------------------------------------------------------------- 

Total Expenses                                                                       284,920            149,495 
--------------------------------------------------------------------------------------------------------------- 

Net loss before income taxes                                                        (185,300)          (145,178)
Provision for income taxes (note 6)                                                        -                  - 
--------------------------------------------------------------------------------------------------------------- 

Net Loss                                                                  $         (185,300)          (145,178)
--------------------------------------------------------------------------------------------------------------- 

Basic and diluted loss per common share                                                (0.14)             (0.12)

Weighted-average shares outstanding                                                1,370,422          1,174,988 
--------------------------------------------------------------------------------------------------------------- 

See accompanying notes to financial statements. 

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CARDINAL FINANCIAL CORPORATION

Statements of Shareholders' Equity

For the period ended January 1, 1998 to March 31, 1998 and the period from
November 24, 1997 (date of inception) to December 31, 1997

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------

                                                               Common      Additional                   Uncollected                 
                                                                Stock         Paid-in     Accumulated  Subscription                 
                                                           Subscribed         Capital        Deficit     Receivable           Total 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
Balance, November 24, 1997                           $              -               -              -             -                - 

Issuance of 1,174,988 shares of common stock                                                                                        
     par value $1, at $7.50 per share, net of costs         1,174,988       7,621,422              -       (99,977)       8,696,433 
Net loss                                                            -               -       (145,178)            -         (145,178)
------------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 1997                                  1,174,988       7,621,422       (145,178)      (99,977)       8,551,255 

Issuance of 234,521 shares of common stock par                                                                                      
     value $1, at $7.50 per share, net of costs               234,521       1,524,387              -             -        1,758,908 
Net loss                                                            -               -       (185,300)            -         (185,300)
------------------------------------------------------------------------------------------------------------------------------------

Balance, March 31, 1998                              $      1,409,509       9,145,809       (330,478)      (99,977)      10,124,863 
------------------------------------------------------------------------------------------------------------------------------------

See accompanying notes to financial statements. 

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CARDINAL FINANCIAL CORPORATION

Statements of Cash Flows

For the period ended January 1, 1998 to March 31, 1998 and the period from
November 24, 1997 (date of inception) to December 31, 1997

                                                        [Enlarge/Download Table]


--------------------------------------------------------------------------------------------------------------------

                                                                                  March 31,            December 31, 
                                                                                       1998                    1997 
--------------------------------------------------------------------------------------------------------------------
                                                                                                                    
Cash Flows From Operating Activities:                                                                               
     Net loss                                                            $         (185,300)               (145,178)
     Adjustments to reconcile net loss to net cash operating activities:                                            
              Depreciation                                                            2,500                       - 
              Increase in other assets                                                 (700)                 (2,740)
              Increase (decrease) in accounts payable and                                                           
                  accrued expenses                                                  (23,133)                 59,591 
--------------------------------------------------------------------------------------------------------------------

              Net Cash Used In Operating Activities                                (206,633)                (88,327)
--------------------------------------------------------------------------------------------------------------------

Cash Flows From Investing Activities - Purchase of Fixed Assets                    (282,200)                      - 
--------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:                                                                               
     Proceeds from stock issuance, net                                            1,758,908               8,696,433 
     Decrease (increase) in subscription receivables                              4,307,520              (4,509,652)
     (Repayment) proceeds of borrowings                                            (185,000)                185,000 
--------------------------------------------------------------------------------------------------------------------

     Net Cash Provided By Financing Activities                                    5,881,428               4,371,781 
--------------------------------------------------------------------------------------------------------------------

Net Increase In Cash And Cash Equivalents                                         5,392,595               4,283,454 

Cash And Cash Equivalents At Beginning Of Period                                  4,283,454                       - 
--------------------------------------------------------------------------------------------------------------------

Cash And Cash Equivalents At End Of Period                               $        9,676,049               4,283,454 
--------------------------------------------------------------------------------------------------------------------

See accompanying notes to financial statements. 

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CARDINAL FINANCIAL CORPORATION

Notes to Financial Statements 

March 31, 1998 and December 31, 1997

(1)   Organization and Summary of Significant Accounting Policies         

Organization                                                  

         Cardinal   Financial   Corporation  (the  "Company")  was  incorporated
         November 24, 1997 under the laws of the  Commonwealth  of Virginia as a
         holding company whose activities will consist of investment in a wholly
         owned  subsidiary,  Cardinal Bank,  National  Association  (the "Bank")
         which was  established in April 1998. In connection  with the formation
         of the Company, 50,000,000 shares of $1 par value stock were authorized
         and 1,409,509 and 1,174,988  were  outstanding as of March 31, 1998 and
December 31, 1997, respectively.                              

Basis of Financial Statement Presentation                     

         The financial statements have been prepared on the accrual basis and in
         conformity with generally accepted accounting principles.  In preparing
         the financial statements,  management is required to make estimates and
         assumptions  that affect the reported amounts of assets and liabilities
         as of the date of the balance  sheet and  revenues and expenses for the
         period. Actual results could differ significantly from those estimates.

