State Bancorp, Inc. Reports Third Quarter 2010 Results

The Company's capital ratios exceeded all regulatory requirements at September 30, 2010. The Company's tangible common equity to tangible assets ratio (non-GAAP financial measure) was 7.11% at September 30, 2010 versus 7.17% at both September 30, 2009 and June 30, 2010.

The Company did not repurchase any of its common stock during the first nine months of 2010. Under the Board of Directors' existing authorization, up to 512,348 shares may be repurchased from time to time as conditions warrant. The Company does not presently anticipate repurchasing any of its shares in the immediate future.

Corporate Information

State Bancorp, Inc. is the holding company for State Bank of Long Island. In addition to its seventeen branches located in Nassau, Suffolk, Queens and Manhattan, the Bank maintains its corporate headquarters in Jericho. The Bank has built a reputation for providing high-quality personal service to meet the needs of our diverse customer base which includes commercial real estate owners and developers, small to middle market businesses, professional service firms, municipalities and consumers. The Bank maintains a web site at www.statebankofli.com with corporate, investor and branch banking information.

Non-GAAP Disclosure

This press release includes a non-GAAP financial measure of our tangible common equity. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by generally accepted accounting principles in the United States (GAAP). The Company believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and the Company's marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP.

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.

STATE BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2010 and 2009 (unaudited)
(in thousands, except per share data)
	Three Months		Nine Months
	2010	2009	2010	2009
Interest Income:
Interest and fees on loans	$15,426	$15,398	$46,122	$45,034
Federal funds sold and securities purchased under agreements to resell	--	--	2	6
Securities held to maturity - taxable	41	--	41	--
Securities available for sale - taxable	3,472	4,126	11,627	13,325
Securities available for sale - tax-exempt	25	15	79	66
Dividends on Federal Home Loan Bank and other restricted stock	25	35	88	74
Total interest income	18,989	19,574	57,959	58,505
Interest Expense:
Deposits	2,471	3,218	7,601	10,588
Temporary borrowings	21	25	69	89
Senior unsecured debt	280	280	841	563
Subordinated notes	--	231	--	693
Junior subordinated debentures	188	213	546	666
Total interest expense	2,960	3,967	9,057	12,599
Net interest income	16,029	15,607	48,902	45,906
Provision for loan losses	2,500	3,000	10,200	16,500
Net interest income after provision for loan losses	13,529	12,607	38,702	29,406
Non-Interest Income:
Service charges on deposit accounts	467	504	1,372	1,690
Other-than-temporary impairment losses on securities	--	--	--	(4,000)
Net gains on sales of securities	733	486	3,514	1,168
Income from bank owned life insurance	107	182	353	554
Other operating income	713	622	1,329	1,225
Total non-interest income	2,020	1,794	6,568	637
Income before operating expenses	15,549	14,401	45,270	30,043
Operating Expenses:
Salaries and other employee benefits	5,959	5,926	18,553	17,223
Occupancy	1,349	1,392	4,159	4,341
Equipment	302	307	875	909
Marketing and advertising	377	--	1,283	750
FDIC and NYS assessment	697	657	2,053	2,971
Other operating expenses	1,872	3,059	5,810	6,843
Total operating expenses	10,556	11,341	32,733	33,037
Income (Loss) Before Income Taxes	4,993	3,060	12,537	(2,994)
Provision (benefit) for income taxes	1,783	1,119	4,651	(914)
Net Income (Loss)	3,210	1,941	7,886	(2,080)
Preferred dividends and accretion	517	515	1,553	1,544
Net Income (Loss) Attributable to Common Stockholders	$2,693	$1,426	$6,333	($3,624)
Net Income (Loss) per Common Share - Basic	$0.17	$0.10	$0.39	($0.25)
Net Income (Loss) per Common Share - Diluted	$0.17	$0.10	$0.39	($0.25)

