CARDINAL FINANCIAL CORP, SB-2, 1998-05-08

CARDINAL FINANCIAL CORP
SB-2, 1998-05-08

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As filed with the Securities and Exchange Commission on May 8, 1998.
Registration No.
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------

CARDINAL FINANCIAL CORPORATION
(Name of small business issuer in its charter)
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<S> <C> <C>
Virginia 6021 54-1874630
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
10641 Lee Highway
Fairfax, Virginia 22030
(703) 934-9200
(Address and telephone number of registrant's principal executive offices
and principal place of business)

L. Burwell Gunn, Jr.
President
Cardinal Financial Corporation
10641 Lee Highway
Fairfax, Virginia 22030
(703) 934-9200
(Name, address and telephone number of agent for service)

Copies of Communications to:

Wayne A. Whitham, Jr., Esquire George P. Whitley, Esquire
R. Brian Ball, Esquire LeClair Ryan
Williams, Mullen, Christian & Dobbins 707 E. Main Street, 11th Floor
1021 East Cary Street, 16th Floor Richmond, Virginia 23219
Richmond, Virginia 23219

Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ____________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] ____________
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] ____________
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
=============================== ==================== =========================== ============================= ====================
Title of Each Class of Amount to be Proposed Maximum Offering Proposed Maximum Amount of
Securities to be Registered Registered(1) Price Per Share(2) Aggregate Offering Price(2) Registration Fee
- ------------------------------- -------------------- --------------------------- ----------------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $1.00 2,990,000 Shares $11.00 $32,890,000 $9,735
=============================== ==================== =========================== ============================= ====================
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(1) Includes 390,000 shares which the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee.

The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.

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

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.

<PAGE>

SUBJECT TO COMPLETION, DATED JUNE __, 1998

[LOGO appears here]

2,600,000 Shares

CARDINAL FINANCIAL CORPORATION
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 " ."

It is anticipated that the public offering price for the Common Stock
will be in the range of $____ to $____ per share. See "Underwriting" for the
factors considered in determining the public offering price.

See "RISK FACTORS" beginning on page ____ 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.
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================================= ========================= ======================== =========================
Underwriting Proceeds to
Price to Public Discount (1) Company (2)
<S> <C> <C> <C>
Per Share.................... $ $ $
Total (3).................... $ $ $
================================= ========================= ======================== =========================
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(1) The Company has agreed to indemnify the Underwriters against certain
civil liabilities, including liabilities under the Securities Act of
1933. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $_____.
(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 $___,
$____ and $____, 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 thereof or on or about
__________, 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 June ___, 1998

<PAGE>

(Map appears here)

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 NATIONAL MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SEE
"UNDERWRITING."

IN CONNECTION WITH THIS, THE UNDERWRITERS AND SELLING GROUP MEMBERS MAY
ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ
NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M. 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 involve risks
and uncertainties. The Company's actual results may 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 discussed in "Risk
Factors."

The Company
General

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 de novo
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 the state of
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.

The Company will utilize a community banking approach that emphasizes
responsive and personalized service to its customers. Management's expansion
strategy includes attracting strong 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 strong 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
strong corporate, technological and marketing support to its subsidiary 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 with June 30, 1997 deposits exceeding
$972 million have been acquired. 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 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 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 an unusual 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 to pay organizational and other pre-opening expenses, and
proceeds totaling $8.0 million were used to capitalize Cardinal Bank which

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opened on June __, 1998. The Company intends to use the proceeds of this
Offering to open three additional community banks in de novo fashion by
capitalizing such banks and seeking local deposits to fund loan growth. The
Company plans to establish the de novo banks in the Manassas/Prince William
County market, the Reston/Loudoun County market and the Alexandria/Arlington
County market (the "Additional Banks" and with Cardinal Bank, collectively, the
"Banks"). 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 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 for cash 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 four other
executive officers has 15 or more years of banking experience in northern
Virginia. See "Management". The Company's five executive officers have a
combined 100 years of banking experience.

Strategy of the Company

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

Expand the Company's market share in central Fairfax County market through
Cardinal Bank;
The Company has identified experienced senior management and members of the
boards of directors for the Additional Banks;
As soon as practicable following the Offering, 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.

4
<PAGE>

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.

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 traditional de novo fashion 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 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. Each Bank will operate
in a distinct northern Virginia market. 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 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

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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 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, 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.

The Offering
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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................................." "
</TABLE>
(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 within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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. 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 Bank 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

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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."

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
as representatives (the "Representatives") of 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 be
substantial in the near term as a result of the expenses associated with the
opening of 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 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, 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. 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 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."

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Dilution. Purchasers of Common Stock in the Offering will experience
immediate dilution in the net tangible book value per share of the Common Stock
from the public offering price. 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 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 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 Bank's interest income
on interest-earning assets and the Bank's 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; Management Ownership. 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. The provisions include
staggered terms for the Board of Directors. 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. 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

9
<PAGE>

Common Stock, although such individual's percentage ownership is expected to
decline to less than __% following the Offering. Therefore, 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"

Government Regulation. The banking industry is subject to extensive
governmental supervision, regulation and control, which has materially affected
the business of the Company and other 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 $24.1 million
($27.8 million if the Underwriters' over-allotment option is exercised in full),
based upon an assumed public offering price of $10.00 per share and 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
advance 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 officers 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 advanced to the Company by Cardinal Bank.

MARKET FOR COMMON STOCK

The Common Stock has been approved for listing on The Nasdaq SmallCap
Market under the symbol "___," 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 are 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 -- Dividends."

10
<PAGE>

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 an
assumed 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 $34.24
million, or $8.54 per share. This represents an immediate increase in net
tangible book value of $1.36 per share to existing shareholders and an immediate
dilution of $1.46 per share to new investors. The following table illustrates
this per share dilution:
<TABLE>
<CAPTION>
<S> <C>
Assumed 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................. 1.36
----
Pro forma net tangible book value per share after the Offering... 8.54
Dilution per share to new investors.............................. 1.46
------
$10.00
======
</TABLE>
Assuming the Underwriters' over-allotment option is exercised in full,
pro forma net tangible book value upon completion of the Offering would be $8.61
per share, the immediate increase in pro forma net tangible book value of shares
to existing shareholders would be $1.43 per share, and the immediate dilution to
new investors would be $1.39 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 an assumed public offering price of $10.00
per share.
<TABLE>
<CAPTION>
Average
Price Per
Shares Purchased (1) Total Consideration Share
--------------------------- ------------------------------- ------------------
Number Percent Amount Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
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% $36,571,000 100%
========= ===== =========== =====
</TABLE>
___________________

(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 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.

11
<PAGE>

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
$___ per share and the application of the net proceeds therefrom as set forth
under "Use of Proceeds."
<TABLE>
<CAPTION>

March 31, 1998 (1)
--------------------------------------
Actual As Adjusted
(In Thousands)
<S> <C> <C>
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
Accumulated deficit................................ (330,478) (330,478)
----------- ----------
Total shareholders' equity......................... $10,124,863 $
=========== ==========
- ----------------------
</TABLE>
(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.

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. 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 on June __, 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 compliant or are in the process of modifying, upgrading or
replacing their computer applications to ensure Year 2000 compliance. Because
the Company is new, all its data processing equipment is new and is Year 2000
compliant. The Company does not expect to incur any 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 compliant 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

12
<PAGE>

Year 2000 compliant 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 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 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 do not successfully and timely achieve Year 2000 compliance,
however, the Company's business, results of operations or financial condition
could be adversely affected.

BUSINESS
General

13
<PAGE>

community banks in de novo fashion by capitalizing such banks and seeking local
deposits to fund loan growth. The Company plans to establish the de novo banks
in the Manassas/Prince William County market, the Reston/Loudoun County market
and the Alexandria/Arlington County market (the "Additional Banks" and with
Cardinal Bank, collectively, the "Banks"). 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 may be influenced by a variety of factors, including the
availability of suitable sites and the receipt of regulatory approvals.

Strategy of the Company

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

The Company has identified experienced senior management and members of the
boards of directors for the Additional Banks;

As soon as practicable following the Offering, 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.

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

14
<PAGE>

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.

Growth Strategy

15
<PAGE>

opportunities to attract experienced bank managers who would like to join an
institution promoting a community banking concept.

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.

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. Fairfax County is located in
the northeastern corner of Virginia and is in close proximity to Washington,
D.C. 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) Reston and Herndon (both
in Western Fairfax County), together with Loudoun County; and, the City of
Alexandria and Arlington County. Collectively, these markets represent the
highest median household income in Virginia with an average of $61,759 for 1997,
which is 53.6% higher than the State median of $40,219. In addition, the
population of the targeted market place represents approximately 24.7% 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 19___.

16
<PAGE>

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 had a population of 943,171
in 1997 which represents an 11.3% increase from 847,784 in 1990 and a 50.7%
increase from 625,806 in 1980. Fairfax County ranks number ___ in Virginia with
a median household income of $66,607 for 1997 which was 65.6% higher than the
State median of $40,219 and represented growth of 23.8% since 1990. Fairfax
County had $11.2 billion of total commercial bank and thrift deposits with 62.1%
concentrated with the top four financial institutions. Bank and thrift deposits
in Fairfax County increased by 11.2% from $10.1 billion at June 30, 1993 to
$11.2 billion at June 30, 1997. The County has over 75 million square feet of
office space, another 35 million square feet of industrial/hybrid space and,
when viewed as a single market, represents the sixth largest office space market
in the country.

Prince William County and City of Manassas

The Prince William County market includes the city of Manassas. Prince
William County had a population of 294,391 in 1997 which represents a 17.6%
increase from 250,377 in 1990 and a 76.6% increase from 166,665 in 1980. Prince
William County ranks number ___ in Virginia with a median household income of
$51,144 for 1997 which was 27.2% higher than the State median of $40,219 and
represented growth of 16.7% since 1990. As of June 30, 1997, Prince William
County had $1.4 billion of total commercial bank and thrift deposits with 69.7%
concentrated with the top four banking institutions. The County 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), Lockeed Martin, Prince William Hospital, GTE and Giant Food.

