1325670--3/8/2010--Southern_National_Bancorp_of_Virginia

related topics

{loan, real, estate}

{condition, economic, financial}

{competitive, industry, competition}

{acquisition, growth, future}

{loss, insurance, financial}

{regulation, government, change}

{tax, income, asset}

{product, market, service}

{personnel, key, retain}

{control, financial, internal}

We have a limited operating history, which makes it difficult to predict future prospects and financial performance. Difficult market conditions and economic trends have adversely affected the banking industry and could adversely affect our business, financial condition and results of operations. Liquidity risk could impair our ability to fund operations and jeopardize our financial condition, results of operations and cash flows. Sonabank s reliance on brokered deposits could adversely affect its liquidity and results of operations. Declines in asset values may result in impairment charges and adversely affect the value of our investments, financial performance and capital. The failure of other financial institutions could adversely affect us. If the goodwill that we recorded in connection with business acquisitions becomes impaired, it could have a negative impact on our profitability. A significant amount of our loans are secured by real estate and the continued economic slowdown and depressed residential real estate market in our primary markets could be detrimental to our financial condition and results of operations. If the value of real estate in our market areas were to decline materially, a significant portion of our loan portfolio could become under-collateralized, which could have a material adverse effect on our asset quality, capital structure and profitability. We are subject to risks related to our concentration of construction and land development and commercial real estate loans. Changes to government guaranteed loan programs could affect our SBA business. Because we began operations in 2005, there is limited repayment history against which we can fully assess the adequacy of our allowance for loan losses. If our allowance for loan losses is not adequate to cover actual loan losses, our earnings will decrease. Our business strategy includes strategic growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Future growth or operating results may require us to raise additional capital, but that capital may not be available or it may be dilutive. Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance. We may be required to pay significantly higher FDIC deposit insurance premiums and assessments in the future. A loss of our executive officers could impair our relationship with our customers and adversely affect our business. Our profitability depends significantly on local economic conditions in the areas where our operations and loans are concentrated. The properties that we own and our foreclosed real estate assets could subject us to environmental risks and associated costs. The small to medium-sized businesses we lend to may have fewer resources to weather a downturn in the economy, which may impair a borrower s ability to repay a loan to us that could materially harm our operating results. We are heavily regulated by federal and state agencies; changes in laws and regulations or failures to comply with such laws and regulations may adversely affect our operations and our financial results. As a regulated entity, Sonabank must maintain certain required levels of regulatory capital that may limit our operations and potential growth. We may not be able to successfully compete with others for business. We are subject to transaction risk, which could adversely affect our business, financial condition and results of operation. We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated.

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1325670--3/8/2010--Southern_National_Bancorp_of_Virginia_Inc