December 31, 2002

COOPERATIVE BANK COMPLETES CONVERSION TO COMMERCIAL BANK

            Wilmington, North Carolina, December 31, 2002—Cooperative Bankshares, Inc. (NASDAQ: “COOP”) announced today that its banking subsidiary Cooperative Bank, previously known as Cooperative Bank for Savings, Inc., SSB, has completed its previously announced charter conversion from a state chartered savings bank to that of a state chartered commercial bank.  As a result of the charter conversion, the Bank now operates under the name Cooperative Bank.

             Cooperative Bankshares, Inc. will continue to be regulated as a bank holding company by the Federal Reserve.

             Cooperative Bankshares, Inc. is the parent company of Cooperative Bank.  Chartered in 1898, Cooperative provides a full range of financial services through 17 financial centers in Eastern North Carolina.  The Bank’s subsidiary, Lumina Mortgage, Inc. is a mortgage banking firm, originating and selling residential mortgage loans through offices in Wilmington, North Carolina, North Myrtle Beach, South Carolina and Virginia Beach, Virginia.