Arlington County and City of Alexandria

The Arlington County market includes the city of Alexandria,
Springfield and the Newington/Lorton area. Arlington County had a population of
294,264 in 1997 which represents a 4.3% increase from 282,079 in 1990 and a
15.0% increase from in 1980. Arlington County ranks number ___ in Virginia with
a median household income of $70,050 for 1997 which was 74.2% higher than the
State median of $40,219 and represented growth of 30.1% since 1990. As of June
30, 1997, Arlington County had $5.1 billion of total deposits with 65.5%
concentrated with the top four banking institutions. The Arlington County
market's employment is well-distributed between the public and private sector.
Significant public sector employers in the market include the U.S. Department of
Defense, the City of Alexandria, 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 the cities of 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 represents a
49.4% increase from 86,129 in 1990 and a 124.1% increase since 1980. Loudoun
County ranks number ___ in Virginia with a median household income of $58,938
for 1997 which was 46.5% higher than the State median of $40,219 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. Deposits in Loudoun County increased from $0.7 billion or an
annual growth rate of 11.5% since June 30, 1993.

17
<PAGE>

The Banks

The Company intends to open the Additional Banks in traditional de novo
fashion, 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 need 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 only expect from the largest 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 P.C.

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 market 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

18
<PAGE>

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. The Company intends to offer a wide range of short to long-term
commercial and consumer loans.

Commercial. The Company expects that its 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. In making these loans,
the Company intends to manage its credit risk by actively monitoring such
measures as advance rate, cash flow, collateral value and other appropriate
credit factors.

Residential Mortgage. The Company expects that its real estate
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. 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. Management
expects that these loan-to-value ratios will be sufficient to compensate for
fluctuations in the real estate market to minimize the risk of loss. Mortgage
loans that do not conform to the Company's asset/liability mix policies will be
sold in the secondary markets.

Consumer Loans. The Company expects that its consumer loans
will consist primarily of installment loans to individuals for personal, family
and household purposes. In evaluating these 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 which 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 equality standards.

Credit Administration. The Company will oversee all 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 policy and procedures for the organization. In addition, he
will work closely with each lending officer at the Banks to ensure that the
business being solicited is of the quality and structure that fits the Company's
desired risk profile. Credit qualify will be controlled through uniform
compliance to credit policy. The Company's risk-decision process will be
actively managed in a disciplined fashion to maintain an acceptable risk profile
characterized by

19
<PAGE>

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.

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.

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 and most financial
institutions in the state have branch networks. Consequently, commercial banking
in Virginia is highly competitive. Many large banking organizations currently
operate in the respective market areas of the Banks, several of which are
controlled by out-of-state ownership. In addition, competition between
commercial banks and thrift institutions (savings institutions and credit
unions) has been 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

20
<PAGE>

operate in Virginia are allowed to commence operations and compete in the Banks'
primary service areas. See "Government Supervision and Regulation -- Interstate
Banking and Branching."

Each of the Banks will face competition from other banks, as well as
credit unions, 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 Banks' primary service area.

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 proceeding 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 March 31, 1998 the Company had eight 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. 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.

21
<PAGE>

Director Term
Name Age Position Since Expires
---- --- -------- ----- -------
<S> <C> <C> <C> <C>
Robert M. Barlow 68 Director and Vice Chairman 1997 2000
Wayne W. Broadwater 74 Director 1997 1998
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 1998
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 1998
H. Steve Swink, Ph.D. 56 Director 1997 1999
</TABLE>

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

22
<PAGE>

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 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. Huntziner 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 19___. 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 Bankshares Corporation 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. - Dr. Swink 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 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 George State University.

23
<PAGE>

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 Executors 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 CC.

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

24
<PAGE>

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.
<TABLE>
<CAPTION>
Common Stock
Name Beneficially Owned Percentage of Class
---- ------------------ -------------------
<S> <C> <C>
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 (15 persons) 437,101 31.01%
</TABLE>

The percentage ownership of directors and executive officers is
expected to decline to less than __% 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

Executive Compensation

Summary of Cash and Certain Other 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:
<TABLE>
<CAPTION>
Summary Compensation Table

Annual Compensation(1)
---------------------------------
All Other
Year Salary(2) Bonus Compensation(3)
---- --------- ----- ---------------
<S> <C> <C> <C> <C>
L. Burwell Gunn, Jr. 1997 $27,174 $25,000 $ 981
President and Chief Executive Officer
- ----------------
</TABLE>

(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.

25
<PAGE>

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 the 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 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. 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.

Bank Directors

With the exception of Mrs. Hazel and Mr. 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) Mr. Barlow 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) Mr. Broadwater 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 (SIPC), The American
Federal of State, County and Municipal Employees, The Construction

26
<PAGE>

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) Mr. Goggin 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 size 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 as is a Past President of the Falls Church
Rotary Club.

Andrew P. Hinton - (age 47) Mr. Hinton 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 sixteen years at the International Monetary Fund
(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 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

27
<PAGE>

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
corporation 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.

GOVERNMENT SUPERVISION AND REGULATION

Supervision and Regulation

The discussion below is only a summary of the principal laws and
regulations that comprise the regulatory framework applicable to the Company and
the Banks. The descriptions of these laws and regulations, as well as
descriptions of laws and regulations contained elsewhere herein, do not purport
to be complete 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

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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. The 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 the aggregate amount of
loans that may be granted to one borrower. 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 following description summarizes some of
the laws to which the Company and the Banks are subject.

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 Bank 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.

For the semi-annual period beginning January 1, 1998, the assessments
imposed on all FDIC deposits for deposit insurance have an effective rate
ranging from 0 to __ basis points per $100 of insured deposits, depending on the
institution's capital position and other supervisory factors. 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").

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<PAGE>

In addition, each of the Federal bank regulatory agencies have
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 banks and bank
holding companies that meet certain specified criteria. All other banks and bank
holding companies will generally be required to maintain a leverage ratio of at
least 100 to 200 basis points above the stated minimum.

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 has
recently issued additional capital guidelines for bank holding companies that
engage in certain trading activities.

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 or both. 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 extent of these powers depends upon whether the
institution in question is well-capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized or critically undercapitalized,
as defined by the law.

Federal regulatory authorities also have broad enforcement powers over
the Bank, 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. The Company also is
subject to state laws that limit the amount of dividends it can pay. In
addition, both the Company and the Bank are subject to various general
regulatory policies relating to the payment of dividends, including requirements
to maintain adequate capital above regulatory minimums. The Federal Reserve
Board 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 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 Bank's 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

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<PAGE>

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 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 has 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 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.

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

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<PAGE>

prohibited by law. Such Preferred Stock may rank prior to the Common Stock as to
dividend rights, liquidation preferences or both, may have full or limited
voting rights and may be convertible into shares 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 which 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;
(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.

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,

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<PAGE>

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 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. In certain cases, 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.

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<PAGE>

Transfer Agent and Registrar

___________________________ will serve as transfer agent and registrar
for the Common Stock.

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, 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
Company's 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 three 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.

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<PAGE>

UNDERWRITING

Subject to the terms and conditions contained in the Underwriting
Agreement, the underwriters named below (the "Underwriters"), for whom Scott &
Stringfellow, Inc., Interstate/Johnson Lane Corporation and Ferris, Baker Watts
Incorporated are acting as representatives (the "Representatives"), 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:

Underwriter Number of Shares
----------- ----------------

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

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 Stockif 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 $ per share. The Underwriters may allow, and such selected dealers
may reallow, a concession not in excess of $ per share to certain brokers and
dealers. After the offering, the price to public, concession, allowance and
reallowance may be changed by the Representatives.

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 this
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 this 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 will be determined by negotiation between
the Company and the Underwriters. Among the factors that will be 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.

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

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<PAGE>

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.

The Underwriters and dealers may engage in passive market making
transactions in the Common Stock in accordance with Rule 103 of Regulation M
promulgated by the Securities and Exchange Commission. In general, a passive
market maker may not bid for, or purchase, the Common Stock at a price that
exceeds the highest independent bid. In addition, the net daily purchases made
by any passive market maker generally may not exceed 30% of its average daily
trading volume in the Common Stock during a specified two month prior period, or
200 shares, whichever is greater. A passive market maker must identify passive
market making bids as such on the Nasdaq electronic inter-dealer reporting
system. Passive market making may stabilize or maintain the market price of the
Common Stock above independent market levels. The Underwriters and dealers are
not required to engage in passive market making and may end passive market
making 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 of 1933, as amended, 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 in 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.

Prior to this 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.

36
<PAGE>

CARDINAL FINANCIAL CORPORATION

Financial Statements

March 31, 1998 and December 31, 1997

(With Independent Auditors' Report Thereon)

<PAGE>

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.

/s/ KPMG Peat Marwick LLP

Washington, DC
April 29, 1998

<PAGE>

CARDINAL FINANCIAL CORPORATION

Balance Sheets

March 31, 1998 and December 31, 1997
<TABLE>
<CAPTION>

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

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

<S> <C> <C>
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
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.

2
<PAGE>

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

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

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

<S> <C> <C>
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
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.

3
<PAGE>

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

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------

Common Additional Uncollected
stock paid-in Accumulated subscription
subscribed capital deficit receivable Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.

4
<PAGE>

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

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

March 31, December 31,
1998 1997
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (185,300) (145,178)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation 2,500 -
Decrease (increase) in subscription receivables 4,307,520 (4,509,652)
Increase in other assets (700) (2,740)
Increase (decrease) in accounts payable and
accrued expenses (23,133) 59,591
- --------------------------------------------------------------------------------------------------------------------

Net cash provided by (used in) operating activities 4,100,887 (4,597,979)
- --------------------------------------------------------------------------------------------------------------------

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
Borrowings - 185,000
Repayment of borrowings (185,000) -
- --------------------------------------------------------------------------------------------------------------------

Net cash provided by financing activities 1,573,908 8,881,433
- --------------------------------------------------------------------------------------------------------------------

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
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.

