SC 13D/A

Page 1 of 18

CUSIP No. 855716106

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

Amendment No. 3

STATE BANCORP, INC.

(Name of Issuer)

Common Stock, par value $5.00 per share

(Title of Class of Securities)

855716106

(CUSIP Number)

Mr. John W. Palmer

PL Capital LLC

20 East Jefferson Avenue

Suite 22

Naperville, IL  60540

(630) 848-1340

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

February 25, 2009

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box £.

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON Financial Edge Fund, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS WC, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 211,630
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 211,630

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 211,630
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.5%
14	TYPE OF REPORTING PERSON PN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON Financial Edge—Strategic Fund, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS WC, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 94,794
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 94,794

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 94,794
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7%
14	TYPE OF REPORTING PERSON PN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON Goodbody/PL Capital, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS WC, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 98,231
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 98,231

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 98,231
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7%
14	TYPE OF REPORTING PERSON PN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON PL Capital, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 481,523
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 481,523

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 481,523
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.3%
14	TYPE OF REPORTING PERSON PN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON Goodbody/PL Capital, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 98,231
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 98,231

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 98,231
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7%
14	TYPE OF REPORTING PERSON PN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON PL Capital Advisors, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 579,754
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 579,754

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 579,754
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.0%
14	TYPE OF REPORTING PERSON PN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON John W. Palmer
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS AF, PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 100
		8	SHARED VOTING POWER 579,754
		9	SOLE DISPOSITIVE POWER 100
		10	SHARED DISPOSITIVE POWER 579,754

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 579,854
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.0%
14	TYPE OF REPORTING PERSON IN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON Richard J. Lashley
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS AF, PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 1,000
		8	SHARED VOTING POWER 579,754
		9	SOLE DISPOSITIVE POWER 1,000
		10	SHARED DISPOSITIVE POWER 579,754

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 580,754
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.0%
14	TYPE OF REPORTING PERSON IN

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CUSIP No. 855716106

1	NAME OF REPORTING PERSON PL Capital/Focused Fund, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)   T (b)   £
3	SEC USE ONLY
4	SOURCE OF FUNDS WC, OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			£
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 175,099
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 175,099

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 175,099
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	T
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.2%
14	TYPE OF REPORTING PERSON PN

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CUSIP No. 855716106

Item 1.                     Security and Issuer

This amended Schedule 13D/A relates to the common stock, par value $5.00 per share (“Common Stock”), of State Bancorp, Inc. (the “Company” or “State Bancorp”).  The address of the principal executive offices of the Company is Two Jericho Plaza, Jericho, New York 11753.  This amended Schedule 13D/A is being filed to reflect the fact that each member of the PL Capital Group and the PL Capital Group as a whole own less than five percent of the Common Stock.

Item 2.                     Identity and Background

This amended Schedule 13D/A is being filed jointly by the parties identified below.  All of the filers of this amended Schedule 13D/A are collectively the “PL Capital Group.”  The joint filing agreement of the members of the PL Capital Group is filed as Exhibit 1 to this amended Schedule 13D/A.

·   Financial Edge Fund, L.P., a Delaware limited partnership (“Financial Edge Fund”);

·   Financial Edge-Strategic Fund, L.P., a Delaware limited partnership (“Financial Edge Strategic”);

·   PL Capital/Focused Fund, L.P., a Delaware limited partnership (“Focused Fund”);

·   PL Capital, LLC, a Delaware limited liability company (“PL Capital”) and General Partner of Financial Edge Fund, Financial Edge Strategic and Focused Fund;

·   PL Capital Advisors, LLC, a Delaware limited liability company (“PL Capital Advisors”), and the investment advisor to  Financial Edge Fund, Financial Edge Strategic, Goodbody/PL Capital, L.P. and Focused Fund;

·   Goodbody/PL Capital, L.P., a Delaware limited partnership (“Goodbody/PL LP”);

·   Goodbody/PL Capital, LLC, a Delaware limited liability company (“Goodbody/PL LLC”) and General Partner of Goodbody/PL LP;

·   John W. Palmer and Richard J. Lashley, as Managing Members of PL Capital, PL Capital Advisors and Goodbody/PL LLC, and as individuals;

 (a)-(c)    This statement is filed by Mr. John W. Palmer and Mr. Richard J. Lashley, with respect to the shares of Common Stock beneficially owned by them, as follows:

(1) shares of Common Stock held in the name of Financial Edge Fund, Financial Edge Strategic and Focused Fund, in Mr. Palmer’s and Mr. Lashley’s capacity as Managing Members of (A) PL Capital: the General Partner of Financial Edge Fund, Financial Edge Strategic and Focused Fund, and (B) PL Capital Advisors: the investment advisor for Financial Edge Fund, Financial Edge Strategic and Focused Fund

(2)	shares of Common Stock held in the name of Goodbody/PL LP, in Mr. Palmer’s and Mr. Lashley’s capacity as Managing Members of (A) Goodbody/PL LLC: the General Partner of Goodbody/PL LP, and (B) PL Capital Advisors: the investment advisor for Goodbody/PL LP; and
(3)	shares of Common Stock held by Mr. Palmer and Mr. Lashley, as individuals.

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CUSIP No. 855716106

The business address of Financial Edge Fund, Financial Edge Strategic, Focused Fund, PL Capital, PL Capital Advisors, Goodbody/PL LP, Goodbody/PL LLC, Mr. Palmer and Mr. Lashley is:  c/o PL Capital, 20 East Jefferson Avenue, Suite 22, Naperville, Illinois 60540.  Each of Financial Edge Fund, Financial Edge Strategic, Focused Fund, PL Capital, Goodbody/PL LP, PL Capital Advisors and Goodbody/PL LLC are engaged in various interests, including investments.

