Yadkin Valley Financial Corp. in Elkin, N.C., said its purchase of the $193 million-asset Cardinal State Bank has been delayed until the first quarter of 2008 as Cardinal decides how to handle its unrecorded liability for post-retirement health-care benefits.

When the $41.8 million cash and stock deal was announced in June, Yadkin Valley expected the deal to close in the fourth quarter.

The post-retirement health-care benefits are part of the employment agreements Cardinal, a Durham, N.C., institution, entered into in 2001 with its senior executives.

Though these benefits were not accrued on Cardinal's financial statements, the $1.1 billion-asset Yadkin Valley said in a press release, it was aware of the liability and took it into account when negotiating the deal's terms.

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