State Bancorp, Inc. Reports Second Quarter 2010 Results

Forward-Looking Statements and Risk Factors

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "is confident that," and similar expressions are intended to identify forward-looking statements. The forward-looking statements involve risk and uncertainty and a variety of factors that could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in: market interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, the quality and composition of the loan or investment portfolios, demand for loan products, demand for financial services in the Company's primary trade area, litigation, tax and other regulatory matters, accounting principles and guidelines, other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing and services and those risks detailed in the Company's periodic reports filed with the SEC. Investors are encouraged to access the Company's periodic reports filed with the SEC for financial and business information regarding the Company at www.statebankofli.com . The Company undertakes no obligation to publish revised events or circumstances after the date hereof.

Financial Highlights Follow

STATE BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2010 and 2009 (unaudited)
(in thousands, except per share data)
	Three Months		Six Months
	2010	2009	2010	2009
Interest Income:
Interest and fees on loans	$15,074	$14,745	$30,696	$29,636
Federal funds sold and securities purchased under agreements to resell	2	5	2	6
Securities available for sale:
Taxable	3,785	4,367	8,155	9,199
Tax-exempt	27	17	54	51
Dividends on Federal Home Loan Bank and other restricted stock	28	28	63	39
Total interest income	18,916	19,162	38,970	38,931
Interest Expense:
Deposits	2,549	3,391	5,130	7,370
Temporary borrowings	16	29	48	64
Senior unsecured debt	281	280	561	283
Subordinated notes	--	231	--	462
Junior subordinated debentures	182	212	358	453
Total interest expense	3,028	4,143	6,097	8,632
Net interest income	15,888	15,019	32,873	30,299
Provision for loan losses	5,450	3,500	7,700	13,500
Net interest income after provision for loan losses	10,438	11,519	25,173	16,799
Non-Interest Income:
Service charges on deposit accounts	455	596	905	1,186
Other-than-temporary impairment losses on securities	--	--	--	(4,000)
Net gains on sales of securities	2,525	447	2,781	682
Income from bank owned life insurance	104	264	246	372
Other operating income	302	239	616	603
Total non-interest income	3,386	1,546	4,548	(1,157)
Income before operating expenses	13,824	13,065	29,721	15,642
Operating Expenses:
Salaries and other employee benefits	6,598	5,960	12,594	11,297
Occupancy	1,391	1,448	2,810	2,949
Equipment	269	297	573	602
Marketing and advertising	453	475	906	750
FDIC and NYS assessment	684	1,276	1,356	2,314
Other operating expenses	1,786	2,078	3,938	3,784
Total operating expenses	11,181	11,534	22,177	21,696
Income (Loss) Before Income Taxes	2,643	1,531	7,544	(6,054)
Provision (benefit) for income taxes	984	459	2,868	(2,033)
Net Income (Loss)	1,659	1,072	4,676	(4,021)
Preferred dividends and accretion	518	514	1,036	1,029
Net Income (Loss) Attributable to Common Stockholders	$1,141	$558	$3,640	($5,050)
Net Income (Loss) per Common Share - Basic	$0.07	$0.04	$0.22	($0.35)
Net Income (Loss) per Common Share - Diluted	$0.07	$0.04	$0.22	($0.35)

STATE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2010 and 2009 (unaudited)
(in thousands, except share and per share data)
	2010	2009
Assets:
Cash and due from banks	$64,593	$86,198
Securities purchased under agreements to resell	--	5,000
Total cash and cash equivalents	64,593	91,198
Securities available for sale - at estimated fair value	369,125	389,536
Federal Home Loan Bank and other restricted stock	5,473	5,336
Loans (net of allowance for loan losses of $31,259 in 2010 and $27,954 in 2009)	1,069,765	1,087,024
Loans held for sale	319	11,620
Bank premises and equipment - net	6,227	6,503
Bank owned life insurance	30,839	30,270
Net deferred income taxes	25,325	20,237
Receivable - securities sales	23,626	--
Prepaid FDIC assessment	6,486	--
Other assets	13,107	14,558
Total Assets	$1,614,885	$1,656,282
Liabilities:
Deposits:
Demand	$381,434	$341,698
Savings	566,970	616,379
Time	440,437	468,954
Total deposits	1,388,841	1,427,031
Other temporary borrowings	3,000	3,000
Senior unsecured debt	29,000	29,000
Subordinated notes	--	10,000
Junior subordinated debentures	20,620	20,620
Payable - securities purchases	7,996	4,158
Other accrued expenses and liabilities	12,477	13,654
Total Liabilities	1,461,934	1,507,463
Commitments and Contingent Liabilities
Stockholders' Equity:
Preferred stock, $0.01 par value, authorized 250,000 shares; 36,842 shares issued and outstanding; liquidation preference of $36,842	36,131	35,908
Common stock, $0.01 par value, authorized 50,000,000 shares in 2010 and 20,000,000 shares in 2009; issued 17,479,978 shares in 2010 and 15,586,700 shares in 2009; outstanding 16,656,959 shares in 2010 and 14,599,048 shares in 2009	175	156
Warrant	1,057	1,057
Surplus	178,450	167,433
Retained deficit	(55,442)	(44,141)
Treasury stock (823,019 shares in 2010 and 987,652 shares in 2009)	(13,872)	(16,646)
Accumulated other comprehensive income (net of taxes of $4,247 in 2010 and $3,326 in 2009)	6,452	5,052
Total Stockholders' Equity	152,951	148,819
Total Liabilities and Stockholders' Equity	$1,614,885	$1,656,282

