UBH Usb Holdings CO

ORANGEBURG, N.Y., April 25 /PRNewswire-FirstCall/ -- U.S.B. Holding Co., Inc. (the "Company") (NYSE:UBH), the parent company of Union State Bank (the "Bank"), announced today that the Company's net income for the three months ended March 31, 2007 was $6.7 million, or $0.30 per share (diluted), compared to $8.1 million, or $0.36 per share (diluted), for the three months ended March 31, 2006, a decrease of $1.4 million, or 16.9 percent. Return on average common stockholders' equity was 11.95 percent for the 2007 first quarter. Financial highlights as of and for the three months ended March 31, 2007 compared to the March 31, 2006 period are as follows: -- Consolidated total assets increased $148.5 million, or 5.3 percent, to $2.9 billion. -- Net loans increased $116.9 million, or 7.8 percent, to $1.6 billion. -- Deposits increased $139.0 million, or 7.7 percent, to $1.9 billion. -- Net interest margin on a fully tax equivalent basis declined 43 basis points to 3.16 percent, primarily due to an increase in funding costs. -- Non-interest expenses increased $0.6 million, or 4.5 percent, to $13.6 million primarily due to a $0.4 million increase in stock option expense. Thomas E. Hales, Chairman of the Board and Chief Executive Officer of the Company and the Bank, stated that, "The Company is experiencing increased competition for loans and deposits in its market area, while operating in an interest rate environment with a flat-to-inverted U.S. Treasury yield curve. The competitive market along with narrower interest rate spreads between interest earning assets and interest bearing liabilities has significantly contributed to the decrease in net income. We will continue to work towards increasing loans outstanding and managing our existing deposit relationships while obtaining new customer relationships, which will contribute to the long- term success of the Company and the benefit of our stockholders." Raymond J. Crotty, President and Chief Operating Officer of the Company and the Bank, added that, "The anticipated opening of branches in Monroe, Orange County, and Croton-on-Hudson, Westchester County, New York, will assist the Bank in developing new customer relationships and support the long-term growth of the Company." Operating results for the three months ended March 31, 2007 are as follows: Net interest income decreased 5.3 percent to $22.1 million for the 2007 first quarter compared to the 2006 first quarter. The primary reason for the decrease in net interest income was a 43 basis point decrease in the tax equivalent net interest margin. The decrease was partially offset by increases in average federal funds sold of $43.5 million, average securities of $43.8 million, and average net loans of $114.4 million. Total average interest earning assets increased $201.7 million, or 7.5 percent, for the three months ended March 31, 2007 compared to the three months ended March 31, 2006. The net interest margin may continue to be negatively affected if the U.S. Treasury yield curve maintains an inverted position resulting in short- term interest rates at higher levels than medium- to long-term interest rates, or begins to flatten resulting in short-term interest rates at similar levels to medium- and long-term interest rates. If short-term interest rates were to decrease resulting in a steepening of the U.S. Treasury yield curve, the net interest margin would be positively affected. The provision for credit losses increased to $347,000 in the first quarter of 2007 compared to $309,000 for the first quarter of 2006. The increase was primarily due to growth in net loans outstanding combined with a $370,000 increase in net charge-offs for the three months ended March 31, 2007 compared to the 2006 first quarter. Non-interest income decreased $0.2 million to $1.7 million for the 2007 first quarter compared to the 2006 first quarter. The decrease was primarily due to decreases in loan prepayment fees and credit card related income. Non-interest expenses increased $0.6 million, or 4.5 percent, to $13.6 million for the 2007 first quarter compared to the 2006 first quarter. The increase was primarily due to increases in salaries and employee benefits expense related to stock option expense and medical costs; professional fees related to a previous non-performing real estate construction loan held by the Bank's wholly-owned subsidiary, Dutch Hill Realty Corp.; and occupancy and equipment expense from the opening of branch locations and maintenance contracts on new equipment purchased. The increase in non-interest expenses was partially offset by a decrease in advertising and business development expense primarily due to less advertising costs incurred. The effective rate for the provision for income taxes for the 2007 first quarter decreased to 32.4 percent from 32.6 percent compared to the 2006 first quarter. The Company operates through its banking subsidiary, Union State Bank, a commercial bank currently with 30 branches, of which 28 are located in Rockland, Westchester, and Orange Counties, New York, and one branch each in Stamford, Connecticut, and New York City, New York. The Bank also operates four loan production offices in Rockland, Westchester, and Orange Counties, New York, and Stamford, Connecticut. Further information on the Company can be found on the Bank's website at http://www.unionstate.com/. Forward-Looking Statements: This Press Release contains a number of "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward- looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "intend," "should," "will," "would," "could," "may," "planned," "estimated," "potential," "outlook," "predict," "project" and similar terms and phrases, including references to assumptions. Forward-looking statements are