STATE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2010 and 2009 (unaudited)
(in thousands, except share and per share data)
	2010	2009
Assets:
Cash and due from banks	$37,026	$35,992
Securities held to maturity (estimated fair value of $22,000 in 2010)	22,000	--
Securities available for sale - at estimated fair value	404,160	395,022
Federal Home Loan Bank and other restricted stock	7,273	8,036
Loans (net of allowance for loan losses of $32,488 in 2010 and $29,401 in 2009)	1,081,075	1,078,794
Loans held for sale	--	9,302
Bank premises and equipment - net	6,357	6,562
Bank owned life insurance	30,946	30,452
Net deferred income taxes	24,326	18,453
Receivable - securities sales	13,393	--
Prepaid FDIC assessment	5,963	--
Other assets	12,758	13,851
Total Assets	$1,645,277	$1,596,464
Liabilities:
Deposits:
Demand	$336,251	$363,047
Savings	642,648	536,011
Time	406,808	408,904
Total deposits	1,385,707	1,307,962
Other temporary borrowings	43,000	63,000
Senior unsecured debt	29,000	29,000
Subordinated notes	--	10,000
Junior subordinated debentures	20,620	20,620
Other accrued expenses and liabilities	12,701	14,323
Total Liabilities	1,491,028	1,444,905
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	36,188	35,962
Common stock, $0.01 par value, authorized 50,000,000 shares in 2010 and 20,000,000 shares in 2009; issued 17,483,809 shares in 2010 and 15,615,889 shares in 2009; outstanding 16,660,790 shares in 2010 and 14,632,874 shares in 2009	175	156
Warrant	1,057	1,057
Surplus	178,820	167,690
Retained deficit	(53,582)	(43,445)
Treasury stock (823,019 shares in 2010 and 983,015 shares in 2009)	(13,872)	(16,568)
Accumulated other comprehensive income (net of taxes of $3,597 in 2010 and $4,415 in 2009)	5,463	6,707
Total Stockholders' Equity	154,249	151,559
Total Liabilities and Stockholders' Equity	$1,645,277	$1,596,464

STATE BANCORP, INC.
SELECTED FINANCIAL DATA
For the Three and Nine Months Ended September 30, 2010 and 2009 (unaudited)
(dollars in thousands, except share and per share data)
	Three Months				Nine Months
	2010		2009		2010		2009
Selected Average Balances (1):
Total assets	$1,627,183		$1,622,824		$1,633,943		$1,633,263
Loans - net of unearned income	$1,100,592		$1,121,278		$1,104,728		$1,118,428
Investment securities	$407,254		$388,060		$406,470		$391,486
Deposits	$1,391,822		$1,382,761		$1,401,882		$1,398,558
Stockholders' equity	$154,712		$150,076		$152,932		$150,782
Financial Performance Ratios:
Return on average assets	0.78	%	0.47	%	0.65	%	(0.17)	%
Return on average common stockholders' equity	9.09	%	5.01	%	7.31	%	(4.26)	%
Net interest margin	4.16	%	4.06	%	4.27	%	3.99	%
Operating efficiency ratio	60.70	%	66.60	%	62.71	%	66.42	%
Operating expenses as a % of average assets	2.57	%	2.77	%	2.68	%	2.70	%
Capital Ratios (2):
Tier I leverage ratio	9.33	%	9.25	%	9.33	%	9.25	%
Tier I risk-based capital ratio	12.03	%	11.95	%	12.03	%	11.95	%
Total risk-based capital ratio	13.29	%	13.70	%	13.29	%	13.70	%
Tangible common equity ratio (3)	7.11	%	7.17	%	7.11	%	7.17	%
Asset Quality Summary:
Non-accrual loans (2)	$9,107		$34,656		$9,107		$34,656
Loans 90 days or more past due and still accruing (2)	1		7		1		7
Total non-performing loans (2)	$9,108		$34,663		$9,108		$34,663
Non-accrual loans/total loans (2)	0.82	%	3.10	%	0.82	%	3.10	%
Non-performing loans/total loans (2)	0.82	%	3.10	%	0.82	%	3.10	%
Allowance for loan losses/non-accrual loans (2) (4)	357	%	116	%	357	%	116	%
Allowance for loan losses/non-performing loans (2) (4)	357	%	116	%	357	%	116	%
Allowance for loan losses/total loans (2) (4)	2.92	%	2.65	%	2.92	%	2.65	%
Net charge-offs	$1,271		$1,553		$6,423		$5,767
Net charge-offs (annualized)/average loans	0.46	%	0.55	%	0.78	%	0.69	%
Common Share Data:
Average common shares outstanding	16,303,237		14,375,032		16,243,505		14,355,838
Period-end common shares outstanding	16,660,790		14,632,874		16,660,790		14,632,874
Tangible book value per common share (2)	$7.02		$7.83		$7.02		$7.83
Cash dividends per common share	$0.05		$0.05		$0.15		$0.15
(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 September 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	$154,249		Total assets				$1,645,277
Less: preferred stock	(36,188)		Less: intangible assets				--
Less: warrant	(1,057)		Tangible assets				$1,645,277
Total common stockholders' equity	117,004
Less: intangible assets	--
Tangible common equity	$117,004
(4) Excluding loans held for sale.