Cash and Cash Equivalents                                     

         For purposes of reporting cash flows,  the Company has defined cash and
         cash  equivalents  as those amounts  included in a money market account
and due from banks.                                           

Property and Equipment                                        

         Property  and   equipment   are  stated  at  cost,   less   accumulated
         depreciation and amortization.  Amortization of leasehold  improvements
         is computed using the straight-line method over the useful lives of the
         improvements or the lease term,  whichever is shorter.  Depreciation of
         property and equipment is computed using the straight-line  method over
their estimated useful lives ranging from 3 to 7 years.       

Income Taxes                                                  

         Deferred tax assets and liabilities are reflected at currently  enacted
         income tax rates  applicable  to the period in which the  deferred  tax
         assets or  liabilities  are  expected to be  realized  or  settled.  As
         changes  in tax laws or rates are  enacted,  deferred  tax  assets  and
  liabilities are adjusted through the provision for income taxes.

                                                                     (Continued)

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CARDINAL FINANCIAL CORPORATION                                                  

Notes to Financial Statements                                                   

=============================================================================== 

(1)   Continued                                                           

Earnings Per Share                                            

         In 1997, the Financial  Accounting  Standards Board issued Statement of
         Financial Accounting Standards (SFAS) No. 128, Earnings per Share. SFAS
         No. 128 replaced the calculation of primary and fully-diluted  earnings
         per share with basic and diluted earnings per share.  Basic and diluted
         loss per common share was computed by dividing net loss by the weighted
         average  number  of  shares  of common  stock  outstanding  during  the
         periods.  There were no common stock  equivalents  outstanding at March
31, 1998 and December 31, 1997, respectively.                 

New Accounting Standards                                      

         On January  1, 1998 the  Company  implemented  Statement  of  Financial
         Accounting  Standards  No.  130  (SFAS  130),  Reporting  Comprehensive
         Income. The disclosures required under SFAS 130 have been excluded from
         the   financial   statements   since  the   Company  had  no  items  of
Comprehensive income at March 31, 1998.                       

         In April 1998, the American  Institute of Certified Public  Accountants
         issued  Statement of Position 98-5,  Reporting on the Costs of Start-Up
         Activities  (SOP 98-5).  SOP 98-5 requires that costs  incurred  during
         start-up  activities,  including  organization  costs,  be  expensed as
         incurred.  SOP 98-5 is effective  for financial  statements  for fiscal
         years  beginning  after  December 15, 1998, but the Company has elected
early adoption.                                               

(2)   Subscription Receivable                                             

         Subscription  receivable  represent stock  subscribed for which payment
         has yet to be received.  Subscription  receivable  of $202,132 at March
         31, 1998 and $4,509,652 at December 31, 1997 were collected as of April
29, 1998.                                                     

(3)   Property and Equipment, Net                                         

     Property and equipment at March 31, 1998 consists of the following:

         Furniture and equipment                                    $    128,795
         Leasehold improvements                                          153,405
         -----------------------------------------------------------------------

                                                                         282,200

         Accumulated depreciation                                          2,500
         -----------------------------------------------------------------------

                                                                    $    279,700
         -----------------------------------------------------------------------

                                                                     (Continued)

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CARDINAL FINANCIAL CORPORATION                                                  

Notes to Financial Statements                                                   

=============================================================================== 

(4)   Borrowings                                                          

         The Company  borrowed  $185,000 from related  parties in order to begin
         operations.  The interest rate on the  borrowings  is 8.5 percent.  The
      Company repaid the borrowings plus accrued interest in January 1998.

(5)   Commitments                                                         

         The  Company  entered  into a lease for office  space for a term of ten
         years  beginning   January  1998.  This  lease  is  subject  to  annual
         increases,  as well as  allocations  of real  estate  taxes and certain
operating expenses.                                           

         Minimum future rental payments under the noncancelable  operating lease
are as follows:                                               

                                                    Amount
     -------------------------------------------------------

    April 1, 1998 to December 31, 1998        $     33,452
    1999                                            86,130
    2000                                           106,457
    2001                                           109,650
    2002                                           112,933
    Thereafter                                     617,463
     -------------------------------------------------------

                                              $  1,066,085
     -------------------------------------------------------

         The rent  expense for the three months ended March 31, 1998 was $16,726
and $0 for the period ended December 31, 1997.                

(6)   Provision for Income Taxes                                          

The provision for income taxes consists of the following:     

                                      March 31, 1998         December 31, 1997
         -----------------------------------------------------------------------

     Current                      $             -                      -
     Deferred                                   -                      -
         -----------------------------------------------------------------------

                                  $             -                      -
         -----------------------------------------------------------------------

                                                                     (Continued)

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CARDINAL FINANCIAL CORPORATION                                                  

Notes to Financial Statements                                                   

=============================================================================== 

(6)   Continued                                                           

         The provisions  for income taxes are reconciled to the amount  computed
         by  applying  the  federal  corporate  tax rate of 34 percent to income
before taxes as follows:                                      

                                                        [Enlarge/Download Table]


                                                      March 31, 1998         December 31, 1997
----------------------------------------------------------------------------------------------

