GBTS Gateway Finl Hldgs (MM)

- New Subsidiary to be in Operation in all Gateway Bank Branches Effective June 1 - ELIZABETH CITY, N.C., May 9 /PRNewswire-FirstCall/ -- Gateway Financial Holdings, Inc. (NASDAQ:GBTS), the holding company for Gateway Bank & Trust Co., has announced the formation of its new subsidiary, Gateway Financial Mortgage, Inc. The full-service mortgage division will be in operation within Gateway's 22 financial centers throughout Virginia and North Carolina effective June 1, 2006. Headquartered in Raleigh, N.C., Gateway Financial Mortgage will deliver a host of competitive residential mortgage products including first-time home buyer, FHA, VA and jumbo loans. The company will also provide its own brand of construction permanent products. Gateway Financial Mortgage will be managed by a group of highly seasoned mortgage lending professionals. Kevin W. Pack, a 15-year veteran in the mortgage lending business, will serve as the company's president and will manage the operation, sales and secondary marketing of the company. D. Ben Berry, chairman and chief executive officer of Gateway Financial Holdings, believes the new division will be a major asset to Gateway's menu of full-service banking services and specialized products. "Our new mortgage division will not only provide our customers with an array of very competitive lending products, but will also clearly position Gateway Bank as a sound, full-service institution with the ability to meet our customers' unique and varied banking needs," said Berry. About the Company Gateway Financial Holdings, Inc. is the parent company of Gateway Bank & Trust Co., a full-service regional community bank with a total of 22 offices - 11 in Virginia: Virginia Beach (6), Chesapeake (2), Suffolk, Norfolk and Emporia; and 11 in North Carolina: Elizabeth City (3), Edenton, Kitty Hawk (2), Moyock, Nags Head, Plymouth, Roper and Raleigh, and a private banking center in Raleigh. The Bank also provides insurance through its Gateway Insurance Services, Inc. subsidiary and brokerage services through its Gateway Investment Services, Inc. subsidiary. As of December 31, 2005, Gateway had assets of $882.4 million. The common stock of the Corporation is traded on the Nasdaq National Market under the symbol GBTS. For further information, visit the Corporation's web site at http://www.gwfh.com/ DATASOURCE: Gateway Financial Holdings, Inc. CONTACT: Lynn Polizos of P+G Communications for Gateway Financial Holdings, Inc., +1-757-641-7357, or Web site: http://www.gwfh.com/

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