1095274--3/31/2008--FIRST_NATIONAL_BANCSHARES_INC

related topics

{loan, real, estate}

{condition, economic, financial}

{acquisition, growth, future}

{loss, insurance, financial}

{capital, credit, financial}

{personnel, key, retain}

{regulation, change, law}

{financial, litigation, operation}

{control, financial, internal}

{regulation, government, change}

Changes in interest rates and our ability to successfully manage interest rates may reduce our profitability. Significant risks accompany our recent and continued expansion. Our decisions regarding credit risk may materially and adversely affect our business. We could sustain losses from a decline in credit quality. We have a concentration of credit exposure in commercial real estate and a downturn in commercial real estate could adversely affect our business, financial condition, and results of operations. We have a high concentration of construction and development loans in our loan portfolio, which carry a higher degree of risk than long-term financing of existing properties. A downturn in the real estate market in our market areas could adversely affect our profitability and financial condition. The success of our growth strategy depends on our ability to identify and retain individuals with experience and relationships in the markets in which we intend to expand. We depend on key individuals, and the unexpected loss of one or more of these key individuals could curtail our growth and adversely affect our prospects. Our business strategy includes the continuation and successful management of significant growth, and if we fail to grow or fail to manage our growth effectively as we pursue our strategy, these failures could negatively affect our financial condition and results of operations. The building of market share through our de novo branching strategy could cause our expenses to increase faster than our revenues. The lack of seasoning of our loan portfolio makes it difficult to assess the adequacy of our loan loss reserves accurately. We depend on the accuracy and completeness of information about clients and counterparties and our financial condition could be adversely affected if it relies on misleading information. Our small- to medium-sized business target markets may have fewer financial resources to weather a downturn in the economy. An economic downturn, especially one affecting the market areas of Spartanburg, Charleston, Greenville, Rock Hill, or Columbia, could reduce our customer base, our level of deposits, and demand for financial products such as loans. We may have higher loan losses than we have allowed for in our allowance for loan losses. Our recent operating results may not be indicative of our future operating results. Liquidity needs could adversely affect our financial condition and results of operation. We are subject to extensive regulation that could limit or restrict our activities. Changes in federal laws could adversely affect our wholesale mortgage division. We face strong competition for customers in our market areas, which could prevent us from obtaining customers and may cause us to pay higher interest rates to attract deposits. Our growth may require us to raise additional capital that may not be available when it is needed, or at all. Efforts to comply with the Sarbanes-Oxley Act of 2002 will continue to involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act of 2002 may adversely affect business. We may identify a material weakness or a significant deficiency in our internal control over financial reporting that may adversely affect our ability to properly account for non-routine transactions.

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1095274--3/31/2008--FIRST_NATIONAL_BANCSHARES_INC_/SC/