STATE BANCORP, INC.
SELECTED FINANCIAL DATA
For the Three and Six Months Ended June 30, 2010 and 2009 (unaudited)
(dollars in thousands, except share and per share data)
	Three Months		Six Months
	2010	2009	2010	2009
Selected Average Balances (1):
Total assets	$1,655,895	$1,653,838	$1,637,379	$1,638,569
Loans - net of unearned income	$1,112,155	$1,116,045	$1,106,830	$1,116,980
Investment securities	$397,547	$390,919	$406,072	$393,228
Deposits	$1,428,089	$1,407,766	$1,406,995	$1,406,587
Stockholders' equity	$152,855	$148,929	$152,027	$151,141
Financial Performance Ratios:
Return on average assets	0.40%	0.26%	0.58%	(0.49)%
Return on average common stockholders' equity	3.96%	2.00%	6.39%	(8.91)%
Net interest margin	4.16%	3.88%	4.33%	3.96%
Operating efficiency ratio	66.45%	70.87%	63.71%	66.33%
Operating expenses as a % of average assets	2.71%	2.80%	2.73%	2.67%
Capital Ratios (2):
Tier I leverage ratio	8.93%	8.98%	8.93%	8.98%
Tier I risk-based capital ratio	12.02%	11.48%	12.02%	11.48%
Total risk-based capital ratio	13.28%	13.52%	13.28%	13.52%
Tangible common equity ratio (3)	7.17%	6.75%	7.17%	6.75%
Asset Quality Summary:
Non-accrual loans (2)	$7,367	$34,602	$7,367	$34,602
Non-accrual loans/total loans (2)	0.67%	3.07%	0.67%	3.07%
Allowance for loan losses/non-accrual loans (2) (4)	444%	122%	444%	122%
Allowance for loan losses/total loans (2) (4)	2.84%	2.51%	2.84%	2.51%
Net (recoveries) charge-offs	($279)	$1,443	$5,152	$4,214
Net (recoveries) charge-offs (annualized)/average loans	(0.10)%	0.52%	0.94%	0.76%
Common Share Data:
Average common shares outstanding	16,288,409	14,356,607	16,213,144	14,346,083
Period-end common shares outstanding	16,656,959	14,599,048	16,656,959	14,599,048
Tangible book value per common share (2)	$6.95	$7.66	$6.95	$7.66
Cash dividends per common share	$0.05	$0.05	$0.10	$0.10
(1) Weighted daily average balance for period noted.
(2) At period end.
(3) The ratio of tangible common equity to tangible assets, or TCE ratio, is calculated by dividing total common stockholders' equity by total assets, after reducing both amounts by intangible assets. The TCE ratio is not required by GAAP or by applicable bank regulatory requirements, but is a metric used by management to evaluate the adequacy of our capital levels. Since there is no authoritative requirement to calculate the TCE ratio, our TCE ratio is not necessarily comparable to similar capital measures disclosed or used by other companies in the financial services industry. Tangible common equity and tangible assets are non-GAAP financial measures and should be considered in addition to, not as a substitute for or superior to, financial measures determined in accordance with GAAP. With respect to the calculation of the actual unaudited TCE ratio as of June 30, 2010, reconciliations of tangible common equity to GAAP total common stockholders' equity and tangible assets to GAAP total assets are set forth below:
Total stockholders' equity	$152,951	Total assets		$1,614,885
Less: preferred stock	(36,131)	Less: intangible assets		--
Less: warrant	(1,057)	Tangible assets		$1,614,885
Total common stockholders' equity	115,763
Less: intangible assets	--
Tangible common equity	$115,763
(4) Excluding loans held for sale.

