UBH Usb Holdings CO

ORANGEBURG, N.Y., Oct. 24 /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 2007 third quarter was $5.8 million, or $0.26 per share (diluted), compared to $8.1 million, or $0.36 per share (diluted), for the 2006 third quarter, a decrease of $2.3 million, or 28.8 percent. For the three months ended September 30, 2007, the Company incurred acquisition costs of $2.3 million related to the pending acquisition of the Company by KeyCorp. The acquisition costs resulted in a decrease in net income and earnings per share (diluted) after taxes of $1.5 million and $0.06, respectively. For the nine months ended September 30, 2007, net income was $19.1 million, or $0.85 per share (diluted), compared to $23.5 million, or $1.03 per share (diluted), for the nine months ended September 30, 2006, a decrease of $4.4 million, or 18.9 percent. Acquisition costs of $2.3 million for the nine months ended September 30, 2007 resulted in a decrease in net income and earnings per share (diluted) after taxes of $1.5 million and $0.07, respectively. Financial highlights as of and for the three months ended September 30, 2007 compared to the September 30, 2006 period are as follows: -- Consolidated total assets increased $66.3 million, or 2.2 percent, to $3.1 billion. -- Net loans increased $28.7 million, or 1.9 percent, to $1.6 billion. -- Non-performing assets to total assets remained at a low level of 0.31 percent. -- Deposits increased $45.9 million, or 2.3 percent, to $2.0 billion. -- Net interest margin on a fully tax equivalent basis declined 24 basis points from 3.41 percent in 2006 to 3.17 percent in 2007, primarily due to an increase in rates on interest bearing deposits. -- Acquisition costs of $2.3 million were incurred related to the pending acquisition of the Company by KeyCorp. -- Non-interest expenses increased $0.3 million, or 2.4 percent, to $13.4 million, primarily due to increases in salaries and employee benefits expense related to stock option expense and medical costs. Financial highlights for the nine months ended September 30, 2007 compared to the September 30, 2006 period are as follows: -- Net interest margin on a fully tax equivalent basis declined 35 basis points to 3.14 percent, primarily due to an increase in rates on interest bearing deposits. -- The provision for credit losses decreased $0.7 million to $0.7 million, primarily due to the elimination of a specific reserve that was required for one non-performing real estate construction loan outstanding during 2006. -- Acquisition costs of $2.3 million were incurred related to the pending acquisition of the Company by KeyCorp. -- Non-interest expenses increased $2.1 million, or 5.5 percent, to $41.0 million, primarily due to increases in salaries and employee benefits expense related to stock option expense and medical costs, occupancy and equipment expense, and professional fees expense. Operating results for the 2007 third quarter and nine months ended September 30, 2007 are as follows: Net interest income decreased $0.7 million, or 3.0 percent, to $22.5 million for the 2007 third quarter and decreased $2.7 million, or 3.9 percent, to $66.7 million for the nine months ended September 30, 2007 compared to the 2006 third quarter and nine months ended September 30, 2006, respectively. The primary reason for the decrease in net interest income was a reduction in the tax equivalent net interest margin as a result of increases in interest bearing deposit costs. The reduction in interest rate spreads between interest earning assets and interest bearing liabilities in the 2007 periods compared to the 2006 periods has contributed to the decrease in net income. The decreases in net interest income were partially offset by increases in average interest earning assets of $124.6 million, or 4.5 percent, and $186.2 million, or 6.8 percent, for the September 30, 2007 three and nine month periods, respectively, compared to the 2006 periods. The provision for credit losses decreased $0.7 million for the September 30, 2007 nine month period compared to the 2006 period. The