The principal employment of Messrs. Palmer and Lashley is investment management with each of PL Capital, PL Capital Advisors and Goodbody/PL LLC.

 (d)           During the past five years, no member of the PL Capital Group has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

 (e)           During the past five years, no member of the PL Capital Group has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws.

 (f)           All of the individuals who are members of the PL Capital Group are citizens of the United States.

Item 3.                    Source and Amount of Funds or Other Consideration

In aggregate, the PL Capital Group owns 580,854 shares of Common Stock of the Company acquired at an aggregate cost of $9,236,761.

The amount of funds expended by Financial Edge Fund to acquire the 211,630 shares of Common Stock it holds in its name is $3,369,193.  Such funds were provided from Financial Edge Fund’s available capital and from time to time by margin loans provided by BNP Paribas Prime Brokerage, Inc. (BNP Paribas).

The amount of funds expended by Financial Edge Strategic to acquire the 94,794 shares of Common Stock it holds in its name is $1,522,060.  Such funds were provided from Financial Edge Strategic’s available capital and from time to time by margin loans provided by BNP Paribas.

The amount of funds expended by Focused Fund to acquire the 175,099 shares of Common Stock it holds in its name is $2,747,968.  Such funds were provided from Focused Fund’s available capital and from time to time by margin loans provided by BNP Paribas.

The amount of funds expended by Goodbody/PL LP to acquire the 98,231 shares of Common Stock it holds in its name is $1,580,987.  Such funds were provided from Goodbody/PL LP’s available capital and from time to time by margin loans provided by BNP Paribas.

The amount of funds expended by Mr. Palmer to acquire the 100 shares of Common Stock he holds in his name is $1,508.  Such funds were provided from Mr. Palmer’s personal funds.

The amount of funds expended by Mr. Lashley to acquire the 1,000 shares of Common Stock he holds in his name is $15,045.  Such funds were provided from Mr. Lashley’s personal funds.

Any purchases of Common Stock made by members of the PL Capital Group using funds borrowed from BNP Paribas, if any, were made in margin transactions on that firm’s usual terms and conditions.  All or part of the shares of Common Stock owned by members of the PL Capital Group may from time to time be pledged with one or more banking institutions or brokerage firms as collateral for loans made by such entities to members of the PL Capital Group.  Such loans, if any, generally bear interest at a rate based upon the federal funds rate plus a margin.  Such indebtedness, if any, may be refinanced with other banks or broker-dealers.  As of the date of this filing, no member of the PL Capital Group has margin loans outstanding secured by Common Stock except Financial Edge, Financial Edge Strategic and Goodbody/PL LP.

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CUSIP No. 855716106

Item 4.                    Purpose of Transaction

This is the PL Capital Group’s third amendment to its initial Schedule 13D filing.  The PL Capital Group owns 4.0% of State Bancorp.  The PL Capital Group acquired the Common Stock because it believes the stock of State Bancorp is undervalued.

On November 24, 2008, PL Capital Group member Richard Lashley sent a shareholder proposal to State Bancorp, a copy of which is attached to this amended Schedule 13D/A as Exhibit 2.

On February 12, 2009, Mr. Lashley sent a follow-up letter on the shareholder proposal, a copy of which is attached to this amended Schedule 13D/A as Exhibit 3.

 On February 25, 2009, State Bancorp sent Mr. Lashley a response to the shareholder proposal, a copy of which is attached to this amended Schedule 13D/A as Exhibit 4.

On March 6, 2009, Mr. Lashley sent a letter to State Bancorp withdrawing the shareholder proposal, a copy of which is attached to this amended Schedule 13D/A as Exhibit 5.

The PL Capital Group plans to closely monitor its investment in the Company, including communicating with members of the Company’s management team and Board of Directors from time to time.

Members of the PL Capital Group may make further purchases of shares of Common Stock, although the PL Capital Group has no present intention of ever increasing PL Capital Group’s aggregate holdings above 9.999% of the Company’s outstanding Common Stock.  Members of the PL Capital Group may dispose of any or all the shares of Common Stock held by them.

As of the date of this amended schedule 13D/A, no member of the PL Capital Group has any plans or proposals, which relate to, or would result in, any of the matters referred to in paragraphs (b) through (j), inclusive of Item 4 of this amended Schedule 13D/A.  Such individuals may, at any time and from time to time, review or reconsider their positions and formulate plans or proposals with respect thereto.

Item 5.                     Interest in Securities of the Company

The percentages used in this amended Schedule 13D/A were calculated based on 14,506,971 outstanding shares of Common Stock on October 23, 2008, as reported in State Bancorp’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 10, 2008.

The PL Capital Group’s transactions in the Common Stock within the past 60 days are as follows:

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CUSIP No. 855716106

(A) Financial Edge Fund

(a)-(b)      See cover page.

(c) Financial Edge Fund made no purchases or sales of Common Stock in the past 60 days.

(d) Because Messrs. Palmer and Lashley are the Managing Members of PL Capital, the general partner of Financial Edge Fund, they have the power to direct the affairs of Financial Edge Fund, including the voting and disposition of shares of Common Stock held in the name of Financial Edge Fund.  Mr. Palmer and Mr. Lashley are also the Managing Members of PL Capital Advisors, the investment advisor of Financial Edge Fund.  Therefore, Mr. Palmer and Mr. Lashley are deemed to share voting and disposition power with Financial Edge Fund with regard to those shares of Common Stock.

