723458--3/12/2010--STATE_BANCORP

related topics

{capital, credit, financial}

{regulation, change, law}

{tax, income, asset}

{condition, economic, financial}

{competitive, industry, competition}

{acquisition, growth, future}

{loan, real, estate}

{product, market, service}

{loss, insurance, financial}

{stock, price, share}

{personnel, key, retain}

{control, financial, internal}

Banking laws and regulations could limit our access to funds from the Bank, one of our primary sources of liquidity. Commercial real estate and commercial business loans expose us to increased lending risks. Our results of operations are affected by economic conditions in the New York metropolitan area and nationally. Changes in economic conditions or interest rates may negatively affect our earnings, capital and liquidity. Strong competition within our market areas could hurt our profits and slow growth. We operate in a highly regulated industry, which limits the manner and scope of our business activities. Changes in banking laws could have a material adverse effect on us. There can be no assurance that recently enacted legislation and related regulatory actions will stabilize the U.S. financial system. Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition. As a participant in the Treasury s Capital Purchase Program, we are subject to several restrictions including restrictions on our ability to declare or pay dividends and repurchase our shares as well as restrictions on our executive compensation. The loss of key personnel could impair the Bank s future success. If our investment in the Federal Home Loan Bank of New York is classified as other-than-temporarily impaired or as permanently impaired, our earnings and stockholders equity could decrease. Alternatives to deposits as a funding source may become more expensive. We continually encounter technological change, and may have fewer resources than our competitors to continue to invest in technological improvements. We experienced a net loss for the fourth quarter of 2009, resulting in a net loss for the year ended December 31, 2009, and we can provide no assurance that additional losses will not be realized in future periods. If the actual amount of future taxable income is less than what we are currently projecting, it may be necessary to record a valuation allowance for our deferred tax asset in a future period. The Company s future growth and liquidity needs may require the Company to raise additional capital in the future, but that capital may not be available when it is needed or may be available at an excessive cost. The adoption of proposed regulatory reform legislation may have a material effect on our operations.

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723458--3/12/2010--STATE_BANCORP_INC