5
<PAGE>

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)

6
<PAGE>

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)

7
<PAGE>

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)

8
<PAGE>

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:

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

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

$ - -
----------------------------------------------------------------------------------------------
</TABLE>

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

March 31, 1998 December 31, 1997
----------------------------------------------------------------------------------------------
<S> <C> <C>
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 - -
----------------------------------------------------------------------------------------------
</TABLE>

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.

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

9
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
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
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.......................7
Risk Factors.................................7
Use of Proceeds.............................10
Market for Common Stock.....................10
Dividend Policy.............................10
Dilution....................................11
Capitalization..............................12 SCOTT & STRINGFELLOW, INC.
Management's Discussion and Analysis of
Financial Condition and Results of
Operations...............................12 INTERSTATE/JOHNSON LANE
Business....................................13 CORPORATION
Management..................................21
Government Supervision and Regulation.......28 FERRIS, BAKER WATTS
Description of Capital Stock................31 INCORPORATED
Underwriting................................35
Legal Opinions..............................36 ____________________
Experts.....................................36
Available Information.......................36
June , 1998
______________________

Until , 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.
</TABLE>
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers

Article 10 of Chapter 9 of Title 13.1 of the Code of Virginia permits a
Virginia corporation to indemnify any director or officer for reasonable
expenses incurred in any legal proceeding in advance of final disposition of the
proceeding, if the director or officer furnishes the corporation a written
statement of his good faith belief that he has met the standard of conduct
prescribed by the Code, and a determination is made by the board of directors
that such standard has been met. In a proceeding by or in the right of the
corporation, no indemnification shall be made in respect of any matter as to
which an officer or director is adjudged to be liable to the corporation, unless
the court in which the proceeding took place determines that, despite such
liability, such person is reasonably entitled to indemnification in view of all
the relevant circumstances. In any other proceeding, no indemnification shall be
made if the director or officer is adjudged liable to the corporation on the
basis that personal benefit was improperly received by him. Corporations are
given the power to make any other or further indemnity, including advance of
expenses, to any director or officer that may be authorized by the articles of
incorporation or any bylaw made by the shareholder, or any resolution adopted,
before or after the event, by the shareholders, except an indemnity against
willful misconduct or a knowing violation of the criminal law. Unless limited by
its articles of incorporation, indemnification of a director or officer is
mandatory when he entirely prevails in the defense of any proceeding to which he
is a party because he is or was a director or officer.

The Articles of Incorporation of the undersigned Registrant contain
provisions indemnifying the directors and officers of the Registrant to the full
extent permitted by Virginia law. In addition, the Articles of Incorporation
eliminate the personal liability of the Registrant's directors and officers to
the Registrant or its shareholders for monetary damages to the full extent
permitted by Virginia law.

Item 25. Other Expenses of Issuance and Distribution
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee.............................................. $9,735 *
National Association of Securities Dealers Examination Fee........................................$3,789 *
NASDAQ SmallCap Market Listing Fee................................................................$9,400 *
Printing Expenses.................................................................................$_____ **
Accounting Fees and Expenses......................................................................$_____ **
Legal Fees and Expenses...........................................................................$_____ **
Blue Sky Fees and Expenses........................................................................$_____ **
Miscellaneous Expenses............................................................................$_____ **

Total.............................................................................................$_____ **
</TABLE>
- ---------------
* Represents actual expenses. All other expenses are estimates.
** To be furnished by amendment.

II-1
<PAGE>

Item 26. Recent Sales of Unregistered Securities

The Company has sold unregistered securities within the past three (3)
years as follows:

1997-1998 (1st quarter); Common Stock, $1.00 par value; 1,409,509 shares sold to
82 investors at an offering price of $7.50 per share; no underwriter; private
placement relying upon Section 4(2) of the Securities Act of 1933, as amended,
and the applicable regulations promulgated thereunder.

Item 27. Exhibits

The following exhibits are filed on behalf of the Registrant as part of
this Registration Statement:

Exhibit No. Description
- ----------- -----------

1 Form of Underwriting Agreement *
3.1 Articles of Incorporation
3.2 Bylaws
4 Form of Stock Certificate *
5 Opinion of Williams, Mullen, Christian & Dobbins, P.C. *
10 Employment Contract for L. Burwell Gunn, Jr.
21 List of Subsidiaries
23.1 Consent of Williams, Mullen, Christian & Dobbins,
P.C.(included in Exhibit 5 above) *
23.2 Consent of KPMG Peat Marwick LLP
24 Powers of Attorney (included on signature page)
27 Financial Data Schedule

_______________________________
* To be filed by amendment.

Item 28. Undertakings

The small business issuer will provide to the underwriter at the
closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933, (the "Securities Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small

II-2
<PAGE>

business issuer in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the small business issuer will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The undersigned small business issuer hereby undertakes that it will:

(1) For determining any liability under the Securities Act, treat
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the small business issuer under Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this Registration Statement as of the
time the Commission declared it effective.

(2) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the Registration Statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.

II-3

<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant, Cardinal Financial Corporation, certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form SB-2
and authorized this Registration Statement to be signed on its behalf by the
undersigned, in the City of Fairfax, Commonwealth of Virginia, on May 1, 1998.

CARDINAL FINANCIAL CORPORATION

By: /s/ L. Burwell Gunn
-------------------------------------
L. Burwell Gunn
President and Chief Executive Officer

POWER OF ATTORNEY

Each of the undersigned hereby appoints L. Burwell Gunn, as attorney
and agent for the undersigned, with full power of substitution, for and in the
name, place and stead of the undersigned, in any and all capacities, to sign and
file with the Securities and Exchange Commission under the Securities Act of
1933, as amended, any and all amendments and exhibits to this registration
statement and any and all applications, instruments and other documents to be
filed with the Securities and Exchange Commission pertaining to the registration
of securities covered hereby with full power and authority to do and perform any
and all acts and things whatsoever requisite or desirable.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

<PAGE>

<TABLE>
<CAPTION>
Signature Title Date

<S> <C> <C>
/s/ L. Burwell Gunn President, Chief Executive Officer
- ---------------------------------------- and Director May 1, 1998
L. Burwell Gunn (Principal Executive Officer)

/s/ Joseph L. Borrelli (Principal Financial Officer and May 1, 1998
- ---------------------------------------- Principal Accounting Officer)
Joseph L. Borrelli

/s/ Robert M. Barlow Director May 4, 1998
- ----------------------------------------
Robert M. Barlow

/s/ Wayne W. Broadwater Director May 4, 1998
- ----------------------------------------
Wayne W. Broadwater

/s/ Nancy K. Falck Director May 4, 1998
- ----------------------------------------
Nancy K. Falck

/s/ Anne B. Hazel Director May 1, 1998
- ----------------------------------------
Anne B. Hazel

/s/ Harvey W. Huntzinger Director May 4, 1998
- ----------------------------------------
Harvey W. Huntzinger

/s/ Jones V. Isaac Director May 2, 1998
- ----------------------------------------
Jones V. Isaac

/s/ Dale B. Peck Director May 2, 1998
- ----------------------------------------
Dale B. Peck

/s/ James D. Russo Director May 2, 1998
- ----------------------------------------
James D. Russo

/s/ John H. Rust, Jr. Director May 1, 1998
- ----------------------------------------
John H. Rust, Jr.

/s/ H. Steve Swink Director May 3, 1998
- ----------------------------------------
H. Steve Swink
</TABLE>

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1 Form of Underwriting Agreement *
3.1 Articles of Incorporation
3.2 Bylaws
4 Form of Stock Certificate *
5 Opinion of Williams, Mullen, Christian & Dobbins, P.C. *
10 Employment Contract for L. Burwell Gunn, Jr.
21 List of Subsidiaries
23.1 Consent of Williams, Mullen, Christian & Dobbins,
P.C.(included in Exhibit 5 above) *
23.2 Consent of KPMG Peat Marwick LLP
24 Powers of Attorney (included on signature page)
27 Financial Data Schedule
</TABLE>

- --------------------------
* To be filed by amendment.

Exhibit 3.1

ARTICLES OF INCORPORATION
of
CARDINAL FINANCIAL CORPORATION

The undersigned does hereby establish a stock corporation under and by
virtue of the provisions of the Virginia Stock Corporation Act, Chapter 9, Title
13.1, of the 1950 Code of Virginia and acts amendatory thereof, for the purposes
and under the corporate name hereinafter mentioned, and to that end, does, by
these Articles of Incorporation, set forth the following:

ARTICLE I

The name of the Corporation is Cardinal Financial Corporation.

ARTICLE II

The nature of the business and the purposes to be conducted and
promoted by the Corporation, that shall be in addition to the authority of the
Corporation to engage in any lawful act or activity for which corporations may
be organized under the Virginia Stock Corporation Act and acts amendatory
thereof, are to buy or otherwise acquire, own, manage, and sell, or otherwise
dispose of shares of capital stock and other securities of banks and other
corporations. In addition, the Corporation shall have the power to transact,
promote or carry on any business of any character that is not prohibited by law
or required to be stated in the articles.

The foregoing provisions of this Article II shall be construed both as
purposes and powers and each as an independent purpose and power. The foregoing
enumeration of specific purposes and powers shall not be held to limit or
restrict in any manner the purposes and powers of the Corporation, and the
purposes and powers herein specified shall, except when otherwise provided in
this Article, be in no wise limited or restricted by reference to, or inference
from, the terms of any provision of this or any other Article in these articles
of incorporation; provided that the Corporation shall not conduct any business,
promote any purpose, or exercise any power or privilege within the Commonwealth
of Virginia that, under the laws thereof, the Corporation may not lawfully
conduct, promote or exercise.