(B) Financial Edge Strategic

(a)-(b)      See cover page.

(c) Financial Edge Strategic made no purchases or sales of Common Stock in the past 60 days.

(d) Because Messrs. Palmer and Lashley are the Managing Members of PL Capital, the general partner of Financial Edge Strategic, they have the power to direct the affairs of Financial Edge Strategic, including the voting and disposition of shares of Common Stock held in the name of Financial Edge Strategic.  Mr. Palmer and Mr. Lashley are also the Managing Members of PL Capital Advisors, the investment advisor of Financial Edge Strategic.  Therefore, Mr. Palmer and Mr. Lashley are deemed to share voting and disposition power with Financial Edge Strategic with regard to those shares of Common Stock.

(C) Focused Fund

(a)-(b)      See cover page.

(c)           Focused Fund made no purchases or sales of Common Stock in the past 60 days.

(d) Because Messrs. Palmer and Lashley are the Managing Members of PL Capital, the general partner of Focused Fund, they have the power to direct the affairs of Focused Fund, including the voting and disposition of shares of Common Stock held in the name of Focused Fund.  Mr. Palmer and Mr. Lashley are also the Managing Members of PL Capital Advisors, the investment advisor of Focused Fund.  Therefore, Mr. Palmer and Mr. Lashley are deemed to share voting and disposition power with Focused Fund with regard to those shares of Common Stock.

(D)           Goodbody/PL LP

(a)-(b)      See cover page.

(c) Goodbody/PL LP made no purchases or sales of Common Stock in the past 60 days.

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CUSIP No. 855716106

(d) Goodbody/PL LLC is the general partner of Goodbody/PL LP.  Because Messrs. Palmer and Lashley are the Managing Members of Goodbody/PL LLC, they have the power to direct the affairs of Goodbody/PL LP.  Mr. Palmer and Mr. Lashley are also the Managing Members of PL Capital Advisors, the investment advisor of Goodbody/PL LP.  Therefore, Goodbody/PL LLC may be deemed to share with Messrs. Palmer and Lashley voting and disposition power with regard to the shares of Common Stock held by Goodbody/PL LP.

(E)           PL Capital

(a)-(b)      See cover page.

(c) PL Capital has made no purchases or sales of Common Stock directly.

(d) PL Capital is the general partner of Financial Edge Fund, Financial Edge Strategic and Focused Fund.  Because Messrs. Palmer and Lashley are the Managing Members of PL Capital, they have the power to direct the affairs of PL Capital.  Therefore, PL Capital may be deemed to share with Mr. Palmer and Mr. Lashley voting and disposition power with regard to the shares of Common Stock held by Financial Edge Fund, Financial Edge Strategic and Focused Fund.

(F)           PL Capital Advisors

(a)-(b)      See cover page.

(c) PL Capital Advisors has made no purchases or sales of Common Stock directly.

(d) PL Capital Advisors is the investment advisor to Financial Edge Fund, Financial Edge Strategic, Focused Fund, and Goodbody/PL LP.  Because they are the Managing Members of PL Capital Advisors, Mr. Palmer and Mr. Lashley have the power to direct the affairs of PL Capital Advisors.   Therefore, PL Capital Advisors may be deemed to share with Mr. Palmer and Mr. Lashley voting and disposition power with regard to the shares of Common Stock held by Financial Edge Fund, Financial Edge Strategic, Focused Fund, and Goodbody/PL LP.

(G)           Goodbody/PL LLC

(a)-(b)      See cover page.

(c) Goodbody/PL LLC has made no purchases or sales of Common Stock directly.

(d) Goodbody/PL LLC is the general partner of Goodbody/PL LP.  Because Messrs. Palmer and Lashley are the Managing Members of Goodbody/PL LLC, they have the power to direct the affairs of Goodbody/PL LLC.  Therefore, Goodbody/PL LLC may be deemed to share with Messrs. Palmer and Lashley voting and disposition power with regard to the shares of Common Stock held by Goodbody/PL LP.

(H)           Mr. John W. Palmer

(a)-(b)      See cover page.

(c) Mr. Palmer made no purchases or sales of Common Stock in the past 60 days.

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CUSIP No. 855716106

(I)           Mr. Richard J. Lashley

(a)-(b)      See cover page.

(c) Mr. Lashley made no purchases or sales of Common Stock in the past 60 days.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Company.

With respect to Financial Edge Fund, Financial Edge Strategic, and Focused Fund, PL Capital is entitled to an allocation of a portion of profits, if any.  With respect to Financial Edge Fund, Financial Edge Strategic, Focused Fund, and Goodbody/PL LP, PL Capital Advisors is entitled to a management fee based upon a percentage of total capital. With respect to Goodbody/PL LP, Goodbody/PL LLC is entitled to an allocation of a portion of profits, if any.

Other than the foregoing agreements and the Joint Filing Agreement filed as Exhibit 1 to this amended Schedule 13D, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 of this amended Schedule 13D/A and between such persons and any person with respect to any securities of the Company.

Item 7.                    Material to be Filed as Exhibits

Exhibit No.	Description
1	Joint Filing Agreement.
2	Letter from PL Capital Group to State Bancorp, Inc., dated November 24, 2008, submitting shareholder proposal.
3	Letter from PL Capital Group to State Bancorp, Inc., dated February 12, 2009, relating to shareholder proposal.
4	Letter from State Bancorp, Inc. to PL Capital Group, dated February 25, 2009, relating to shareholder proposal.
5	Letter from PL Capital Group to State Bancorp, Inc., dated March 6, 2009, withdrawing shareholder proposal.