STATE BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Three Months Ended June 30, 2010 and 2009 (unaudited)
(dollars in thousands)
	2010			2009
	Average  Balance (1)	Interest	Average  Yield/Cost	Average  Balance (1)	Interest	Average  Yield/Cost
Assets:
Interest-earning assets:
Securities (2)	$397,547	$3,818	3.85%	$390,919	$4,379	4.49%
Federal Home Loan Bank and other restricted stock	5,552	28	2.02	5,952	28	1.89
Securities purchased under agreements to resell	3,549	2	0.23	13,077	5	0.15
Interest-bearing deposits	14,936	6	0.16	28,930	15	0.21
Loans (3)	1,112,155	15,084	5.44	1,116,045	14,756	5.30
Total interest-earning assets	1,533,739	$18,938	4.95%	1,554,923	$19,183	4.95%
Non-interest-earning assets	122,156			98,915
Total Assets	$1,655,895			$1,653,838
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits	$607,217	$942	0.62%	$622,900	$1,199	0.77%
Time deposits	442,458	1,607	1.46	445,114	2,192	1.98
Total savings and time deposits	1,049,675	2,549	0.97	1,068,014	3,391	1.27
Federal funds purchased	--	--	--	--	--	--
Securities sold under agreements to repurchase	--	--	--	1,099	1	0.36
Other temporary borrowings	4,791	16	1.34	16,945	28	0.66
Senior unsecured debt	29,000	281	3.89	29,000	280	3.87
Subordinated notes	--	--	--	10,000	231	9.27
Junior subordinated debentures	20,620	182	3.54	20,620	212	4.12
Total interest-bearing liabilities	1,104,086	3,028	1.10	1,145,678	4,143	1.45
Demand deposits	378,415			339,753
Other liabilities	20,539			19,478
Total Liabilities	1,503,040			1,504,909
Stockholders' Equity	152,855			148,929
Total Liabilities and Stockholders' Equity	$1,655,895			$1,653,838
Net interest income/margin		15,910	4.16%		15,040	3.88%
Less tax-equivalent basis adjustment		(22)			(21)
Net interest income		$15,888			$15,019
(1) Weighted daily average balance for period noted.
(2) Interest on securities includes the effects of tax-equivalent basis adjustments, using a 34% tax rate. Tax-equivalent basis adjustments were $12 and $10 in 2010 and 2009, respectively.
(3) Interest on loans includes the effects of tax-equivalent basis adjustments, using a 34% tax rate. Tax-equivalent basis adjustments were $10 and $11 in 2010 and 2009, respectively.

STATE BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Six Months Ended June 30, 2010 and 2009 (unaudited)
(dollars in thousands)
	2010			2009
	Average Balance (1)	Interest	Average Yield/Cost	Average Balance (1)	Interest	Average Yield/Cost
Assets:
Interest-earning assets:
Securities (2)	$406,072	$8,223	4.08%	$393,228	$9,252	4.74%
Federal Home Loan Bank and other restricted stock	5,817	63	2.18	5,716	39	1.38
Securities purchased under agreements to resell	1,785	2	0.23	9,862	6	0.12
Interest-bearing deposits	13,038	10	0.15	21,905	21	0.19
Loans (3)	1,106,830	30,716	5.60	1,116,980	29,671	5.36
Total interest-earning assets	1,533,542	$39,014	5.13%	1,547,691	$38,989	5.08%
Non-interest-earning assets	103,837			90,878
Total Assets	$1,637,379			$1,638,569
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits	$600,592	$1,921	0.65%	$600,589	$2,433	0.82%
Time deposits	433,562	3,209	1.49	472,896	4,937	2.11
Total savings and time deposits	1,034,154	5,130	1.00	1,073,485	7,370	1.38
Federal funds purchased	88	--	--	453	1	0.45
Securities sold under agreements to repurchase	--	--	--	1,740	4	0.46
Other temporary borrowings	12,122	48	0.80	17,232	59	0.69
Senior unsecured debt	29,000	561	3.90	14,740	283	3.87
Subordinated notes	--	--	--	10,000	462	9.32
Junior subordinated debentures	20,620	358	3.50	20,620	453	4.43
Total interest-bearing liabilities	1,095,984	6,097	1.12	1,138,270	8,632	1.53
Demand deposits	372,841			333,102
Other liabilities	16,527			16,056
Total Liabilities	1,485,352			1,487,428
Stockholders' Equity	152,027			151,141
Total Liabilities and Stockholders' Equity	$1,637,379			$1,638,569
Net interest income/margin		32,917	4.33%		30,357	3.96%
Less tax-equivalent basis adjustment		(44)			(58)
Net interest income		$32,873			$30,299
(1) Weighted daily average balance for period noted.
(2) Interest on securities includes the effects of tax-equivalent basis adjustments, using a 34% tax rate. Tax-equivalent basis adjustments were $24 and $23 in 2010 and 2009, respectively.
(3) Interest on loans includes the effects of tax-equivalent basis adjustments, using a 34% tax rate. Tax-equivalent basis adjustments were $20 and $35 in 2010 and 2009, respectively.

CONTACT:  State Bancorp, Inc.
          Brian K. Finneran, Chief Financial Officer
            516-465-2251
            [e-mail]
          Anthony J. Morris, Chief Marketing &
           Corporate Planning Officer
            516-495-5098
            [e-mail]

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