ARTICLE III

The address of the registered office of the Corporation shall be 11350
Random Hills Road, Fifth Floor, Post Office Box 460, in the County of Fairfax,
Virginia 22030, and the name of the initial registered agent for the Corporation
shall be John H. Rust, Jr., a member of the Virginia State Bar and a resident of
Virginia, and whose address is 11350 Random Hills Road, Fifth Floor, Post Office
Box 460, Fairfax, Virginia 22030.

ARTICLE IV

The Corporation shall have authority to issue 50,000,000 shares of
common stock of $1.00 par value per share and 10,000,000 shares of preferred
stock of $1.00 par value per share.

-1-
<PAGE>

Common Stock. The holders of common stock shall, to the exclusion of
the holders of any other class of stock of the Corporation, have the sole and
full power to vote for the election of directors and for all other purposes
without limitation except only (i) as otherwise provided in the certificate of
serial designation for a particular series of preferred stock, and (ii) as
otherwise expressly provided by the then existing statutes of the Commonwealth
of Virginia. The holders of common stock shall have one vote for each share of
common stock held by them.

Subject to the provisions of the certificate of serial designation for
series of preferred stock, the holders of common stock shall be entitled to
receive dividends, if, when and as declared therefor and to the net assets
remaining after payment of all liabilities upon voluntary or involuntary
liquidation of the Corporation.

Preferred Stock. Authority is expressly vested in the Board of
Directors to divide the preferred stock into series and, within the following,
limitations, to fix and determine the relative rights and preferences of the
shares of any series so established and to provide for the issuance thereof.
Each series shall be so designated as to distinguish the shares thereof from the
shares of all other series and classes. All shares of preferred stock shall be
identical except as to the following, relative rights and preferences, as to
which there may be variations between different series:

(a) The rate of dividend, the time of payment and the dates from
which dividends shall be cumulative, and the extent of participation rights, if
any.

(b) Any right to vote with the holders of shares of any other
series or class and any right to vote as a class, either generally or as a
condition to specified corporate action.

(d) The amount payable upon shares in event of involuntary
liquidation.

(e) The amount payable upon shares in event of voluntary
liquidation.

(f) Sinking fund provisions for the redemption or purchase of
shares.

(g) The terms and conditions on which shares may be converted, if
the shares of any series are issued with the privilege of conversion.

Prior to the issuance of any shares of a series of preferred stock, the
Board of Directors shall establish such series by adopting a resolution setting
forth the designation and number of shares of the series and the relative rights
and preferences thereof to the extent that the variations are permitted by the
provisions hereof.

All series of preferred stock shall rank on a parity as to dividends
and assets with all other series according to the respective dividend rates and
amounts distributable upon any voluntary or involuntary liquidation of the

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<PAGE>

Corporation fixed for each such series and without preference or priority of any
series over any other series; but all shares of the preferred stock shall be
preferred over the common stock as to both dividends and amounts distributable
upon any voluntary or involuntary liquidation of the Corporation. All shares of
any one series shall be identical.

Preemptive Rights. No holder of shares of the stock of any class of the
Corporation shall have any preemptive or preferential right to subscribe to or
purchase (i) any shares of any class of the stock of the Corporation, whether
now or hereafter authorized; or (ii) any securities or obligations of the
Corporation convertible into stock of the Corporation, issued or sold; or (iii)
any options, warrants or rights to purchase such shares or securities
convertible into any such shares.

Rights, Options or Warrants. Authority is expressly vested in the Board
of Directors to create and issue rights, options, or warrants for the purchase
of shares of any class of the stock of the Corporation, upon such terms and
conditions and for such consideration, if any, and such purposes as the Board of
Directors may approve, without the necessity of shareholder approval.

ARTICLE V

The number of directors shall be fixed by the Bylaws, or, in the
absence of a Bylaw fixing the number, the number shall be nine. The directors
shall be divided into three classes (A, B, and C) as nearly equal in number as
possible. The initial term of office for members of Class A shall expire at the
first annual meeting of stockholders after their election; the initial term of
office for members of Class B shall expire at the second annual meeting of
stockholders after their election; and the initial term of office for members of
Class C shall expire at the third annual meeting of stockholders after their
election. At each annual meeting of stockholders following such initial
classification and election, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, and shall
continue to hold office until their respective successors are elected and
qualify.

The initial Board of Directors of the Corporation shall consist of nine
persons, and the names and addresses of the persons who are to serve as the
Directors of the Corporation and the class to which each director is assigned
are as follows:

Class A Directors Class B Directors Class C Directors
Wayne W. Broadwater Nancy K. Falck Robert M. Barlow
12031 Wright Lane 1502 Basswood Court 9411 Piscataway Lane
Bristow, VA 20136-1613 McLean, VA 22101 Great Falls, VA 22066

Harvey W. Huntzinger L. Burwell Gunn, Jr. Dale B. Peck
139 Dishpan Lane 5525 Beech Ridge Dr. 9111 Tetterton Ave.
Stafford, VA 22554 Fairfax, VA 22030 Vienna, VA 22182

John H. Rust, Jr. Jones V. Isaac James D. Russo
3915 Lake Boulevard 13317 Query Mill Rd. 11304 Taffrail Ct.
Annandale, VA 22003 North Potomac, MD 20878 Reston, VA 20191

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<PAGE>

In the event of any increase or decrease in the number of directors
fixed by the Bylaws, all classes of directors shall be increased or decreased as
equally as may be possible. Newly-created directorships resulting from an
increase by not more than two in the authorized number of directors or any
vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office, or other cause, shall be
filled by the affirmative vote of a majority of the directors then in office,
whether or not a quorum. Each director so chosen shall hold office until the
expiration of the term of the director, if any, whom he has been chosen to
succeed or, if none, until the expiration of the term of the class assigned to
the additional directorship to which he has been elected, or until his earlier
death, resignation, or removal. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director. Any director or the entire Board of Directors may be removed from
office at any time but only for cause and only by the affirmative vote of the
holders of more than two-thirds of each class of the voting stock of the
Corporation then outstanding at a meeting called for that purpose.

ARTICLE VI

A. Limitation of Liability. To the full extent that the Virginia
Stock Corporation Act, as it exists on the date hereof or may hereafter be
amended, permits the limitation or elimination of the liability of directors or
officers, a director or officer of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages.

B. Right to Indemnification. The Corporation may indemnify and
hold harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust, enterprise or nonprofit entity, including service with
respect to employee benefit plans, against all liability and loss suffered and
expenses reasonably incurred by such person. The Corporation shall be required
to indemnify a person in connection with a proceeding initiated by such person
only if the proceeding was authorized by the Board of Directors of the
Corporation.

C. Prepayment of Expenses. The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final disposition,
provided, however, that the payment of expenses incurred by a director or
officer in advance of the final disposition of the proceeding shall be made only
upon receipt of an undertaking by the director or officer to repay all amounts
advanced if it should be ultimately determined that the director or officer is
not entitled to be indemnified under this paragraph or otherwise.

D. Claims. If a claim for indemnification or payment of expenses
under this paragraph is not paid in full within sixty (60) days after a written

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<PAGE>

claim therefor has been received by the Corporation the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or in
part, shall be entitled to be paid the expense of prosecuting such claim. In any
such action the Corporation shall have the burden of proving that the claimant
was not entitled to the requested indemnification or payment of expenses under
applicable law.

E. Non-Exclusivity of Rights. The rights conferred on any person
by this paragraph shall not be exclusive of any other rights which such person
may have or hereafter acquire under any statute, provision of this certificate
of incorporation, the bylaws, agreement, vote of stockholders or disinterested
directors or otherwise.

F. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this paragraph.

G. Other Indemnification. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by any amount such person
may collect as indemnification from such other corporation, partnership, joint
venture, trust, enterprise or nonprofit enterprise.

H. Indemnification in the Event of Merger or Consolidation. For
the purposes of this paragraph, references to the Corporation include all
constituent corporations absorbed in a consolidation or merger as well as the
resulting or surviving corporation so that any person who is or was a director,
officer, employee or agent of such a constituent corporation or is or was
serving at the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise shall stand in the same position under the provisions of this
section with respect to the resulting or surviving corporation as he would if he
had served the resulting or surviving corporation in the same capacity.

I. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this paragraph shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.

ARTICLE VII

A. Amendment to Articles of Incorporation. An amendment to the
Articles of Incorporation of the Corporation shall be approved if a majority of
the votes entitled to be cast by each voting group entitled to vote on an
amendment to the Articles of Incorporation of the Corporation are cast in favor
of such action; provided, that, if such amendment shall have been approved by
less than two-

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<PAGE>

thirds of the directors, holders of more than two-thirds of the issued and
outstanding shares of the Corporation's common stock must vote in favor of such
action.

B. Merger, Exchange or Sale. Any mercer or share exchange to which
the Corporation is a party or any direct or indirect sale, lease, exchange or
other disposition of all or substantially all of the Corporation's property,
otherwise than in the usual and regular course of business, shall be approved if
a majority of the votes entitled to be cast by each voting group entitled to
vote on such transaction are cast in favor thereof; provided, that, if such
transaction shall have been approved by less than two-thirds of the directors,
holders of more than two-thirds of the issued and outstanding, shares of the
Corporation's common stock must vote in favor of such transaction.

C. Conditions Upon Approval. This Article shall not affect the
power of the board of directors to condition its submission of any plan of
merger, share exchange, or direct or indirect sale, lease, exchange or other
disposition of all or substantially all of the Corporation's property, otherwise
than in the usual and regular course of business, on any basis, including the
requirement of a greater vote.

IN WITNESS WHEREOF, I set my signature this 24th day of November, 1997.

/s/ John H. Rust, Jr.
----------------------------------[SEAL]
John H. Rust, Jr., Incorporator

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Exhibit 3.2

BYLAWS
OF
CARDINAL FINANCIAL CORPORATION

ARTICLE I
Shareholder Matters

Section 1.1. Annual Meetings.

A. The annual meeting of the shareholders of the Corporation shall
be held at such a place as may be decided by, the Board of Directors on a date
during the month of March, April or May of each and every year, the exact date,
place and hour to be fixed by the Board of Directors.