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CUSIP No. 855716106

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date:                      March 6, 2009

FINANCIAL EDGE FUND, L.P.

By:        PL CAPITAL, LLC

  General Partner

By:        /s/ John W. Palmer                                               /s/ Richard J. Lashley

  John W. Palmer                                                    Richard J. Lashley

  Managing Member                                              Managing Member

FINANCIAL EDGE-STRATEGIC FUND, L.P.

By:        PL CAPITAL, LLC

  General Partner

By:        /s/ John W. Palmer                                               /s/ Richard J. Lashley

  John W. Palmer                                                    Richard J. Lashley

  Managing Member                                              Managing Member

PL CAPITAL/FOCUSED FUND, L.P.

By:        PL CAPITAL, LLC

  General Partner

By:        /s/ John W. Palmer                                               /s/ Richard J. Lashley

  John W. Palmer                                                    Richard J. Lashley

  Managing Member                                              Managing Member

GOODBODY/PL CAPITAL, L.P.

By:        GOODBODY/PL CAPITAL, LLC

  General Partner

By:        /s/ John W. Palmer                                               /s/ Richard J. Lashley

  John W. Palmer                                                     Richard J. Lashley

  Managing Member                                               Managing Member

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CUSIP No. 855716106

GOODBODY/PL CAPITAL, LLC

By:           /s/ John W. Palmer                                              /s/ Richard J. Lashley

John W. Palmer                                                     Richard J. Lashley

Managing Member                                               Managing Member

PL CAPITAL ADVISORS, LLC

By:           /s/ John W. Palmer                                              /s/ Richard J. Lashley

John W. Palmer                                                     Richard J. Lashley

Managing Member                                               Managing Member

PL CAPITAL, LLC

By:           /s/ John W. Palmer                                              /s/ Richard J. Lashley

John W. Palmer                                                     Richard J. Lashley

Managing Member                                               Managing Member

By:           /s/ John W. Palmer

                 John W. Palmer

By:           /s/ Richard J. Lashley

                 Richard J. Lashley

EX-99

EXHIBIT 1

JOINT FILING AGREEMENT

Pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree that the Schedule 13D to which this Joint Filing Agreement is being filed as an exhibit shall be a joint statement filed on behalf of each of the undersigned.

Date:   March 6, 2009

FINANCIAL EDGE FUND, L.P.

By:           PL CAPITAL, LLC

General Partner

By:           /s/ John W. Palmer                                                 /s/ Richard J. Lashley

John W. Palmer                                                       Richard J. Lashley

Managing Member                                                 Managing Member

FINANCIAL EDGE-STRATEGIC FUND, L.P.

By:           PL CAPITAL, LLC

General Partner

By:           /s/ John W. Palmer                                                 /s/ Richard J. Lashley

John W. Palmer                                                       Richard J. Lashley

Managing Member                                                 Managing Member

PL CAPITAL/FOCUSED FUND, L.P.

By:           PL CAPITAL, LLC

General Partner

By:           /s/ John W. Palmer                                                 /s/ Richard J. Lashley

John W. Palmer                                                       Richard J. Lashley

Managing Member                                                 Managing Member

GOODBODY/PL CAPITAL, L.P.

By:           GOODBODY/PL CAPITAL, LLC

General Partner

By:           /s/ John W. Palmer                                                 /s/ Richard J. Lashley

John W. Palmer                                                       Richard J. Lashley

Managing Member                                                 Managing Member

GOODBODY/PL CAPITAL, LLC

By:           /s/ John W. Palmer                                                 /s/ Richard J. Lashley

John W. Palmer                                                        Richard J. Lashley

Managing Member                                                 Managing Member

PL CAPITAL ADVISORS, LLC

By:           /s/ John W. Palmer                                                 /s/ Richard J. Lashley

John W. Palmer                                                        Richard J. Lashley

Managing Member                                                 Managing Member

PL CAPITAL, LLC

By:           /s/ John W. Palmer                                                 /s/ Richard J. Lashley

John W. Palmer                                                        Richard J. Lashley

Managing Member                                                 Managing Member

By:           /s/ John W. Palmer

                 John W. Palmer

By:           /s/ Richard J. Lashley

                 Richard J. Lashley

EX-99

Exhibit 2

Mr. Richard J. Lashley

2 Trinity Place

Warren, NJ 07059

Via Fax and Overnight Mail

November 24, 2008

Corporate Secretary

State Bancorp, Inc.

Two Jericho Plaza

Jericho, NY  11753

Re:           Shareholder Proposal Respecting Stock Ownership Guidelines

Dear Sir or Madam:

I am submitting the attached shareholder proposal respecting the stock ownership guidelines of State Bancorp, Inc. (the “Company”), pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, and request that it be included in your proxy statement for the 2009 Annual Meeting of Shareholders.  I hereby certify to the Company that I have continuously held as a registered holder at least $2,000 worth of the Company’s Common Stock, par value $5 per share (the “Common Stock”), for over one year.  I intend to continue to hold at least $2,000 worth of the Common Stock through the date of the 2009 Annual Meeting of Shareholders.

