1362719--3/14/2008--Silver_State

related topics

{loan, real, estate}

{acquisition, growth, future}

{condition, economic, financial}

{personnel, key, retain}

{operation, international, foreign}

{loss, insurance, financial}

{capital, credit, financial}

{control, financial, internal}

{regulation, government, change}

Our current primary market area is substantially dependent on gaming and tourism revenue, and a downturn in gaming or tourism could hurt our business and our prospects. The greater Las Vegas and Phoenix/Scottsdale economies each have grown dramatically during the past several years. The failure of these economies to sustain such growth in the future could seriously affect Silver State s ability to grow. Changes in interest rates could adversely affect our results of operations and financial condition. Because we compete primarily on the basis of the interest rates we offer depositors and the terms of loans we offer borrowers, our margins could decrease if we are required to increase deposit rates or lower interest rates on loans in response to competitive pressures. Our growth and expansion strategy may not prove to be successful and our market value and profitability may suffer. We may have difficulty managing our growth, which may divert resources and limit our ability to expand our operations successfully. Our growth could be hindered unless we are able to recruit additional qualified employees. Our business would be harmed if we lost the services of one or more of our senior management team or senior relationship bankers. We have a limited operating history and have not been through a variety of business cycles. This makes it difficult to evaluate our future prospects and may increase the risk that we will continue to be successful. Changes in the regulation of financial services companies could adversely affect our business. Many of our loans have been made recently, and in certain circumstances 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 dependence on loans secured by real estate subjects us to risks relating to fluctuations in the real estate market and related interest rates, environmental risks and legislation that could result in significant additional costs and capital requirements that could adversely affect our assets and results of operations. Our concentration in real estate construction and land loans subjects us to risks such as inadequate security for repayment of those loans and fluctuations in the demand for those loans based on changes in the real estate market. Our non-interest income is significantly affected by our continued ability to originate, sell and service SBA loans. Our business is subject to liquidity risk, and changes in our source of funds may adversely affect our performance and financial condition by increasing our cost of funds. A large percentage of our deposits is attributable to a relatively small number of customers. Several of our large deposit customers have deposit balances that can fluctuate significantly. The loss of even a few of these customers or a significant decline in their deposit balances may have a material adverse effect on our liquidity and results of operations. Our business and results of operations could be harmed due to litigation associated with the collapse of Southwest Exchange, Inc. or Southwest Exchange.

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1362719--3/14/2008--Silver_State_Bancorp