July 21, 2005

For Immediate Release:

Wilmington, NC—July 21, 2005. Cooperative Bankshares, Inc. (NASDAQ: "COOP") reported net income for the quarter ended June 30, 2005, of $1,390,913 or $0.32 per diluted share, an increase of 24% over the same quarter last year. Net income for the quarter ended June 30, 2004 was $1,123,582, or $0.26 per diluted share. The increase in net income was mainly due to a rise in net interest income caused primarily by an increase in loans. Average loans increased 22% during the six months ended June 30, 2005, as compared to the same period last year. Net income for the six months ended June 30, 2005, was $2,538,550 or $0.58 per diluted share, an increase of 24% over the same period last year. Net income for the six months ended June 30, 2004 was $2,042,053 or $0.47 per diluted share. Per share data for 2004 has been adjusted to reflect a 3-for-2 stock split in the form of a 50% stock dividend. The dividend was paid February 24, 2005 to stockholders of record as of February 8, 2005.

Total assets increased 21% since December 31, 2004 and at June 30, 2005, were $667 million; stockholders’ equity was $49 million or $11.39 per share and represented 7.34% of assets.

Cooperative Bankshares, Inc. is the parent company of Cooperative Bank. Chartered in 1898, Cooperative offers services through 20 offices in Eastern North Carolina. The Bank’s subsidiary, Lumina Mortgage, Inc., is a mortgage banking firm, originating and selling residential mortgage loans through three offices in North Carolina; and offices in North Myrtle Beach, South Carolina, and Virginia Beach, Virginia.

Statements in this news release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which contain the words "expects", "intends" and words of similar import, are subject to numerous risks and uncertainties disclosed from time to time in documents the company files with the Securities and Exchange Commission, which could cause actual results to differ materially from the results currently anticipated. Undue reliance should not be placed on such forward-looking statements.

For Additional Information:

Contacts:

Frederick Willetts, III, President

Todd L. Sammons, CPA, Senior Vice President/ CFO

Linda B. Garland, Vice President/ Secretary

910-343-0181