I am also the beneficial owner of an additional 579,854 shares of the Company as of November 17, 2008.  This beneficial ownership includes shares held by Financial Edge Fund, L.P.;  Financial Edge Strategic Fund, L.P.; Goodbody/PL Capital, L.P.; PL Capital/Focused Fund, L.P.;  PL Capital Advisors, LLC;  PL Capital, LLC;  Goodbody/PL Capital, LLC; and John W. Palmer (collectively, together with me, the “PL Capital Group”).  We believe the PL Capital Group is the largest outside shareholder of the Company, and we have closely followed the Company during the past several years.

The Company’s current stock ownership guidelines were adopted in 2008 and require that members of the board of directors own at least 5,000 shares.  In general, directors have four years from the date of adoption of the stock ownership guidelines in which to comply with this ownership requirement (namely, until 2012) regardless of when they joined the board.  We feel strongly that the current stock ownership guidelines are not sufficient because it is not just stock ownership that aligns directors’ interests with those of shareholders but a material personal investment and ownership stake by the directors, and the current ownership requirements do not achieve that.  In our view, directors with a material personal investment and ownership stake are more effective and attentive to the interests of the Company and its shareholders.  The attached shareholder proposal outlines specific reasons why we believe the current stock ownership guidelines fail to require a material personal investment and ownership stake by the Company’s directors.

While we commend the Company for certain corporate governance improvements made in 2007, including the implementation of the current stock ownership guidelines, we think more needs to be done.  Further, we note that most of the Company’s corporate governance improvements came as the result of the settlement of the shareholder derivative action filed July 17, 2007.  Among other things, the settlement agreement required the Company to reduce the size of the board of directors, to provide that director candidates (in uncontested elections) who do not obtain a majority of the votes cast by shareholders to promptly tender their resignation, and to implement written stock ownership guidelines.

The corporate governance improvements mandated by the settlement agreement are a good start, but the Company needs to take additional steps on its own to ensure that the interests of the Company and its shareholders are appropriately safeguarded.

In addition to the improving the stock ownership guidelines, the Company should consider further reducing the size of its board, as our prior personal board experience and observations of numerous boards over the past 25 years has shown that larger boards are generally not more effective than smaller boards, and smaller boards are more cost effective.  We recommend that the board’s Nominating and Governance committee take this into consideration as it nominates candidates for 2009, 2010 and beyond.  Additionally, the board should be declassified and all directors should be elected annually.  While we do not plan to make shareholder proposals at this time regarding these two issues, the PL Capital Group will take the board’s actions in these and other areas into consideration when it votes in the upcoming 2009 Annual Meeting (and in future years).

I would be happy to discuss with you the shareholder proposal that I am submitting.   Should the board of directors decide to adopt the attached stock ownership guidelines, I will ask that the proposal be withdrawn from consideration at the shareholder meeting.  Please feel free to contact me at (908) 604-6436 if you have any questions or need any additional information relating to this proposal.

Very truly yours,

/s/ Richard J. Lashley

Richard J. Lashley

cc:           Mr. John Palmer, PL Capital LLC

Mr. Phillip Goldberg, Foley & Lardner LLP

RESOLVED:

We request that the directors implement stock ownership guidelines requiring that each director beneficially own at least 20,000 shares of State Bancorp, Inc. common stock (“Common Stock”) or such greater number of shares of Common Stock until the director has accumulated ownership of at least $150,000 worth of Common Stock (calculated based upon the cost of direct purchases, plus the market value at the date of vesting for restricted stock, plus the exercise price paid to exercise stock options as long as such stock is retained after exercise).  Unexercised option grants and unvested restricted stock grants are excluded.  Directors must achieve this ownership level within four years of joining the board of directors.  Directors with three or more years of prior service as of the date these stock ownership guidelines are adopted must achieve this ownership level within one year.

Shareholder Supporting Statement:

The Company has already come to recognize that stock ownership is one of the best ways to align the interests of directors with those of shareholders.  We are merely proposing an increase in the minimum amount of stock that must be owned by each director, to ensure that directors have a material personal investment and ownership stake in the company, and a reduction in the amount of time to comply with the ownership requirement, because we believe the current period for compliance is too long.

We believe that directors with a material personal investment and ownership stake are more effective and attentive to the interests of shareholders, and we believe the current ownership guidelines are not sufficient to align directors’ interests with those of shareholders because:

●   5,000 shares is not a sufficiently material personal financial commitment for directors who have stewardship over a company with $1.6 billion of assets, $112 million of stockholders’ equity and a market cap of $161 million at recent prices;

●   At recent prices a 5,000 share investment would cost approximately $55,000, an amount that is not sufficiently material in our view;

●   Directors have been and will continue to be given stock through stock option grants and restricted stock grants, so meeting the 5,000 share requirement in four years may not require a material out of pocket outlay of personal funds for individual directors;

●   Most directors are long term members of the board who should have already accumulated a significant ownership position, as several directors have already done; and

●   State Bancorp’s stock price has declined significantly over the past one (-20%), three (-34%) and five (-25%) year periods (as of November 18, 2008), and significant losses were incurred in recent years by the Company to settle material litigation and other matters.  While greater ownership by directors may not have changed these results or the decisions made by the board respecting these matters, we believe it would have better aligned directors’ interests with those of shareholders.

We urge you to vote FOR this resolution.

EX-99

Exhibit 3

February 12, 2009

The Board of Directors

State Bancorp, Inc.

Two Jericho Plaza

Jericho, NY  11753-1683

Dear Members of the Board:

As each of you know, the PL Capital Group previously submitted a shareholder proposal respecting the stock ownership guidelines of State Bancorp, Inc. (the Company), for inclusion in the Company’s proxy for the upcoming 2009 Annual Meeting.  In addition to the shareholder proposal, we suggested several other corporate governance improvements that we believe the Board of Directors should adopt, including reducing the size of the board and declassifying the board.