STATE BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Three Months Ended September 30, 2010 and 2009 (unaudited)
(dollars in thousands)
	2010			2009
	Average		Average	Average		Average
	Balance (1)	Interest	Yield/Cost	Balance (1)	Interest	Yield/Cost
Assets:
Interest-earning assets:
Securities (2)	$407,254	$3,542	3.45%	$388,060	$4,146	4.24%
Federal Home Loan Bank and other restricted stock	5,764	25	1.72	5,769	35	2.41
Interest-bearing deposits	15,848	7	0.18	10,677	3	0.11
Loans (3)	1,100,592	15,436	5.56	1,121,278	15,409	5.45
Total interest-earning assets	1,529,458	$19,010	4.93%	1,525,784	$19,593	5.09%
Non-interest-earning assets	97,725			97,040
Total Assets	$1,627,183			$1,622,824
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits	$617,206	$894	0.57%	$589,269	$1,145	0.77%
Time deposits	420,366	1,577	1.49	439,151	2,073	1.87
Total savings and time deposits	1,037,572	2,471	0.94	1,028,420	3,218	1.24
Other temporary borrowings	9,467	21	0.88	12,630	25	0.79
Senior unsecured debt	29,000	280	3.83	29,000	280	3.83
Subordinated notes	--	--	--	10,000	231	9.16
Junior subordinated debentures	20,620	188	3.62	20,620	213	4.10
Total interest-bearing liabilities	1,096,659	2,960	1.07	1,100,670	3,967	1.43
Demand deposits	354,250			354,341
Other liabilities	21,562			17,737
Total Liabilities	1,472,471			1,472,748
Stockholders' Equity	154,712			150,076
Total Liabilities and Stockholders' Equity	$1,627,183			$1,622,824
Net interest income/margin		16,050	4.16%		15,626	4.06%
Less tax-equivalent basis adjustment		(21)			(19)
Net interest income		$16,029			$15,607
(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 $11 and $9 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 $10 in 2010 and 2009, respectively.

STATE BANCORP, INC.
NET INTEREST INCOME ANALYSIS
For the Nine Months Ended September 30, 2010 and 2009 (unaudited)
(dollars in thousands)
	2010			2009
	Average		Average	Average		Average
	Balance (1)	Interest	Yield/Cost	Balance (1)	Interest	Yield/Cost
Assets:
Interest-earning assets:
Securities (2)	$406,470	$11,763	3.87%	$391,486	$13,398	4.58%
Federal Home Loan Bank and other restricted stock	5,799	88	2.03	5,734	74	1.73
Securities purchased under agreements to resell	1,183	2	0.23	6,538	6	0.12
Interest-bearing deposits	13,985	18	0.17	18,122	24	0.18
Loans (3)	1,104,728	46,152	5.59	1,118,428	45,080	5.39
Total interest-earning assets	1,532,165	$58,023	5.06%	1,540,308	$58,582	5.08%
Non-interest-earning assets	101,778			92,955
Total Assets	$1,633,943			$1,633,263
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Savings deposits	$606,191	$2,815	0.62%	$596,774	$3,578	0.80%
Time deposits	429,115	4,786	1.49	461,524	7,010	2.03
Total savings and time deposits	1,035,306	7,601	0.98	1,058,298	10,588	1.34
Federal funds purchased	59	--	--	300	1	0.45
Securities sold under agreements to repurchase	--	--	--	1,154	4	0.46
Other temporary borrowings	11,227	69	0.82	15,681	84	0.72
Senior unsecured debt	29,000	841	3.88	19,546	563	3.85
Subordinated notes	--	--	--	10,000	693	9.27
Junior subordinated debentures	20,620	546	3.54	20,620	666	4.32
Total interest-bearing liabilities	1,096,212	9,057	1.10	1,125,599	12,599	1.50
Demand deposits	366,576			340,260
Other liabilities	18,223			16,622
Total Liabilities	1,481,011			1,482,481
Stockholders' Equity	152,932			150,782
Total Liabilities and Stockholders' Equity	$1,633,943			$1,633,263
Net interest income/margin		48,966	4.27%		45,983	3.99%
Less tax-equivalent basis adjustment		(64)			(77)
Net interest income		$48,902			$45,906
(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 $34 and $31 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 $30 and $46 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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