                                                                                              
Income tax (benefit) at federal corporate rate      $          (63,002)               (40,861)
Nondeductible expenses                                             171                  1,947 
Change in valuation allowance                                   62,831                 38,914 
----------------------------------------------------------------------------------------------

                                                    $                -                      - 
----------------------------------------------------------------------------------------------

         The  tax  effects  of  temporary   differences  between  the  financial
         reporting basis and income tax basis of assets and  liabilities  relate
to the following:                                             

                                                        [Enlarge/Download Table]


                                                      March 31, 1998        December 31, 1997 
----------------------------------------------------------------------------------------------
                                                                                              
Deferred tax assets:                                                                          
     Organization and other costs                   $           13,829                 14,570 
     Net operating loss carryforwards                           89,521                 24,344 
----------------------------------------------------------------------------------------------

Total gross deferred assets                                    103,350                 38,914 

Less valuation allowance                                      (101,745)               (38,914)
----------------------------------------------------------------------------------------------

Net deferred tax assets                                          1,605                      - 

Deferred tax liabilities:                                                                     
     Depreciation                                                1,605                      - 
----------------------------------------------------------------------------------------------

Total gross deferred tax liabilities                             1,605                      - 
----------------------------------------------------------------------------------------------

Net deferred tax asset                                               -                      - 
----------------------------------------------------------------------------------------------

         Deferred income taxes reflect temporary  differences in the recognition
         of revenue and  expenses  for tax  reporting  and  financial  statement
         purposes,  principally  because certain items, such as depreciation and
         amortization   are  recognized  in  different   periods  for  financial
         reporting and tax return purposes.  A valuation allowance in the amount
         of  $101,745  has  been   established  for  deferred  tax  assets,   as
 realization is dependent upon generating future taxable income.

         The Company has a net  operating  loss  carryforward  of  approximately
$263,000 at March 31, 1998.                                   

================================================================================

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                                                        [Enlarge/Download Table]

                                                                                                
===============================================  ===============================================

No dealer,  salesman or other  person has been                                                  
authorized to give any  information or to make                                                  
any   representation  not  contained  in  this                                                  
Prospectus,   and  if  given  or  made,   such                                                  
information  or  representation  must  not  be                                                  
relied upon as having been  authorized  by the                                                  
Company.  This  Prospectus does not constitute                   2,600,000 Shares               
an offer to sell or a solicitation of an offer                                                  
to  buy  any   securities   other  than  those                                                  
specifically  offered  hereby  or an  offer or                                                  
solicitation in any jurisdiction to any person        [CARDINAL FINANCIAL CORPORATION LOGO]     
to whom it is  unlawful  to make an  offer  or                                                  
solicitation.  Neither  the  delivery  of this                                                  
Prospectus nor any sale made hereunder  shall,                                                  
under   any    circumstances,    create    any                     Common Stock                 
implication  that  there has been no change in                                                  
the  affairs  of the  Company  since  the date                                                  
hereof  or  that  the  information  herein  is                                                  
correct as of any time  subsequent to its date                                                  
or the date hereof.                                                                             

              ______________________                                                            

                 Table of Contents                              __________________              
                                          Page                                                  
                                                                    PROSPECTUS                  
Prospectus Summary...........................3                  __________________              
Summary Financial Data.......................6                                                  
Risk Factors.................................6                                                  
Use of Proceeds.............................10                                                  
Market for Common Stock.....................11                                                  
Dividend Policy.............................11                                                  
Dilution....................................11                                                  
Capitalization..............................12              Scott & Stringfellow, Inc.          
Management's Discussion and Analysis of                                                         
   Financial Condition and Results of                                                           
   Operations...............................13               Interstate/Johnson Lane            
Business....................................14                    Corporation                   
Management..................................26                                                  
Government Supervision and Regulation.......35                                                  
Description of Capital Stock................38                 Ferris, Baker Watts              
Underwriting................................42                     Incorporated                 
Legal Opinions..............................44                                                  
Experts.....................................44                                                  
Available Information.......................44                                                  
Index to Financial Statements..............F-1                     July 17, 1998                

Until  August 11, 1998, all  dealers effecting                                                  
transactions  in the Common Stock,  whether or                                                  
not participating in this distribution, may be                                                  
required to deliver a  Prospectus.  This is in                                                  
addition  to  the  obligation  of  dealers  to                                                  
deliver   a   Prospectus    when   acting   as                                                  
Underwriter  and with  respect to their unsold                                                  
allotments or subscriptions.                                                                    

===============================================  ===============================================

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B1’ Filing		Date		First		Last			Other Filings
		3/31/99		15					10KSB40,  10QSB
		12/31/98		55					10KSB40,  10KSB40/A
		12/15/98		54
		8/11/98		57
		7/22/98		2
Filed on:		7/20/98
		7/17/98		2		57
		6/8/98		5		21
		5/31/98		27
		5/4/98		14
		4/29/98		48		54
		4/1/98		55
		3/31/98		7		56
		1/1/98		27		54
		12/31/97		14		56
		11/24/97		45		53
		9/30/97		32
		8/1/97		28
		6/30/97		4		20
		6/1/97		39
		1/1/97		4		15
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