decrease in 2007 is primarily as a result of the elimination of a specific reserve that was required for one non-performing real estate construction loan outstanding during 2006. The decrease resulted in an allowance for loan losses to total loans ratio of 1.00 percent at September 30, 2007 compared to 1.01 percent and 1.03 percent at December 31, 2006 and September 30, 2006, respectively. As of September 30, 2007, nonaccrual loans increased to $9.7 million compared to $3.7 million as of September 30, 2006. Nonaccrual loans as of September 30, 2007 primarily consisted of one customer relationship aggregating $7.4 million, which is supported by real estate collateral and personal guarantees. Raymond J. Crotty, President and Chief Operating Officer of the Company and the Bank, added that "The Bank's credit quality in its loan portfolio continues to be unaffected by the sub-prime market. The credit quality and underwriting standards of Union State Bank have performed exceptionally today as they have during all economic cycles since our doors opened for business." Acquisition costs for both the three and nine months ended September 30, 2007 were $2.3 million as a result of the pending acquisition of the Company by KeyCorp. The acquisition costs include fees paid to the Company's investment banker and external legal counsel. Non-interest expenses increased $0.3 million to $13.4 million and $2.1 million to $41.0 million for the three and nine months ended September 30, 2007, respectively, as compared to the 2006 periods. The increase in non- interest expenses for the three months ended September 30, 2007 was primarily due to an increase in salaries and employee benefits expense related to stock option expense and medical costs. The increase in non-interest expenses for the nine months ended September 30, 2007 was primarily due to increases in salaries and employee benefits expense related to stock option expense and medical costs; occupancy and equipment expense related to higher energy costs and expenses for new Bank locations; and professional fees related to a previous non-performing real estate construction loan held by the Bank's wholly-owned subsidiary, Dutch Hill Realty Corp. Thomas E. Hales, Chairman of the Board and Chief Executive Officer of the Company and the Bank, stated that "Union State Bank's Board of Directors, management team, and employees have been diligent and dedicated in servicing our customers and supporting the communities where we do business. I could not be more proud of an organization that has consistently and effectively applied the fundamentals of banking and business since its inception. The Company's ability to continually pay quarterly cash dividends to stockholders while always remaining well-capitalized, report a non-performing assets to total assets ratio of 0.31 percent, and increase deposits and loans in 2007 compared to 2006 are some of the examples of our exceptional fundamentals." The Company operates through its banking subsidiary, Union State Bank, a commercial bank currently with 31 branches, of which 29 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) Nine Months Ended Three Months Ended September 30, September 30, 2007 2006 2007 2006 Consolidated summary of operations data: Interest income $142,295 $130,927 $47,570 $45,625 Interest expense 75,601 61,550 25,103 22,475 Net interest income 66,694 69,377 22,467 23,150 Provision for credit losses 693 1,344 (11) 37 Non-interest income 5,261 5,238 1,838 1,679 Gains on securities transactions 6 431 4 426 Acquisition costs 2,337 - 2,337 - Non-interest expenses 40,994 38,863 13,423 13,105 Income before income taxes 27,937 34,839 8,560 12,113 Provision for income taxes 8,880 11,354 2,758 3,968 Net income $19,057 $23,485 $ 5,802 $8,145 Consolidated common share data: Basic earnings per share $0.87 $1.08 $0.26 $0.37 Diluted earnings per share $0.85 $1.03 0.26 $0.36 Weighted average shares 21,934,259 21,746,909 22,006,642 21,751,565 Adjusted weighted average shares 22,442,760 22,708,031 22,551,734 22,641,540 Cash dividends per share $0.45 $0.42 $0.15 $0.14 September 30, December 31, September 30, 2007 2006 2006 Selected balance sheet data at period end: Securities available for sale, at estimated fair value $495,806 $431,294 $440,385 Securities held to maturity 713,011 751,948 738,124 Loans, net of unearned income 1,563,191 1,593,420 1,534,456 Allowance for loan losses 15,622 16,034 15,822 Total assets 3,070,864 2,923,247 3,004,520 Deposits 2,035,892 1,896,369 1,990,037 Borrowings 720,206 708,015 708,177 Subordinated debt issued in connection with corporation-obligated mandatory redeemable capital securities of subsidiary trusts 51,548 61,858 61,858 Stockholders' equity 236,902 223,436 217,768 Tier 1 capital $291,104 $287,232 $281,956 Book value per common share $ 10.76 $10.20 $ 10.02 Common shares outstanding 22,022,412 21,902,023 21,741,169 Selected balance sheet financial ratios: Leverage ratio 9.65% 9.75% 9.75% Allowance for loan losses to total loans 1.00% 1.01% 1.03% Non-performing assets to total assets 0.31% 0.34% 0.12% Nine Months Ended Three Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2007 2006 2007 2006 Selected income statement data for the period: Return on average total assets 0.85% 1.11% 0.77% 1.13% Return on average common stockholders' equity 11.08% 14.94% 9.97% 15.27% Efficiency ratio* 55.55% 50.80% 53.92% 51.53% Net interest spread - tax equivalent 2.95% 3.34% 2.94% 3.25% Net interest margin - tax equivalent 3.14% 3.49% 3.17% 3.41% * Efficiency ratio excludes gains on securities transactions and acquisition costs. U.S.B. HOLDING CO., INC. AVERAGE BALANCE INFORMATION - UNAUDITED Nine Months Ended Three Months Ended September 30, September 30, 2007 2006 2007 2006 (000's) (000's) ASSETS Federal funds sold $59,299 $27,472 $50,400 $30,029 Securities(1) 1,253,314 1,209,677 1,279,200 1,258,667 Loans(2) 1,596,831 1,486,081 1,577,360 1,493,654 Interest earning assets 2,909,444 2,723,230 2,906,960 2,782,350 Assets $ 2,998,160 $2,832,270 $3,021,072 $2,894,790 LIABILITIES AND STOCKHOLDERS' EQUITY Non-interest bearing deposits $309,076 $311,648 $318,383 $314,263 Interest bearing deposits 1,669,990 1,537,360 1,646,080 1,548,224 Total deposits 1,979,066 1,849,008 1,964,463 1,862,487 Borrowings 718,884 685,705 734,441 717,994 Subordinated debt issued in connection with corporation- obligated mandatory redeemable capital securities of subsidiary trusts 58,195 61,858 51,548 61,858 Interest bearing liabilities 2,447,069 2,284,923 2,432,069 2,328,076 Stockholders' Equity $229,301 $209,566 $232,796 $213,373 (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 September 30, 2007 2006 (000's) Commercial (time and demand) loans $159,072 $167,793 Construction and real estate secured loans 461,260 406,312 Commercial mortgages 556,543 585,322 Residential mortgages 290,553 289,098 Home equity loans 83,316 75,831 Personal installment loans 1,715 1,877 Credit card loans 7,581 6,990 Other loans 4,413 3,266 Deferred commitment fees 1,262 2,033 Intangibles 1,753 2,816 Goodwill 1,380 1,380 Nonaccrual loans 9,652 3,710 Restructured loans 122 127 Reserve for unfunded loan commitments and standby letters of credit 983 1,038 Non-interest bearing deposits 376,824 378,820 Interest bearing deposits 1,659,068 1,611,217 Consolidated Income Statement Data for the Nine Months Ended Three Months Ended September 30, September 30, 2007 2006 2007 2006 (000's) Interest income - tax equivalent $144,135 $ 132,814 $48,158 $46,228 Net interest income - tax equivalent 68,534 71,264 23,055 23,753 Deposit service charges 2,437 2,489 794 826 Other income 2,824 2,749 1,044 853 Acquisition costs 2,337 - 2,337 - Salaries and employee benefits expense 26,414 24,627 8,878 8,363 Occupancy and equipment expense 6,093 5,885 1,991 1,995 Advertising and business development expense 1,746 1,941 505 666 Professional fees expense 1,312 1,153 391 379 Communications expense 1,030 980 338 337 Stationery and printing expense 467 432 143 136 Amortization of intangibles 820 838 272 277 Other expense 3,112 3,007 905 952 Net charge-offs 1,173 754 74 438 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/

Copyright