based on various assumptions and analyses made by us in light of our management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non- occurrence of events may be subject to circumstances beyond our control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins or affect the value of investments; changes in deposit flows, loan demand or real estate values may adversely affect our business; changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently; general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the securities markets or the banking industry may be less favorable than we currently anticipate; legislative or regulatory changes may adversely affect our business; applicable technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than we anticipate. The Company's forward-looking statements are only as of the date on which such statements are made. By making any forward-looking statements, the Company assumes no duty to update them to reflect new, changing or unanticipated events or circumstances. You should consider these risks and uncertainties in evaluating forward-looking statements and you should not place undue reliance on these statements. U.S.B. HOLDING CO., INC. SELECTED FINANCIAL INFORMATION - UNAUDITED (in thousands, except ratios and share amounts) Three Months Ended March 31, Consolidated summary of operations data: 2007 2006 Interest income $46,667 $41,856 Interest expense 24,533 18,494 Net interest income 22,134 23,362 Provision for credit losses 347 309 Non-interest income 1,737 1,957 Non-interest expenses 13,557 12,968 Income before income taxes 9,967 12,042 Provision for income taxes 3,226 3,927 Net income $6,741 $ 8,115 Consolidated common share data: Basic earnings per share $0.31 $0.37 Diluted earnings per share 0.30 0.36 Weighted average shares 21,902,371 21,723,833 Adjusted weighted average shares 22,564,980 22,724,986 Cash dividends per share $0.15 $0.14 Selected income statement data for the period ended: Return on average total assets 0.91% 1.16% Return on average common stockholders' equity 11.95% 15.73% Efficiency ratio 55.34% 49.95% Net interest spread - tax equivalent 2.96% 3.46% Net interest margin - tax equivalent 3.16% 3.59% March 31, December 31, March 31, Selected balance sheet data at period end: 2007 2006 2006 Securities available for sale, at estimated fair value $422,870 $431,294 $409,940 Securities held to maturity 750,874 751,948 746,790 Loans, net of unearned income 1,615,895 1,593,420 1,498,955 Allowance for loan losses 15,959 16,034 15,449 Total assets 2,948,197 2,923,247 2,799,686 Deposits 1,935,125 1,896,369 1,796,162 Borrowings 697,638 708,015 712,011 Subordinated debt issued in connection with corporation- obligated mandatory redeemable capital securities of subsidiary trusts 61,858 61,858 61,858 Stockholders' equity 227,934 223,436 207,017 Tier 1 capital $291,532 $287,232 $272,426 Book value per common share $10.41 $10.20 $9.52 Common shares outstanding 21,905,092 21,902,023 21,753,733 Selected balance sheet financial ratios: Leverage ratio 9.86% 9.75% 9.79% Allowance for loan losses to total loans 0.99% 1.01% 1.03% Non-performing assets to total assets 0.33% 0.34% 0.29% U.S.B. HOLDING CO., INC. AVERAGE BALANCE INFORMATION - UNAUDITED Three Months Ended March 31, 2007 2006 (000's) ASSETS Federal funds sold $64,467 $20,954 Securities (1) 1,220,606 1,176,841 Loans (2) 1,592,661 1,478,222 Interest earning assets 2,877,734 2,676,017 Assets $2,959,526 $2,787,752 LIABILITIES AND STOCKHOLDERS' EQUITY Non-interest bearing deposits $305,812 $313,746 Interest bearing deposits 1,659,949 1,550,149 Total deposits 1,965,761 1,863,895 Borrowings 701,279 638,403 Subordinated debt issued in connection with corporation-obligated mandatory redeemable capital securities of subsidiary trusts 61,858 61,858 Interest bearing liabilities 2,423,086 2,250,410 Stockholders' Equity $225,631 $206,352 (1) Securities exclude the mark-to-market adjustment required by SFAS No. 115. (2) Loans are net of both the unearned income and the allowance for loan losses. Nonaccruing loans are included in average balances for purposes of computing average loans, average earning assets, and total assets. U.S.B. HOLDING CO., INC. SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED Consolidated Balance Sheet Data at March 31, 2007 2006 (000's) Commercial (time, demand, and installment) loans $190,302 $174,279 Construction and real estate secured loans 473,152 377,064 Commercial mortgages 569,636 580,718 Residential mortgages 288,823 278,558 Home equity loans 83,829 79,967 Personal installment loans 1,864 1,572 Credit card loans 6,863 6,381 Other loans 3,301 3,043 Deferred commitment fees 1,875 2,627 Intangibles 2,296 3,517 Goodwill 1,380 1,380 Nonaccrual loans 9,620 8,128 Restructured loans 125 131 Reserve for unfunded loan commitments and standby letters of credit 976 1,003 Non-interest bearing deposits 273,970 298,449 Interest bearing deposits 1,661,155 1,497,713 Consolidated Income Statement Data for the Three Months Ended March 31, 2007 2006 (000's) Interest income - tax equivalent $47,295 $42,502 Net interest income - tax equivalent 22,762 24,008 Deposit service charges 820 829 Other income 917 1,128 Salaries and employee benefits expense 8,694 8,264 Occupancy and equipment expense 2,042 1,948 Advertising and business development expense 462 602 Professional fees expense 480 373 Communications expense 387 346 Stationery and printing expense 153 153 Amortization of intangibles 276 285 Other expense 1,063 997 Net charge-offs 497 127 DATASOURCE: U.S.B. Holding Co., Inc. CONTACT: Thomas M. Buonaiuto, Executive Vice President & Chief Financial Officer, U.S.B. Holding Co., Inc., +1-845-365-4615 Web site: http://www.unionstate.com/

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