USA Bank Reports Improving Operating Results for the Quarter Ended September 30, 2008
18 November 2008 - 9:00AM
Marketwired
USA Bank (OTCBB: USBK) reported a net loss of $118 thousand ($0.02
per share) for the quarter ended September 30, 2008, which is a
marked improvement compared to the net loss of $843 thousand ($0.15
per share) for the quarter ended September 30, 2007. This marks the
fourth successive quarter of reduced losses by the Bank. For the
nine months ended September 30, 2008, the Bank's net loss was
$1,247,000 ($0.22 per share) as compared to a net loss of
$2,838,000 ($0.49 per share) for the nine months ended September
30, 2007.
Noteworthy, the Bank's quarterly operating losses for each of
the three quarters of 2008 show a very good improving trend, with
the 1st quarter's operating loss being $746 thousand, the 2nd
quarter's operating loss being $383 thousand, and the 3rd quarter's
loss being the aforementioned $118 thousand.
The Bank continues to leverage upon its capital base with
quality loan growth, which is reflected in the $536 thousand
increase in interest income in the third quarter of 2008 as
compared to the third quarter of 2007, which has contributed to the
$342 thousand increase in net interest income for the same period.
Also benefiting the third quarter 2008 was the recognition of a
gain on the sale of securities of $86 thousand and a $205 thousand
reduction in salaries and employee benefits, primarily reflecting
staff reductions since September 30, 2007. The third quarter of
2008 also reflects a $167,000 combined reduction in gains on loan
sales and fee income from the brokering of loans, which partially
reflects the volatile mortgage market and partially reflects the
Bank's focus on traditional commercial banking. There was also an
unfavorable variance in FDIC insurance expense, which was $89
thousand for the third quarter of 2008 (as compared to $21 thousand
for the quarter ended September 30, 2007), reflecting increases in
both deposit volume and insurance rates.
Total assets increased $26.2 million (15%) to $195.7 million at
September 30, 2008 from $169.5 million at December 31, 2007. As of
September 30, 2008, total deposits have increased to $151.9
million, an increase of $29.0 million, or 24%, since year end 2007.
As of September 30, 2008, total gross loans have increased to
$149.6 million, which represents an increase of $42.6 million, or
40%, since year end 2007. Capital ratios continue to be strong,
with Tier One Capital to average assets of 10.77%, Tier One Capital
to risk-weighted assets of 12.78%, and Total Capital to
risk-weighted assets of 13.92%.
President and CEO Gentile stated that "results continue to show
improvement and we are performing essentially in line with our
revised business plan/budget. Legal and professional fees continue
to have a negative impact on operating results, with such costs
aggregating $319 thousand during the recent quarter." He further
noted, "I am pleased that our total average cost of funds is
continuing to decline to 4.05% for the 3rd quarter 2008; it is down
from 4.80% during the 3rd quarter 2007. We continually attempt to
reduce these costs by attracting core deposit accounts through our
enhanced calling programs, remote deposit capture program, and
compensating balances from commercial loan customers."
Mr. Gentile also indicated that "asset quality remains
manageable, with non-performing loans aggregating $4.2 million at
September 30, 2008, which represents an approximate $600 thousand
increase from the $3.6 million in non-performing loans at year end
2007. The underlying collateral real estate of one loan previously
included in the non-performing category has been transferred to
Other Real Estate Owned, as a result of foreclosure in June 2008,
in the amount of $2.4 million. A recent appraisal on this property
shows a $2.9 million value."
Mr. Gentile further stated that "the recessionary global
economic climate and current declining local real estate market,
will make the achievement of profitability in the near term, a
major challenge." He also stated that "we remain optimistic, that
the closer scrutiny being applied to our large existing commercial
real estate and construction loan portfolios, should help
ameliorate any potential loan quality concerns. However, any
collateral deterioration which may occur if real estate values
continue to erode, which cannot be predicted with any certainty,
will obviously impact future operations, as it will result in the
need to allocate additional provisions for loan loss expenses and
possible charge-offs. Prudent underwriting has mostly shielded our
Bank to date, and current additional safeguards in our underwriting
processes should serve to bolster future credit quality.
Additionally, the Bank's Board of Directors successfully negotiated
a buy out agreement with the landlord for the approximate 12
thousand square feet of space at our administrative offices at 800
Westchester Avenue in Rye Brook, NY, which will serve to save the
Bank considerable future rental expenses from February 2009 through
the lease's termination date of May 2011. Nearly all of the staff
will be relocated to the Bank's Main Office facility in Port
Chester, NY, with the balance of the staff being relocated to a
prepaid office site in Greenwich, Connecticut."
"Safe Harbor" Statement under Private Securities Litigation
Reform Act of 1995
Some of the statements contained in this press release may
include forward-looking statements which reflect our current views
with respect to future events and financial performance. Statements
which include the words "expect," "intend," "plan," "believe,"
"project," "anticipate" and similar statements of future or
forward-looking nature identify forward-looking statements for
purposes of the federal securities laws or otherwise. All
forward-looking statements address matters that involve risks and
uncertainties. Accordingly, there are or will be important factors
that could cause actual results to differ materially from those
indicated in these statements or that could adversely affect the
holders of our common stock.
These factors include, but are not limited to, those outlined in
the Bank's Annual Report on Form 10-KSB for the year ended December
31, 2007, which was filed with the Federal Deposit Insurance
Corporation and is publicly available from the FDIC's Accounting
& Securities Disclosure Section, 550 17th Street, N.W.,
Washington, D.C. 20429 and on the Bank's website at
www.usa-bank-online.com.
Contact: Ronald J. Gentile President & CEO USA Bank
Telephone: 914-417-3205 800 Westchester Avenue Rye Brook, NY
10573
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