8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 19, 2003

Cardinal Bankshares Corporation

(Exact name of registrant as specified in its charter)

Virginia	0-28780	54-1804471
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

101 Jacksonville Circle, PO Box 215 Floyd, Virginia	24091
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (540) 745-4191

(Former name or former address, if changed since last report.)

Item 5.    Other Events.

On December 19, 2003, Cardinal Bankshares Corporation (“Cardinal Bankshares”) issued a news release announcing an increase in its common stock dividend payable on December 31, 2003 to holders of record as of December 23, 2003 (the “News Release”). The News Release is attached as Exhibit 99 to this report and is incorporated into this Item 5 by reference.

Item 7.    Financial Statements and Exhibits.

(c)    Exhibits.

(99)    The News Release.

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This Current Report on Form 8-K (including information included or incorporated by reference herein) may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding certain of Cardinal Bankshares’ goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and statements preceded by, followed by or that include the words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, “projects”, “outlook” or similar expressions. These statements are based upon the current beliefs and expectations of Cardinal Bankshares’ management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond Cardinal Bankshares’ control).

The following factors, among others, could cause Cardinal Bankshares’ financial performance to differ materially from that expressed in such forward-looking statements: (1) the strength of the United States

economy in general and the strength of the local economies in which Cardinal Bankshares conducts operations may be different than expected resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on Cardinal Bankshares’ loan portfolio and allowance for loan losses; (2) the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; (3) inflation, interest rate, market and monetary fluctuations; (4) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions); (5) the timely development of competitive new products and services by Cardinal Bankshares and the acceptance of these products and services by new and existing customers; (6) the willingness of customers to accept third party products marketed by Cardinal Bankshares; (7) the willingness of customers to substitute competitors’ products and services for Cardinal Bankshares’ products and services and vice versa; (8) the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance); (9) technological changes; (10) changes in consumer spending and saving habits; (11) the effect of corporate restructurings, acquisitions and/or dispositions; (12) the growth and profitability of Cardinal Bankshares’ noninterest or fee income being less than expected; (13) unanticipated regulatory or judicial proceedings or rulings; (14) the impact of changes in accounting principles; (15) adverse changes in financial performance and/or condition of Cardinal Bankshares’ borrowers which could impact repayment of such borrowers’ outstanding loans; (16) the impact on Cardinal Bankshares’ businesses, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts; and (17) Cardinal Bankshares’ success at managing the risks involved in the foregoing.

Cardinal Bankshares cautions that the foregoing list of factors is not exclusive. All subsequent written and oral forward-looking statements concerning Cardinal Bankshares or other matters and attributable to Cardinal Bankshares or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Cardinal Bankshares does not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this Current Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CARDINAL BANKSHARES CORPORATION
Date:  December 22, 2003	By:	/s/  Ray A. Fleming
	Name:	Ray A. Fleming
	Title:	Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
(99)	The News Release.

EX-99

Exhibit (99)

Cardinal Bankshares Corporation

101 Jacksonville Circle

Floyd, Virginia 24091

Contact:	Leon Moore	Telephone: (540) 745-4191
	Chairman of the Board and CEO	FAX: (540) 745-4133
	Ray A. Fleming
	Executive Vice President and CFO
December 19, 2003	Traded: OTC Bulletin Board	Symbol: CDBK

For Immediate Release

Cardinal Bankshares Corporation Announces $.25 Per Share Cash Dividend On Common Stock

FLOYD, VA - Cardinal Bankshares Corporation (OTC Bulletin Board: CDBK), parent company for the Bank of Floyd, today announced that its board of directors approved a regular semi-annual cash dividend of $.25 per share. Leon Moore, chairman and chief executive officer reported, “In what has been one of the most challenging years in the history of Cardinal Bankshares, it is gratifying to see our shareholders rewarded with the twelfth consecutive year of increased dividends. Based on the closing market price of Cardinal Bankshares stock on December 17, 2003, the dividend declaration date, total dividends declared for the year of $.47 per share represents a dividend yield of 2.3%, well above the median dividend yield of approximately 1.8% for Virginia banks under $1 billion in assets.”

The cash dividend is payable on December 31, 2003, to shareholders of record as of the close of business on December 23, 2003.

“During 2003, the operating results of Cardinal Bankshares have been dampened by two events that we consider uncharacteristic to the normal operations of the Company. The expenses associated with the proposed merger with MountainBank Financial Corporation that was not ratified by the shareholders in February, and expenses related to defending allegations made by a former employee that his discharge violated the Sarbanes-Oxley Act of 2002, have had a combined impact of approximately $400 thousand, or $270 thousand net of taxes on net income for the year. We are pleased that the board of directors elected to discount the effect of these events on earnings for the year, and express their confidence in the core strength and future growth prospects of the Company in this way.” added Ray Fleming, executive vice president and chief financial officer.

Cardinal Bankshares Corporation (OTC Bulletin Board: CDBK) had assets of $187.1 million and stockholders’ equity of $24.3 million at September 30, 2003. Cardinal provides a wide range of commercial banking services to individuals and small to medium-sized businesses through its main office located in Floyd, Virginia and its branch locations in Christiansburg, Hillsville, Roanoke and Willis, Virginia.

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This press release may contain “forward-looking statements,” within the meaning of federal securities laws, that involve risks and uncertainties. Statements herein are based on certain assumptions and analyses by the Company and other factors it believes are appropriate in the circumstances. However, the Company’s expectations are subject to a number of risks and uncertainties and other factors that could cause actual results, events and developments to differ materially from those contemplated by any forward-looking statements herein. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language in the Company’s most recent Form 10-KSB report and other documents filed with the Securities and Exchange Commission.

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