B. At the annual meeting of the shareholders of the Corporation,
Directors shall be elected and reports of the affairs of the Corporation shall
be received and considered. Any other business may be transacted which is within
the powers of the shareholders, except that, if any shareholder shall bring new
business before the annual meeting, the shareholder must give advance notice as
set forth in Section 1.6 of these Bylaws.

C. The Board of Directors may designate any place, either within or
without the Commonwealth of Virginia, as the place of meeting for any annual
meeting or for any special meeting. If no place is designated by the Board, the
place of meeting shall be the principal office of the Corporation.

Section 1.2. Special Meetings. A special meeting of the shareholders
may be called for any purpose or purposes whatsoever at any time, but only by
the President or the Chairman of the Board of Directors, or the Board of
Directors.

Section 1.3. Notice of Meetings. Notice of the time and place of
every annual meeting or special meeting shall be mailed to each Shareholder of
record entitled to vote at the meeting at his address as it appears on the
records of the Corporation not less than ten (10) nor more than sixty (60) days
before the date of such meeting (except as a different time may be specified by
law).

Section 1.4. Quorum. A majority of the votes entitled to be cast on a
matter by a voting group constitutes a quorum of such voting group for action on
such matter. If there is not a quorum at the time for which a meeting shall have
been called, the meeting may be adjourned from time to time by a majority of the
shareholders present or represented by proxy without notice, other than by
announcement at the meeting, until there is a quorum.

Section 1.5. Voting. Except as the Articles of Incorporation
otherwise provide, at any meeting of the shareholders, each outstanding share,
regardless of class, is entitled to one vote on each matter voted on at a
shareholders' meeting.

Section 1.6. Notice of Shareholder Business. (a) At an annual meeting
of the shareholders of the Corporation, only such business shall be conducted as
shall have been properly brought before the meeting. To be brought before an
annual meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise bought before the meeting by or at the

<PAGE>

direction of the Board of Directors, or (c) otherwise properly brought before
the meeting by a shareholder. For business to be properly brought before an
annual meeting by a shareholder, the Shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than sixty (60) days
nor more than ninety (90) days prior to the date of the scheduled annual
meeting, regardless of any postponements, deferrals or adjournments of that
meeting to a later date; provided, however, that in the event that less than
seventy (70) days' notice or prior public disclosure of the date of the
scheduled annual meeting is given or made, notice by a shareholder, to be
timely, must be so received not later than the close of business on the tenth
(10th) day following the earlier of the day on which such notice of the date of
the scheduled annual meeting was mailed or the day on which such public
disclosure was made. A shareholder's notice to the Secretary of the Corporation
shall set forth as to each matter the shareholder proposes to bring before the
annual meeting (a) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (b) the name and address, as they appear on the Corporation's
books of the shareholder proposing such business and of any other person or
entity who is the record or beneficial owner of any shares of the Corporation
and who, to the knowledge of the shareholder proposing such business, supports
such proposal, (c) the class and number of shares of the Corporation which are
beneficially owned and owned of record by the shareholder proposing such
business on the date of his notice to the Corporation and the number of shares
so owned by any person or entity who, to the knowledge of the shareholder
proposing such business, supports such proposal and (d) any material interest
(financial or other) of such shareholder in such proposal. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at any
annual meeting except in accordance with the procedures set forth in this
Section 1.6. The Chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this Section 1.6.
and if he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.

(b) Nothing in Section 1.6(a) shall be interpreted to mean that a
shareholder shall not be permitted to ask pertinent questions or to express his
or her views on any pertinent matter.

Section 1.7. Order of Business. All meetings of shareholders shall be
conducted in accordance with such rules as are prescribed by the Chairman of the
meeting and he shall determine the order of business at all meetings of the
shareholders.

Section 1.8. Inspectors. The Board of Directors, in advance of any
meeting of shareholders, may, but shall not be required to, appoint one or more
inspectors to act at such meeting or any adjournment thereof. If any of the
inspectors so appointed shall fail to appear or act, the Chairman of the meeting
may appoint one or more inspectors. The inspectors shall determine the number of
shares of capital stock of the Corporation outstanding and the voting power of
each, the number of shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots or consents,
determine the results, and do such acts as are proper to conduct the election or
vote with fairness to all shareholders. On request of the Chairman of the
meeting, the inspectors shall make a report of any challenge, request or matter
determined by them and shall execute a certificate of any fact found by them. No
director or candidate for the office of

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<PAGE>

director shall act as an inspector of an election of directors. Inspectors need
not be shareholders.

ARTICLE II
Directors

Section 2.1. General Powers. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors and,
except as otherwise expressly provided by law or by the Articles of
Incorporation, or by these Bylaws, all of the powers of the Corporation shall be
exercised by or under the authority of said Board of Directors.

Section 2.2. Number and Qualification. The Board of Directors shall
consist of nine Directors. Each Director shall be a resident of the Commonwealth
of Virginia. Except for the initial Directors of the Corporation identified in
the Articles of Incorporation (who may be reelected one or more times,
regardless of age), no one who is seventy years of age or older shall be
eligible to stand for election to the Board of Directors.

As more particularly described in the Articles of Incorporation, the
directors shall be divided into three classes (A, B and C) as nearly equal in
number as possible. The initial term of office for members of Class A shall
expire at the first annual meeting of stockholders after their election; the
initial term of office for members of Class B shall expire at the second annual
meeting of stockholders after their election; and the initial term of office for
members of Class C shall expire at the third annual meeting of stockholders
after their election. At each annual meeting of stockholders following such
initial classification and election, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to expire at
the third succeeding annual meeting of stockholders after their election, and
shall continue to hold office until their respective successors are elected and
qualify.

In the event of any increase or decrease in the number of directors
fixed by the Bylaws, all classes of directors shall be increased or decreased as
equally as may be possible. Newly-created directorships resulting from an
increase by not more than two in the authorized number of directors or any
vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office, or other cause, shall be
filled by the affirmative vote of a majority of the directors then in office,
whether or not a quorum. Each director so chosen shall hold office until the
expiration of the term of the director, if any, whom he has been chosen to
succeed or, if none, until the expiration of the term of the class assigned to
the additional directorship to which he has been elected, or until his earlier
death, resignation or removal. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director. Any director or the entire Board of Directors may be removed from
office at any time but only for cause and only by the affirmative vote of the
holders of more than two-thirds of each class of the voting stock of the
Corporation then outstanding at a meeting called for that purpose.

Section 2.3. Election of Directors. The Directors shall be elected at
the annual meeting of shareholders. Nominations for the election of Directors
shall be given in the manner provided in Section 2.5.

Section 2.4. Honorary and Advisory Directors. The Board may appoint
to the position of Honorary Director or the position of Advisory Director such
person or persons as it deems appropriate. Honorary Directors shall be entitled
to receive notice of, and to attend all

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<PAGE>

meetings of the Board, but they shall not be Directors and shall not be entitled
to vote, nor shall they be counted in determining a quorum of the Board.
Advisory Directors shall be entitled only to notice of meetings of Advisory or
other Boards of the Corporation to which they shall be appointed. Honorary and
Advisory Directors shall receive such compensation as may be authorized by the
Board of attendance at meetings of Advisory or other Boards to which such
Advisory or Honorary Directors are appointed.

Section 2.5. Nominations. Only persons who are nominated in
accordance with the procedures set forth in this Section 2.5 shall be eligible
for election as Directors. Nominations of persons for election to the Board of
Directors of the Corporation may be made by or at the direction of the Board of
Directors, or by any shareholder of the Corporation entitled to vote for the
election of Directors who complies with the notice procedures set forth in this
Section 2.5(a). Such nominations, other than those made by or at the direction
of the Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than sixty (60) days nor more than ninety (90) days prior
to the date of the scheduled annual meeting, regardless of postponements,
deferrals, or adjournments of that meeting to a later date; provided, however,
in the event that less than seventy (70) days' notice or prior public disclosure
of the date of the meeting is given or made, notice by the shareholder to be
timely must be so received not later than the close of business on the 10th day
following the earlier of the day on which such notice of the date of the
scheduled annual meeting was mailed or the day on which such public disclosure
was made. Such shareholder's notice shall set forth (a) as to each person whom
the shareholder proposes to nominate for election as a Director, (i) the name,
age, business address and residence address of such person, (ii) the principal
occupation or employment of such person, (iii) the class and number of shares of
the Corporation which are beneficially owned by such person and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended; and (b) as to the shareholder giving the notice (i) the name and
address of such shareholder and of any other person or entity who is the record
or beneficial owner of shares of the Corporation and who, to the knowledge of
the shareholder giving notice, supports such nominee(s) and (ii) the class and
number of shares of the Corporation which are beneficially owned and owned of
record by such shareholder and by any other person or entity who is the record
or beneficial owner of shares of the Corporation and who, to the knowledge of
the shareholder giving the notice, supports such nominee(s). At the request of
the Board of Directors any person nominated by the Board of Directors for
election as a Director shall furnish to the Secretary of the Corporation the
information required to be set forth in a shareholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election as a
Director of the Corporation unless in accordance with the procedures set forth
in this Section 2.5(a). The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by the Bylaws, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.

Section 2.6. Meetings of Directors. Meetings of the Board of
Directors shall be held at places within or without the Commonwealth of Virginia
and at times fixed by resolution of the Board of Directors, or upon call of the
Chairman of the Board of Directors or the President. The Secretary, or officer
performing his duties, shall give at least twenty-four (24) hours' notice by
telegraph, letter, telephone or in person, of all meetings of the Directors;

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<PAGE>

provided, that notice need not be given of regular meetings held at times and
places fixed by resolution of the Board. Regular meetings of the Board of
Directors shall be held at least once in every calendar quarter. Meetings may be
held at any time without notice if all of the Directors are present, or if those
not present waive notice either before or after the meeting. Neither the
business to be transacted nor the purpose of any annual or special meeting of
the Board of Directors need be specified in the notice or waiver of notice of
such meeting.