On January 27, 2009 we met telephonically with the members of the Nominating and Governance Committee to discuss our proposal and suggestions.  We appreciate the Committee members’ willingness to meet with us and listen to our concerns and suggestions.  We also listened to the concerns and suggestions of the Committee.

We also considered the following items before reaching the decisions noted later in this letter:

·   Q4 and Full Year 2008 Earnings:  Subsequent to our meeting with the Nominating and Governance Committee, the Company reported its results for the quarter and year ended December 31, 2008.  The results were, to quote President and CEO Thomas M. O’Brien in the Company’s press release, “both disappointing and plainly unacceptable.”

·   TARP Capital Purchase Program:  On December 10, 2008 the Company announced the sale to the U.S. Treasury of $37 million in preferred stock and ten year warrants to purchase 465,569 shares of common stock for $11.87 per common share.  Among other things this capital comes at a significant cost to shareholders in the form of foregoing the possibility of increased dividends and stock buybacks, long term dilution from the common stock warrants, and increased carrying costs from the non-tax deductible preferred dividend.

·   66% Reduction in Dividend:  The Board recently reduced the quarterly dividend to $0.05 per share, a decrease from $0.10 per share in late 2008 and $0.15 in prior periods.

·   Recent Sale of Stock by a Director:  On February 4, 2009 Director Suzanne Rueck sold 6,000 shares of common stock of the Company.  While we don’t know the circumstances behind the sale, it is contrary to the purpose of our shareholder proposal on increased stock ownership, and comes less than a week after we had a long discussion with the Nominating and Governance Committee of the Board about Directors increasing their commitment to ownership of the Company, not decreasing it.  We did note and appreciate the recent insider purchases by Messrs. Wilks and Christman.

·   Reduced Earnings Estimates:  The only analyst covering the Company, Sandler O’Neill, recently cut their 2009 and 2010 earnings estimates to $0.66 and $0.88, respectively.

·   68% Stock Price Decline:  The Company’s stock price has declined 28% since December 31, 2008, after declining 25% in 2008 and 32% in 2007.  Since the stock peaked on February 20, 2007 at $22.19, the stock has declined 68% through February 11, 2009.

·   Prior Concerns and Accountability:  We are not going to repeat all of the concerns we raised in 2006-2008, but they are significant.  We believe that the incumbent directors have not yet been held fully accountable for the prior problems incurred by the Company.

It is for these reasons that we are not prepared to withdraw or modify the terms of the shareholder proposal we previously submitted.  We plan to actively solicit the support of fellow shareholders to pass this proposal, to the extent allowed by the proxy rules of the Securities and Exchange Commission (SEC).  If the Board adopts a stock ownership policy in line with our proposal we will withdraw our proposal before the Annual Meeting.

We also reiterate our previous request to the Board to declassify and allow for annual elections.  It is our understanding that a shareholder has submitted a shareholder proposal covering this matter.  While we will fully review that proposal once it is publicly filed, we plan to vote for the proposal to declassify the board if it is presented to shareholders.

For all of the reasons noted above, and consistent with our previously stated request to shrink the size of the Board, we are also planning to run an active campaign, to the extent allowed by SEC rules and regulations, to encourage fellow shareholders to withhold votes for two of the Company’s candidates for election to the Board of Directors at the upcoming Annual Meeting.  It is our understanding that four directors are currently included in the Class of 2009 (Messrs. Christman, Liaw, Simons and Katsoulis).  If these four individuals are presented to shareholders for election at the 2009 Annual Meeting, we plan to actively solicit fellow shareholders to withhold votes for two of the following three Directors:  Messrs. Christman, Liaw and Simons.  We have not yet made the decision which one of those three we will support.  We plan to support Mr. Katsoulis based upon his significant prior banking experience and recent arrival on the Board.

We strongly suggest that the Board reduce the size of the Class of 2009 from four directors to two, prior to the issuance of the Company proxy and the 2009 Annual Meeting.  This will avoid a public contest that may be expensive, divisive and distracting.  It will also evidence the Board’s commitment to accountability and shareholder value.

We also suggest that the Board and management pursue a merger partner that would pay a premium for the Company and create a stronger company for State Bancorp’s customers, shareholders and employees.  Such a transaction is likely to restore some or all of the significant loss of shareholder value incurred by shareholders and would allow the Company to work with a strong partner as it faces the challenges and opportunities of 2009 and beyond.  While the Company’s financial advisors are likely aware of the potential acquirers of, or merger partners for, the Company, we note that on a recent conference call held to discuss merger opportunities and other items, the CEO of Valley Bancorp noted that Valley’s ideal opportunity was a $1.0 to $2.0 billion in assets commercial bank.  When asked about geographic preferences, he specifically noted expansion into Nassau County.  In our opinion, there are other potential acquirers of, or merger partners for, the Company that might pursue a transaction if they were approached by the Company.

Please provide a copy of this letter to every Director.  Please feel free to call us (Rich:  973-360-1666 or John:  630-848-1340) with questions or comments.

