Description

12/8/2000

1. STATE BANCORP, INC./NY (STB 13- 13 1/4) is a bank holding company for the State Bank of Long Island, offering consumer, commercial, and municipal banking services. Total assets over 934 million and deposits over 841 million, now with 11 branches with two just opened in late 1997 and one opening this month in Mineola. This Bank has shown earnings growth each of the past 29 years, quite remarkable. Return on assets at 1.12% and climbing. Look for earnings of $1.50+ in the year 2001. The Bank signed an agreement with United States Trust Company of New York 2 years ago, to provide a full range of investment management, estate planning and trust services to State Bank’s high net worth clients and prospects. This has paid off with non-interest income up over 25% in the last 9 months. U.S.Trust is the nation’s oldest investment management and trust company. The allowance for loan losses as a percentage of loans outstanding was very strong at 1.82% at September 30, 2000, and non-performing loans were low at 0.25%. While non-performing loans are up quite a bit from a year earlier, reserves have been boosted accordingly in our opinion. One of the last premier franchises left in the strong Long Island, NY market that could easily fetch $20+ a share in a takeout, which is likely with 1-2 years. If they are not taken, look for a solid 15% return on investment over the next 10 years through stock dividends, cash dividends and stock appreciation. The Bank pays a 4% cash dividend and usually pays stock dividends once a year. The latest was an 8% stock dividend paid on 5/23/2000. They have 7.55 million shares outstanding and they have a book value of $9 a share. Accumulate under 14 and buy all you can under 12. Hold on to this one for the long run, premier market area and management that know how to run a bank. Located New Hyde Park, NY.

Catalyst

mergers,