Section 2.7. Quorum. A majority of the members of the Board of
Directors shall constitute a quorum.

Section 2.8. Compensation. The Board of Directors shall fix the
compensation of the Directors.

Section 2.9. Committees. The Board of Directors may create committees
and appoint members of committees in accordance with Virginia law.

ARTICLE III
Officers

Section 3.1. Election. The Officers of the Corporation shall consist
of the Chairman of the Board of Directors, the President, one or more Vice
Presidents, a Secretary, a Chief Financial Officer, one or more Assistant
Secretaries, and such other officers as may be elected as provided in Section
3.3 of this Article. All Officers shall be elected by the Board of Directors,
and shall hold office until their successors are elected and qualify. Vacancies
may be filled at any meeting of the Board of Directors. Subject to any
applicable provision of Virginia law, more than one office may be combined in
the same person as the Board of Directors may determine.

Section 3.2. Removal of Officers. Any Officer of the Corporation may
be summarily removed with or without cause, at any time, by a resolution passed
by affirmative vote of a majority of all of the Directors; provided that any
such removal shall not affect an Officer's right to any compensation to which he
is entitled under any employment contract between him and the Corporation.

Section 3.3. Other Officers. Other Officers may from time to time be
appointed by the Board of Directors, and such Officers shall hold office for
such term as may be designated by the said Board of Directors.

Section 3.4. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the Directors and all meetings of the shareholders.
He shall appoint all standing committees and temporary committees. He shall be a
member ex- officio of all standing committees and shall have all other powers
and duties as may be prescribed by the Board of Directors or by the Bylaws.

Section 3.5. President. The President shall be the Chief Executive
Officer of the Corporation. In the absence or disability of the Chairman of the
Board, the President shall preside at all meetings of the Directors and at
meetings of the shareholders and in the absence or disability of the Chairman of
the Board, the duties and responsibilities of such offices shall devolve upon
the President. The President shall have such other powers and duties as may be
prescribed by the Chairman of the Board of Directors, the Board of Directors or
by the Bylaws.

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<PAGE>

Section 3.6. Vice President. In the absence or disability of the
President, the Vice President shall act as the Chief Executive Officer of the
Corporation. The duties and responsibilities of the Vice President are those
delegated to him by the Board of Directors or the President.

Section 3.7. Secretary. The Secretary shall have the duties and
responsibilities prescribed by law for the secretary of a Virginia corporation.

Section 3.8. Surety Bonds. All Officers and employees who shall have
charge or possession of money, securities or property of the Corporation must,
before entering upon their duties, be covered by a bond with a surety company
approved by the Board of Directors and state and federal authorities. The costs
of such bond shall be borne by the Corporation.

ARTICLE IV
Capital Stock

Section 4.1. Issues of Certificate of Stock. Certificates of capital
stock shall be in such form as may be prescribed by law and by the Board of
Directors. All certificates shall be signed by the President and by the Chief
Financial Officer or Secretary or an Assistant Secretary, or by any other two
Officers authorized by resolution of the Board of Directors.

Section 4.2. Transfer of Stock. The stock of the corporation shall be
transferable or assignable on the books of the Corporation by the holders in
person or by attorney on surrender of the certificate or certificates for such
shares duly endorsed, and, if sought to be transferred by attorney, accompanied
by a written power of attorney to have such stock transferred on the books of
the Corporation.

Section 4.3. Restrictions on Transfer of Stock. Any restrictions that
may be imposed by law, by the Articles of Incorporation or Bylaws of the
Corporation, or by an agreement among shareholders of the Corporation, or by an
agreement among shareholders of the Corporation, shall be noted conspicuously on
the front or back of all certificates representing shares of stock of the
Corporation.

Section 4.4. Lost, Destroyed or Mutilated Certificates. The holder of
stock of the Corporation shall immediately notify the Corporation of any loss,
destruction, or mutilation of the certificate therefor, and the Corporation may
in its discretion cause one or more new certificates for the same aggregate
number of shares to be issued to such Stockholder upon the surrender of the
mutilated certificate, or upon satisfactory proof of such loss or destruction
accompanied by the deposit of a bond in such form and amount and with such
surety as the Corporation may require.

Section 4.5. Holder of Record. The Corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder thereof
in fact and shall not be bound to recognize any equitable or other claim to or
interest in such shares of stock on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise expressly
provided by law.

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<PAGE>

Section 4.6. Record Date. The Board of Directors shall fix in advance
the record date in order to make a determination of shareholders for any
purpose, including the determination of shareholders entitled to notice of or to
vote at any shareholders' meeting or entitled to payment of any dividend or
distribution to shareholders. Such record date shall not be more than seventy
(70) days prior to the date on which the particular action requiring such
determination of shareholders is to be taken.

Section 4.7. Control Share Acquisitions. Article 14.1 of the Virginia
Stock Corporation Act shall not apply to the Corporation.

ARTICLE V
Miscellaneous Provisions

Section 5.1. Seal. The seal of the Corporation shall be circular in
shape with the name of the Corporation around the circumference thereof, and the
word "SEAL" in the center thereof.

Section 5.2. Examination of the Books and Records. The books and
records of account of the Corporation, the minutes of the proceedings of the
shareholders, the Board and Committees appointed by the Board of Directors and
the records of the shareholders showing the names and addresses of all
shareholders and the number of shares held by each, shall be subject to
inspection during the normal business hours by any person who is a duly
qualified Director of the Corporation at the time he makes such inspection.
Shareholders shall have such rights to inspect records of the Corporation as are
prescribed by applicable law.

Section 5.3. Checks, Notes and Drafts. Checks, notes, drafts, and
other orders for the payment of money shall be signed by such persons as the
Board of Directors from time to time may authorize.

Section 5.4. Voting of Stock Held. Unless otherwise provided by
resolution of the Board of Directors, the Chairman of the Board of Directors,
the President or any Vice President may from time to time appoint an attorney or
attorneys as agent or agents of the Corporation to cast in the name of the
Corporation the votes which the Corporation may be entitled to cast as a
shareholder or otherwise in any other corporation, any of whose stock or
securities may be held by the Corporation, at meetings of the holders of the
stock or other securities of such other corporation, or to consent in writing to
any action by any such other corporation; and such Officers may instruct the
person or persons so appointed as to the manner of casting such votes or giving
such consent, and may execute or cause to be executed on behalf of the
Corporation and under its corporate seal, or otherwise, such written proxies,
consents, waivers, or other instruments as may be necessary or proper in the
premises; or any of such Officers may himself attend any meeting of the holders
of stock or other securities of any such other corporation and there vote or
exercise any or all other powers of the Corporation as the holder of such stock
or other securities of such other corporation.

-7-

Exhibit 10

THIS EMPLOYMENT CONTRACT

made and entered into this 30th day of September, 1997 between Commercial
Fidelity Financial Partnership ("Employer"), a partnership organized for the
sole purpose of organizing a banking institution; and L. Burwell Gunn, Jr.
("Employee").

WHEREAS, Employer is in the process of forming a new banking
institution in Fairfax County, Virginia ("Bank"); and,

WHEREAS, Employer also intends to form a Virginia multi-bank holding
company ("Holding Company") for the purpose of organization or acquisition of
additional banking institutions; and,

WHEREAS, Employer intends to merge the Bank into the Holding Company
upon organization of both entities; and,

WHEREAS, Employee has agreed to become President and Chief Executive
Officer of both the Bank and the Holding Company; and,

WHEREAS, the parties wish to establish the terms and conditions of
Employee's employment.

NOW, therefore, in consideration of the promises and the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:

1. RELATIONSHIP AND DUTIES BETWEEN THE PARTIES.

1.1 Bank.

1.1.1 Employer hereby employs Employee on the effective
date hereof (as defined below) as President and Chief Executive Officer
of the Bank, to hold the title of President and Chief Executive
Officer, and to perform such services and duties as the Bank's Board of
Directors ("Bank Board") may, from time to time, designate during the
term hereof. Subject to the terms and conditions hereof, Employee will
perform such duties and exercise such authority as are customarily
performed and exercised by persons holding such office, subject to the
direction of the Bank Board.

<PAGE>

1.1.2 Employee shall serve on the Bank Board and as a
member of its Executive Committee and such other committees as the Bank
Board may designate, subject to the terms hereof.

1.2 Holding Company.

1.2.1 Employer agrees to employ Employee on the effective
date of organization of the Holding Company (as defined below) as
President and Chief Executive Officer of the Holding Company, to hold
the title of President and Chief Executive Officer, and to perform such
services and duties as the Holding Company's Board of Directors
("Holding Company Board") may, from time to time, designate during the
term hereof. Subject to the terms and conditions hereof, Employee will
perform such duties and exercise such authority as are customarily
performed and exercised by persons holding such office, subject to the
direction of the Holding Company Board.

1.2.2 Employee shall serve on the Holding Company Board
and as a member of its Executive Committee and such other committees as
the Holding Company Board may designate, subject to the terms hereof.

1.2.3 If Employer fails to organize the Holding Company
or is otherwise unable to merge the Bank and the Holding Company as
Employer presently intends, this Agreement shall continue in full force
and effect, but the duties and obligations of Employee shall be limited
to those related to the Bank.

1.3 Employee Undertakings.

1.3.1 Employee accepts such employment and shall devote
his full time, attention, and best efforts to the diligent performance
of his duties herein specified and as an officer and director of the
Bank and the Holding Company. While employed by Employer, the Employee
will not, without the prior express consent of the Bank Board and the
Holding Company Board (which consent shall not be unreasonably
withheld) accept employment with any other individual, corporation,
partnership, governmental authority or other entity, or engage

-2-
<PAGE>

in any other venture for profit which Employer or either Board may
consider to be in conflict with the best interests of the Bank or the
Holding Company or to be in competition with the Bank or the Holding
Company, or which may interfere in any way with the Employee's
performance of his duties hereunder. it is understood that Employee
does have the right to participate in passive investments including
income producing real estate.

