Wilmington, NC, August 31, 2005—Cooperative Bankshares, Inc. (NASDAQ:"COOP") announced that it has completed the issuance of a trust preferred securities financing in the amount of $15.0 million. The securities will be used for general corporate purposes and to increase the regulatory capital of its subsidiary bank. "This offering will strengthen our balance sheet and provide us further leverage to grow Cooperative Bank," said Frederick Willetts, III, Chairman, President and Chief Executive Officer. The company offered the Trust Preferred Securities in a pooled private placement offering.

Cooperative Bankshares, Inc. is the parent company of Cooperative Bank. Chartered in 1898, Cooperative Bank provides a full range of financial services through 20 offices in Eastern North Carolina.

Frederick Willetts, III, President
Todd L. Sammons, CPA
Senior Vice President/ CFO

910-343-0181

SEC Form 8-K has been filed containing additional information.