Sincerely,

/s/ Richard Lashley	/w/ John Wm. Palmer
Richard Lashley Principal	John Wm. Palmer Principal

EX-99

Exhibit 4

February 25, 2009

VIA E-MAIL AND FEDERAL EXPRESS

Mr. Richard J. Lashley

2 Trinity Place

Warren, New Jersey 07059

RE:           State Bancorp, Inc. Rule 14a-8 Proposal

Dear Mr.  Lashley:

In accordance with §240.14a-8 of the General Rules and Regulations of the Securities Exchange Act of 1934, enclosed is a copy of the State Bancorp, Inc.’s statement of opposition to your shareholder proposal that will appear in the Company’s 2009 Proxy Statement.

Very truly yours,

/s/ Patricia M. Schaubeck

Patricia M. Schaubeck

General Counsel

Enclosure

MILW_

Exhibit 4

PROPOSAL _____

STOCKHOLDER PROPOSAL TO INCREASE THE MINIMUM

STOCK OWNERSHIP GUIDELINES FOR DIRECTORS

An affiliated group of stockholders, the PL Capital Group, has requested that the Company include the following proposal and supporting statement in the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders.  If properly presented by an authorized individual of the group, this proposal will be voted on at the Annual Meeting.  These stockholders have represented that they beneficially own 580,854 shares of stock of the Company.  The address of the proponent will be made available to any Stockholder of the Company promptly upon oral or written request of any Stockholder to the Company’s Secretary, State Bancorp, Inc., Two Jericho Plaza, Jericho, New York 11753.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “AGAINST” THIS PROPOSAL

Unless you specify otherwise, the Board intends the accompanying proxy to be voted against this proposal.  The stockholder proposal and supporting statement, for which the Board and the Company accept no responsibility, follow verbatim in italics:

“RESOLVED:

We request that the directors implement stock ownership guidelines requiring that each director beneficially own at least 20,000 shares of State Bancorp, Inc. common stock (“Common Stock”) or such greater number of shares of Common Stock until the director has accumulated ownership of at least $150,000 worth of Common Stock (calculated based upon the cost of direct purchases, plus the market value at the date of vesting for restricted stock, plus the exercise price paid to exercise stock options as long as such stock is retained after exercise).  Unexercised option grants and unvested restricted stock grants are excluded.  Directors must achieve this ownership level within four years of joining the board of directors.  Directors with three or more years of prior service as of the date these stock ownership guidelines are adopted must achieve this ownership level within one year.

Shareholder Supporting Statement:

The Company has already come to recognize that stock ownership is one of the best ways to align the interests of directors with those of shareholders.  We are merely proposing an increase in the minimum amount of stock that must be owned by each director, to ensure that directors have a material personal investment and ownership stake in the company, and a reduction in the amount of time to comply with the ownership requirement, because we believe the current period for compliance is too long.

We believe that directors with a material personal investment and ownership stake are more effective and attentive to the interests of shareholders, and we believe the current ownership guidelines are not sufficient to align directors’ interests with those of shareholders because:

·   5,000 shares is not a sufficiently material personal financial commitment for directors who have stewardship over a company with $1.6 billion of assets, $112 million of stockholders’ equity and a market cap of $161 million at recent prices;

·   At recent prices a 5,000 share investment would cost approximately $55,000, an amount that is not sufficiently material in our view;

·   Directors have been and will continue to be given stock through stock option grants and restricted stock grants, so meeting the 5,000 share requirement in four years may not require a material out of pocket outlay of personal funds for individual directors;

·   Most directors are long term members of the board who should have already accumulated a significant ownership position, as several directors have already done; and

·   State Bancorp’s stock price has declined significantly over the past one (-20%), three (-34%) and five (-25%) year periods (as of November 18, 2008), and significant losses were incurred in recent years by the Company to settle material litigation and other matters.  While greater ownership by directors may not have changed these results or the decisions made by the board respecting these matters, we believe it would have better aligned directors’ interests with those of shareholders.

We urge you to vote “FOR” this resolution.”

BOARD OF DIRECTORS STATEMENT IN OPPOSITION TO STOCKHOLDER PROPOSAL

The Company recognizes the value of aligning the personal economic interests of its directors with the long-term interests of the Company’s stockholders.  This is reflected in the Company’s by-laws, which require that, to be eligible to serve on the Company’s Board of Directors, an individual must be a Stockholder.  In addition, the Company’s Corporate Governance Guidelines ( the “Company’s Guidelines”) require that by June 12, 2010, existing Directors must beneficially own no fewer than 5,000 shares of the Common Stock of the Company and future directors shall have no more than forty-eight (48) months from the date they become a director to acquire the requisite number of shares.  Further, as discussed under “Director Compensation,” the Company maintains the Directors Stock Plan, which is designed to increase Directors’ beneficial ownership in the Company and more closely tie their interest in the long-term growth and profitability of the Company with that of Stockholders.

In clear recognition of the importance of further aligning the interests of Directors with the Company’s Stockholders, however, the Board of Directors offered a compromise to the proponent to increase the Company’s minimum stock ownership guidelines for Directors.  The proponent did not agree to the compromise, but the Board nevertheless adopted these guidelines at its February 24, 2009 Board meeting, effective May 1, 2009, pending the outcome of the Stockholder vote on this proposal.  While the Board believes that its revised guidelines as presented below are preferable, if the proponent’s minimum stock ownership guidelines for Directors are accepted by Stockholders, the Board will adopt the proponent’s guidelines.

The Board of Directors passed an amendment to the Company’s Guidelines to require that each Director beneficially own the lesser of $150,000 worth of Stock (calculated in the same manner as described by the proponent) or 20,000 shares.  The resolution requires that Directors achieve the minimum ownership requirements within the same time frame as set forth by the proponent, but increases to two years the time frame for Directors with three or more years of service to achieve the ownership requirements.