1.3.2 Employer shall not require the Employee, as a part
of his duties, to perform or to participate in any activity which
constitutes a violation of any state or federal law, rule, ordinance or
regulation.

1.4. Regulatory Approval.

1.4.1 In the event that the Virginia Bureau of Financial
Institutions ("BFI") or the Federal Deposit Insurance Corporation
("FDIC") declines to approve Employee as Chief, Executive Officer of
the Bank, but does not otherwise prohibit ,employment of the Employee
by the Bank in an alternative senior officer position, the Employer
agrees to negotiate in good faith with Employee to determine mutually
acceptable terms of employment and compensation in such lesser
capacity.

1.4.2 In the event that the Federal Reserve Board
declines to approve Employee as Chief Executive Officer of the Holding
Company, but does not otherwise prohibit the Bank or the Holding
Company from employing the Employee in an alternative senior officer
position, the Employer agrees to negotiate in good faith with Employee
to determine mutually acceptable terms of employment and compensation
in such lesser capacity.

2. DEFINITIONS.

2.1 "Complete disability" shall mean the inability of Employee, due to
illness, accident, or any other physical or mental incapacity, completely to
fulfill his obligations hereunder for an aggregate of ninety (90) days within
any period of 180 consecutive days during the term hereof.

-3-
<PAGE>

2.2 "Cause" shall include, without limitation: dishonesty; theft;
conviction of a crime, which is either (a) a felony, or (b) a misdemeanor
involving moral turpitude or financial impropriety; unethical business conduct;
activity which is contrary to the Bank's interests; gross or repeated negligence
in carrying out Employee's duties; or material violation of Employee's
obligations hereunder.

2.3 "Employer" shall be deemed synonymous with the terms "Bank" or
"Holding Company" or "Bank Board" or "Holding Company Board", whenever the
context so requires.

3. TERMS OF EMPLOYMENT

3.1 Term.

3.1.1 Employee's employment hereunder shall commence upon
the effective date hereof, which shall be the earlier of the first
business day after BFI authorizes the Employer to commence capital
formation for the Bank or the date on which Employee begins working
full-time for Employer. Employee shall begin working full-time for
Employer as soon as possible after appropriate notice to Crestar Bank,
his current employer. Said employment shall continue until the end of
the Bank's third full fiscal year unless terminated earlier pursuant to
the terms hereof.

3.1.2 After completion of two (2) full fiscal years of
employment, the Bank and the Employee shall enter into negotiations to
extend the term of Employee's employment for at least two additional
years.

3.1.3 Employee's employment pursuant to this agreement
shall be terminated by the first to occur of any of the following:

3.1-3.1 the death of Employee;

3.1-3.2 the complete disability of Employee;

3.1-3.3 the discharge of Employee by Employer for
cause.

3.1-3.3.1 Should Employer deem specific
activities contrary to the Bank's interest or that negligence by Employee in
carrying out his duties or any violation of Employee's

-4-
<PAGE>

obligations hereunder has occurred, notice of said activity, negligence or
violation shall be provided by Employer to Employee along with a reasonable
period of time in which to correct. Provided that such activity, negligence or
violation is neither dishonest nor criminal, sixty (60) days shall be deemed to
be a reasonable time in which to correct such deficiencies.

3.1.3.3.2 Discharge for "cause" will
require a two-thirds majority vote of the Board, exclusive of the Employee.

3.1.3.3.3 Termination of Employee's
employment for cause shall include termination as an employee, officer and
director of the Bank and the Holding Company.

3.2 Termination Without Cause. Employee shall serve at the pleasure of
the Holding Company Board. Employer may terminate this agreement without cause
at any time upon an affirmative vote of two-thirds (2/3) of all members of the
Holding Company Board, whether or not in attendance at the meeting or voting
upon the issue. In the event of such termination without cause by Employer,
Employee shall be paid a severance payment equal to Employee's annual base
salary in effect at the time of termination. Such severance pay shall be paid in
a lump sum not later than thirty (30) days following the effective date of
termination. In addition, upon any such termination Employee shall be entitled
to purchase the automobile provided hereunder at the current book value.
Employee shall not be entitled to any performance bonus in the year of
termination, except as may be awarded in the sole discretion of the Boards.

4. COMPENSATION

For all services which Employee may render to Employer during the term
hereof, Employer shall pay to Employee, subject to such deductions as may be
required by law, according to the schedule set out below:

4.1 Base Salary. From the effective date hereof, Employee shall
receive for the term of this contract a salary based on an annual rate of
$150,000, payable in equal monthly installments, subject to such deductions as
may be required by law. The Employee will receive performance reviews at least
annually at the end of each fiscal year from the Bank Board and the Holding
Company Board, and

-5-
<PAGE>

the Employee's base salary may be increased but not decreased at the sole
discretion of the Bank Board and the Holding Company Board.

4.2 Formation Bonus. Employer shall pay to Employee, on or before
January 31, 1998, a total formation bonus of up to $25,000, consisting of $5,000
for each of the following items which has been successfully completed on or
before December 31, 1997; provided, that if Employer determines to defer or
abandon any of the efforts described in sections 4.2.1 through 4.2.5 below,
Employee shall be deemed to have earned that portion of the formation bonus
provided all other terms are met:

4.2.1 Annual operating and capital budgets for the Bank,
the Holding Company and each of the proposed subsidiary banks have been
approved by the Holding Company Board and each of the appropriate
subsidiary boards, if then constituted.

4.2.2 The Bank has properly completed all regulatory
applications necessary to operate the Bank and has filed the same with
the appropriate regulatory authorities.

4.2.3 The Holding Company has properly completed all
regulatory applications necessary to operate the Holding Company and
has filed the same with the appropriate regulatory authorities and the
Holding Company has filed an appropriate registration statement with
the Securities and Exchange Commission and any necessary state
regulatory authorities to permit the public offering of the stock of
the Holding Company.

4.2.4 All regulatory applications necessary to operate
the proposed three additional subsidiary banks, excluding the
identification of banking officers, board members and operating
locations, have been prepared and approved by the Holding Company Board
and each of the appropriate subsidiary boards. During such period,
Employee shall assist the Employer to the extent requested in
identifying suitable board members and banking officers for such
subsidiaries.

4.2.5 The Bank shall have received firm commitments or
actual payment of at least $2,500,000 in capital from persons other
than the insider investors. For purposes of this bonus, insider

-6-
<PAGE>

investors mean the proposed officers and directors of the Bank, the
holding Company and the three proposed subsidiary banks.

4.3 First Year Performance Bonus. Employer shall pay to Employee,
within 30 days after receipt of audited financial statements for 1998, a total
first-year performance bonus of up to $50,000, consisting of $10,000 for each of
the following items which has been successfully completed on or before December
31, 1998; provided, that if Employer determines to defer or abandon any of the
efforts described in sections 4.3.1 through 4.3.5 below, Employee shall be
deemed to have earned that portion of the performance bonus provided all other
terms are met:

4.3.1 The Bank shall have total nonvolatile assets equal
to or in excess of $30,000,000.

4.3.2 The charters of the proposed three additional
subsidiary banks shall be approved and such banks shall be open and
operating.

4.3.3 Among the Holding Company or its subsidiary banks
there shall have been established mortgage brokerage services, a title
insurance operation, discount stock brokerage operations, and a trust
department.

4.3.4 Operating expenses and pre-opening expenses of the
Holding Company and its subsidiary banks do not exceed approved budget
amounts.

4.3.5 The Bank shall have achieved monthly sustainable
break-even operations, calculated in accordance with generally accepted
accounting principles for financial reporting rather than income tax
reporting of financial institutions, by not later than December 1998.

4.4 Subsequent Performance Bonuses. During subsequent contract years,
the Employer and Employee shall agree upon performance goals upon which to base
Employee's eligibility for annual bonus payments. The parties shall endeavor to
establish reasonable performance goals which are realistically attainable upon
exercise of proper management skills. It is anticipated that the basis upon
which Employee may earn components of the annual

-7-
<PAGE>

performance bonus may change and that Employee may not earn all components of
such annual bonus each year; however, in no event shall the total potential
bonus which is available to Employee be reduced below $50,000 in any year.
Employer shall pay to Employee all performance bonus components which have been
earned within 30 days after receipt of audited financial statements for the year
in question.

4.5 Termination for Cause. If Employee is terminated for cause prior
to the end of a fiscal year, Employer shall not be obligated to pay any annual
performance bonus after such termination, notwithstanding whether the Employee
has met the requirements to earn components of an annual performance bonus.

5. OTHER BENEFITS

During the term of Employee's employment hereunder, Employer shall
furnish the following to Employee:

5.1 An American automobile of Employee's choice having a cost (net of
trade-in) not to exceed $30,000, which automobile may be leased by the Bank.

5.2 A term life insurance policy providing for death benefits of
$500,000 having a beneficiary designated by the Employee.

5.3 A group health and hospitalization insurance policy covering the
Employee and, if the Employee desires, covering the dependents and spouse of the
Employee at no cost to the Employee other than such deductible as may be
applicable to all other Employees of the Bank.

5.4 A long term disability insurance policy, as generally defined in
the insurance industry, providing for benefits of at least 60% of Employee's
annual base salary. This long term disability policy will be as consistent as
reasonably possible with the definition of "complete disability" provided above.

5.5 A complete physical examination for the Employee on an annual
basis at the Bank's expense.

-8-
<PAGE>

5.6 Employer shall cooperate with Employee to transfer the existing
whole life policy upon Employee's life now held by Crestar and Employee to
Employer and Employee. Employer and Employee shall pay the premiums for such
policy on a split-dollar basis, subject to the approval of Employer, which
approval shall not be unreasonably withheld.

5.7 In the event that Employee terminates employment with Employer for
any reason, Employee may continue the health and disability insurance benefits
in section 5.3 and 5.4 above for twelve months, or such greater period as the
law requires, at no cost to Employer.

