First State Bancorp (FSNM) to Close Utah Operations

July 7, 2008 6:15 PM EDT

First State Bancorp (NASDAQ: FSNM) announced the company will close its Utah operations in response to current economic conditions. First State does not expect to incur any significant one-time charges as part of this initiative.

The Utah operations were acquired as part of the First Community Industrial Bank acquisition in October 2002 and currently consists of two branches operated as First Community Bank in Salt Lake City and the nearby suburb of Midvale, Utah. Both branches are scheduled to close on October 31, 2008.

"In response to the continuing market speculation that many community banks will need to raise equity capital, First State Bancorporation will close its Utah operations. This decision will allow our balance sheet to shrink, thereby strengthening our capital position. We never gained the traction around deposit growth in Utah that we anticipated," stated Michael R. Stanford, Chairman and CEO. "This decision, though difficult, will lower our overhead and allow us to reduce our balance sheet by $280 million in loans over a period of time, enhancing our capital strength in the near term," continued Mr. Stanford.

First State Bancorporation is a bank holding company, providing commercial banking services to businesses through its subsidiary bank, First Community Bank (the Bank). [SM]

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