The financial services industry is complex and highly competitive.  The Company’s ability to attract, retain and motivate highly qualified directors is a key element in the Company’s continued growth and future success.  The Board of Directors believes that the stock ownership requirements it passed at its February 24, 2009 meeting and the Directors Stock Plan serve to align the interests of its Directors with those of its Stockholders without setting the requirement and the percentage at levels that might discourage otherwise qualified candidates from accepting a nomination to the Company’s Board.  The Board of Directors believes that its guidelines strike an appropriate balance between ensuring that its Directors have a significant equity stake in the future of the Company, while also allowing them to prudently manage their personal financial affairs.  The Board of Directors believes that its revised guidelines are fairer than the proponent’s guidelines and are less likely to dissuade quality candidates from considering board service.  The Board believes that its new guidelines are sufficiently close to the proponent’s guidelines to be considered as accomplishing the same mutually desired goal.

Approval of this proposal will require the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote thereon.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “AGAINST” THIS PROPOSAL

EX-99

Exhibit 5

Mr. Richard J. Lashley

2 Trinity Place

Warren, NJ 07059

Via Fax and Overnight Mail

March 6, 2009

Corporate Secretary

State Bancorp, Inc.

Two Jericho Plaza

Jericho, NY  11753

Re:           Shareholder Proposal Respecting Stock Ownership Guidelines

Dear Sir or Madam:

I am in receipt of your letter dated February 25, 2009, in which you represent that the Board of Directors of State Bancorp, Inc. (the “Company”) has adopted amendments to the Company’s stock ownership guidelines (the “Stock Ownership Guidelines”), which are described below.  Assuming the description of the amended Stock Ownership Guidelines set forth below is accurate, and subject to the Board not withdrawing or revoking the amended Stock Ownership Guidelines, I hereby withdraw the shareholder proposal that I submitted pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, respecting amendments to the Stock Ownership Guidelines, a copy of which is attached hereto as Exhibit A (the “Proposal”), and request that the Proposal not be included in the Company’s proxy materials for the 2009 Annual Meeting of Shareholders.

  Specifically, you have represented to me that the Board of Directors passed amendments to the Stock Ownership Guidelines at its meeting on February 24, 2009, to be effective May 1, 2009, to require that each Director beneficially own the lesser of $150,000 of the Company’s Common Stock, par value $5 per share (the “Common Stock”), or 20,000 shares of the Common Stock.  For purposes of the amended Stock Ownership Guidelines, the value of a Director’s Common Stock is calculated based upon the cost of direct purchases, plus the market value at the date of vesting for restricted stock, plus the exercise price paid to exercise stock options as long as such stock is retained after exercise.  Unexercised option grants and unvested restricted stock grants are excluded.  Under the amended Stock Ownership Guidelines, Directors must achieve the ownership level within four years of joining the Board of Directors, provided that Directors with three or more years of prior service as of February 24, 2009 must achieve the ownership level within two years.

If you have any further questions about the Proposal or this letter withdrawing the Proposal, please call me at (908) 604-6436.

Very truly yours,

/s/ Richard J. Lashley

Richard J. Lashley

cc:           Mr. John Palmer, PL Capital LLC

Mr. Phillip Goldberg, Foley & Lardner LLP

Exhibit A

RESOLVED:

We request that the directors implement stock ownership guidelines requiring that each director beneficially own at least 20,000 shares of State Bancorp, Inc. common stock (“Common Stock”) or such greater number of shares of Common Stock until the director has accumulated ownership of at least $150,000 worth of Common Stock (calculated based upon the cost of direct purchases, plus the market value at the date of vesting for restricted stock, plus the exercise price paid to exercise stock options as long as such stock is retained after exercise).  Unexercised option grants and unvested restricted stock grants are excluded.  Directors must achieve this ownership level within four years of joining the board of directors.  Directors with three or more years of prior service as of the date these stock ownership guidelines are adopted must achieve this ownership level within one year.

Shareholder Supporting Statement:

The Company has already come to recognize that stock ownership is one of the best ways to align the interests of directors with those of shareholders.  We are merely proposing an increase in the minimum amount of stock that must be owned by each director, to ensure that directors have a material personal investment and ownership stake in the company, and a reduction in the amount of time to comply with the ownership requirement, because we believe the current period for compliance is too long.

We believe that directors with a material personal investment and ownership stake are more effective and attentive to the interests of shareholders, and we believe the current ownership guidelines are not sufficient to align directors’ interests with those of shareholders because:

●   5,000 shares is not a sufficiently material personal financial commitment for directors who have stewardship over a company with $1.6 billion of assets, $112 million of stockholders’ equity and a market cap of $161 million at recent prices;

●   At recent prices a 5,000 share investment would cost approximately $55,000, an amount that is not sufficiently material in our view;

●   Directors have been and will continue to be given stock through stock option grants and restricted stock grants, so meeting the 5,000 share requirement in four years may not require a material out of pocket outlay of personal funds for individual directors;

●   Most directors are long term members of the board who should have already accumulated a significant ownership position, as several directors have already done; and

●   State Bancorp’s stock price has declined significantly over the past one (-20%), three (-34%) and five (-25%) year periods (as of November 18, 2008), and significant losses were incurred in recent years by the Company to settle material litigation and other matters.  While greater ownership by directors may not have changed these results or the decisions made by the board respecting these matters, we believe it would have better aligned directors’ interests with those of shareholders.

We urge you to vote FOR this resolution.