6. STOCK OPTIONS

6.1 During each year of employment, Employee shall be granted an
option to purchase shares of stock of the Bank, or, after the merger of the Bank
into the Holding Company, stock of the Holding Company, equal to one-half of one
percent of the original issue of the stock of the Bank or the Holding Company,
as the case may be, at the original issue price of such stock; provided that at
the end of each fiscal year, the performance of the Bank, or the Holding
Company, as appropriate, based on the annual standards indicated below, meets or
exceeds the amount budgeted for such year.

6.2 In the first year, the Employee shall be eligible for such options
if the Bank's total assets exceed the amounts set forth in the pro forma
statements submitted to BFI as a part of the Bank's application for a charter.
In the second year, the Employee shall be eligible for such options if the
Bank's return on assets exceeds the return on assets anticipated in the annual
budget which the Bank Board approved for that year. In the third year and
thereafter, the Employee shall be eligible for such options if the return on
assets of the Holding Company exceeds the return on assets anticipated in the
annual budget which the Holding Company Board approved for the year in question.

6.3 Subject to section 6.6 below, any such stock options may be
exercised in whole or in part at any time during the first ten (10) years after
the original issue of stock in the Holding Company.

-9-
<PAGE>

6.4 If Employee is terminated for cause, Employer shall not be
obligated to issue any further stock options after such termination,
notwithstanding whether the Employee has met the requirements to earn such stock
options.

6.5 If Employee's employment with Employer terminates, for whatever
reason, Employee shall have ninety (90) days after such termination in which to
exercise any and all stock options outstanding and issued to Employee. Upon
Employee's termination of employment, any right to receive further stock options
not then accrued shall also immediately terminate.

7. FAILURE TO OBTAIN CHARTER OR FINANCING

Upon the happening of either of the following events, either party may
terminate this Agreement by notice in writing to the other, in which event this
Agreement shall cease and be null, void, and of no further force and effect,
except as expressly provided in this section:

7.1 The refusal or failure of BFI to issue a charter to Employer to
operate a bank within 180 days of an application for such having been submitted
to said agency by Employer; or

7.2 The failure for any reason by Employer to raise Bank capital in an
amount satisfactory to Employer within 180 days after Employer begins to raise
such capital for the Bank.

If this contract is terminated by reason of the foregoing and Employee
has commenced employment hereunder, Employer agreed to provide Employee the
Employee's base salary provided hereinabove for a period not to exceed twelve
(12) month

8. EXPENSES

Upon Employee's presentment to Employer of expense reports acceptable
to Employer and which are in sufficiently detailed form to comply with standards
for deduction of business expenses established from time to time by the Internal
Revenue Service, Employer will reimburse Employee for such expenses approved by
Employer and incurred by Employee in connection with performance of his duties
hereunder, including reimbursement for his dues and reasonable business expenses
incurred at the Country Club of Fairfax.

-10-
<PAGE>

9. POST TERMINATION COVENANTS

9.1 At such time as Employee's employment by Employer terminates,
other than a termination of Employee by Employer without cause, whether during
the initial contract period of employment or thereafter, Employee agrees that
for six (6) months following such termination he will not engage (either
individually or as an employee or representative of any other person or entity)
in banking activities in which chartered national or state banks may at that
time regally be engaged, within a five (5) mile radius of any location of the
Bank, the Holding Company, or any location of the subsidiary banks identified
prior to such termination.

9.2 Employee further agrees that for one (1) year following such
termination he will not engage (either individually or as an employee or
representative of any other person or entity) in banking activities as a chief
executive officer of any financial institution, or as an officer other than CEO
of a financial institution having assets of $1,000,000,000 or less, within a
five (5) mile radius of any location of the Bank, the Holding Company, or any
location of the subsidiary banks identified prior to such termination.

9.3 Furthermore, for one (1) year following such termination, Employee
agrees that he will not, without the prior written consent of Employer: (i)
furnish anyone with the name of, or any list or lists which identify, any
customers or stockholders of the Employer or utilize such list or information
himself; (ii) furnish, use, or divulge to anyone any confidential information of
Employer acquired by him from Employer and relating to Employer's business
activities; (iii) contact directly or indirectly any customer of Employer for
the purpose of soliciting such person's business for another bank or similar
financial institution; (iv) hire for any other employer (including himself) any
employee of Employer or directly or indirectly cause such employee to leave his
or her employment to work for another; (v) pursue an actual or potential
business opportunity of interest to and which could be pursued by Employer which
came to the attention of Employee in connection with his employment with
Employer and which Employee had not previously offered in writing to Employer
with sufficient advance notice to allow Employer to examine and pursue or reject
such opportunity. Excepted from the requirements of subparagraphs (i) and (ii)
in this

-11-
<PAGE>

paragraph is any information which is or becomes publicly available information
through no fault or act of Employee.

9.4 It is understood and agreed by the parties hereto that the
provisions of this section are independent of each other, and to the extent any
provision or portion thereof shall be determined by a court of competent
jurisdiction to be unenforceable, such determination shall not affect the
validity or enforceability of any other provision of this paragraph or the
remainder of this Agreement.

10. WAIVER OF PROVISIONS

Failure by any of the parties hereto to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this agreement shall not be deemed a waiver or relinquishment of
any right granted hereunder or of the obligation of future performance of any
such term or condition or of any other term or condition of this agreement,
unless such waiver is contained in writing signed by or on behalf of all the
parties.

11. GOVERNING LAW

This agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Virginia. If for any reason any
provision of this agreement shall be held by a court of competent jurisdiction
to be void or unenforceable, the same shall not affect the remaining provisions
hereof.

12. MODIFICATION AND AMENDMENT

This agreement contains the sole and entire agreement among the parties
hereto and supersedes all prior discussions and agreements among the parties,
and any such prior agreements shall, from and after the date hereof, be null and
void. This agreement shall not be modified or amended except by an instrument in
writing signed by or on behalf of all parties hereto.

13. COUNTERPARTS AND HEADINGS

This agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set

-12-
<PAGE>

out herein are for convenience of reference and shall not be deemed a part of
this agreement.

14. INJUNCTIVE RELIEF

In the event of a breach or threatened breach by Employee of
any of the provisions hereof, and notwithstanding any other provision in this
agreement, Employer, in addition to any other available rights or remedies,
shall be entitled to such temporary restraining orders and permanent
injunctions, as are allowable and authorized by the laws of the Commonwealth of
Virginia based on the facts of the case, to restrain such breach by Employee
and/or any persons directly or indirectly acting for or with him. Employee's
obligations under paragraph 9 hereof shall remain binding and enforceable
according to its terms notwithstanding expiration or termination of the other
terms of this agreement or the expiration or termination of Employee's
employment relationship with the Bank.

15. SUCCESSORS

This Agreement shall inure to the benefit of and be binding upon the
Employer, its successors and assigns and upon the Employee, and his heirs and
personal representatives. Neither this agreement nor performance hereunder may
be assigned by Employee or Employer except as provided by paragraph 16 of this
agreement.

16. CONTRACT ASSIGNABLE

16.1 Upon Employer's receipt for the Bank of all necessary approvals
from BFI, FDIC, the Federal Reserve, the Secretary of Commonwealth of Virginia,
and any other regulatory authority whose approval is required prior to
commencement of business by the Bank as a chartered bank, this agreement shall
be deemed automatically assigned in whole, without execution of any documents or
the taking of any other action by the parties hereto, to the banking institution
which Employer has formed and the required federal and state regulatory bodies
have approved. Upon such event, the term "Employer" as used herein shall mean
that banking institution, which is also referred to 'herein as "Bank". Upon
receipt of its charter, the Bank shall be required, through its duly authorized
agent, to agree in writing to accept assignment of this employment contract and
to be bound by its terms.

-13-
<PAGE>

16.2 Upon the later of (a) Employer's receipt for the Holding Company
of all necessary approvals from BFI, FDIC, the Federal Reserve, the Secretary of
Commonwealth of Virginia, and any other regulatory authority whose approval is
required prior to commencement of business by the Holding Company as a
multi-bank holding company and (b) the merger of the Bank into the Holding
Company, this agreement shall be deemed automatically assigned from Employer and
from Bank, in whole, without execution of any documents or the taking of any
other action by the parties hereto, to the Holding Company which Employer formed
and which the required federal and state regulatory bodies have approved. Upon
such event, the term "Employer" as used herein shall mean the Holding Company.
Upon receipt of regulatory approvals, the Holding Company shall be required,
through its duly authorized agent, to agree in writing to accept assignment of
this employment contract and to be bound by its terms.

IN WITNESS WHEREOF, the parties hereto have executed this agreement
under seal as of the date first written above.

EMPLOYEE:

/s/ Robert M. Barlow /s/ L. Burwell Gunn, Jr.
- ------------------------------ --------------------------(SEAL)
Witness L. Burwell Gunn, Jr.

EMPLOYER:

COMMERCIAL FIDELITY FINANCIAL
PARTNERSHIP, a Virginia general
partnership

/s/ Robert M. Barlow By: /s/ John H. Rust, Jr.
- ------------------------------ ----------------------(SEAL)
Its General Partner

-14-

LIST OF SUBSIDIARIES

Cardinal Bank, N.A.

Exhibit 23.2

May 8, 1998

The Board of Directors
Cardinal Financial Corporation:

We consent to the use of our report included herein and to the reference to our
firm under the heading "Experts" in the prospectus.

/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP

Washington, D.C.
May 7, 1998

<ARTICLE> 9

<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> MAR-31-1998 DEC-31-1997
<CASH> 9676049 4283454
<INT-BEARING-DEPOSITS> 0 0
<FED-FUNDS-SOLD> 0 0
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<TOTAL-ASSETS> 10161321 8795846
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0 0
0 0
<COMMON> 1409509 1174988
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<EXPENSE-OTHER> 284920 149495
<INCOME-PRETAX> (185300) (145178)
<INCOME-PRE-EXTRAORDINARY> (185300) (145178)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (185300) (145178)
<EPS-PRIMARY> (.14) (.12)
<EPS-DILUTED> (.14) (.12)
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</TABLE>