1353523--3/31/2010--Congaree_Bancshares

related topics

{loan, real, estate}

{condition, economic, financial}

{stock, price, share}

{loss, insurance, financial}

{acquisition, growth, future}

{regulation, change, law}

{capital, credit, financial}

{financial, litigation, operation}

{system, service, information}

{personnel, key, retain}

{investment, property, distribution}

{debt, indebtedness, cash}

Difficult market conditions in our market and economic trends have adversely affected our industry and our business and may continue to do so. A significant portion of our loan portfolio is secured by real estate, and events that negatively affect the real estate market could hurt our business. We are exposed to higher credit risk by commercial real estate, construction, and commercial lending. Our decisions regarding credit risk and reserves for loan losses may materially and adversely affect our business. Lack of seasoning of our loan portfolio may increase the risk of credit defaults in the future. Our net interest income could be negatively affected by the lower level of short-term interest rates, recent developments in the credit and real estate markets and competition in our market area. We expect to receive a consent order that will require us to take certain actions. Recent legislative and regulatory initiatives to address the current difficult market and economic conditions may not achieve the desired effect. Regulatory reform of the U.S. banking system may adversely affect us. We could experience an unexpected inability to obtain needed liquidity. Because of our participation in the Treasury Department s Capital Purchase Program, we are subject to several restrictions including restrictions on compensation paid to our executives. Legislation or regulatory changes could cause us to seek to repurchase the preferred stock that we sold to the U.S. Treasury pursuant to the Capital Purchase Program. The securities purchase agreement between us and the Treasury limits our ability to pay dividends on and repurchase our common stock. Higher FDIC Deposit Insurance premiums and assessments that we are required to pay could have an adverse effect on our earnings and our ability to pay our liabilities as they come due. Our small to medium-sized business target markets may have fewer financial resources to weather a downturn in the economy. We depend on the accuracy and completeness of information about clients and counterparties and our financial condition could be adversely affected if we rely on misleading information. We are dependent on key individuals and the loss of one or more of these key individuals could curtail our growth and adversely affect our prospects. The costs of being an SEC registered company are proportionately higher for smaller companies like us because of the requirements imposed by the Sarbanes-Oxley Act. Our continued operations and future growth may require us to raise additional capital in the future, but that capital may not be available when it is needed. We face strong competition for clients, which could prevent us from obtaining clients and may cause us to pay higher interest rates to attract deposits. We will face risks with respect to future expansion and acquisitions or mergers. We are exposed to the possibility of technology failure and a disruption in our operations may adversely affect our business.

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1353523--3/31/2010--Congaree_Bancshares_Inc