ORANGEBURG, N.Y., Oct. 27 /PRNewswire-FirstCall/ -- Thomas E.
Hales, Chairman of the Board of U.S.B. Holding Co., Inc. (the
"Company") (NYSE:UBH), the parent company of Union State Bank (the
"Bank"), with consolidated assets of $3.0 billion, today announced
that the Company's net income for the three months ended September
30, 2005 was $8.4 million compared to $7.5 million for the three
months ended September 30, 2004, an increase of 12.1 percent.
Diluted earnings per common share for the quarter ended September
30, 2005 was $0.37 compared to $0.34 in the prior year period, an
increase of 8.8 percent. The Company's third quarter 2005 net
income resulted in a 17.05 percent return on average common
stockholders' equity and a 1.18 percent return on average total
assets, as compared to 17.47 percent and 1.02 percent,
respectively, for the prior year period. For the nine months ended
September 30, 2005, net income was $24.6 million compared to $21.9
million for the nine months ended September 30, 2004, an increase
of 12.4 percent. Diluted earnings per common share was $1.10 for
the nine months ended September 30, 2005 compared to $0.98 in the
prior year period, an increase of 12.2 percent. The Company's net
income for the nine months ended September 30, 2005 resulted in a
17.21 percent return on average common stockholders' equity and a
1.17 percent return on average total assets as compared to 17.00
percent and 1.00 percent, respectively, for the 2004 period. The
increases in the 2005 third quarter and nine months ended September
30, 2005 net income and diluted earnings per common share compared
to the 2004 periods are due to an increase in net interest income
of $1.3 million and $6.1 million, respectively, and gains on sales
of loans, combined with reductions in the provision for credit
losses and the effective rate for the provision for income taxes.
The increases in net income for both 2005 periods were partially
offset by an increase in non-interest expenses and a decrease in
non-interest income, as compared to the prior year periods. The
nine months ended September 30, 2004 also included gains on
securities transactions of $1.2 million ($0.6 million after income
tax and incentive compensation effect), while there were no gains
on securities transactions for the 2005 period. Mr. Hales stated
that, "The Company's increase in its core revenue, net interest
income, combined with offering competitive products delivered with
an exceptional level of service, has significantly contributed to
the net income increases in both 2005 periods. The Bank's officers
and employees continue to prudently operate our Company by working
to expand the Bank's customer base and controlling expenses as
evidenced by an efficiency ratio of approximately 51 percent for
both 2005 periods." Mr. Raymond J. Crotty, President and Chief
Operating Officer of the Company and the Bank, added, "The Bank has
prudently managed interest rate risk and credit risk in 2005 while
increasing year-to-date net income at a double digit rate. Mr.
Crotty also noted that, "The Company's current common stock cash
dividend of $0.14 per share had been effectively increased by 5.0
percent after considering the 5.0 percent common stock dividend,
which was distributed in the third quarter. These dividend
increases are due to the Company's consistently strong earnings and
strong capital position." Net interest income increased 5.7 percent
to $23.8 million for the quarter ended September 30, 2005 and 9.4
percent to $70.7 million for the nine months ended September 30,
2005 compared to the prior year third quarter and nine month
periods, respectively. The primary reason for the increase in net
interest income in both 2005 periods was due to a significant
increase in the tax equivalent net interest margin to 3.62 percent
and 3.61 percent for the three and nine months ended September 30,
2005, as compared to 3.33 percent and 3.17 percent for the 2004
periods, respectively. These increases were partially offset by
decreases in average interest earning assets of $69.4 million, or
2.5 percent, and $113.7 million, or 4.1 percent, for the September
30, 2005 three and nine month periods, respectively, as compared to
the prior year periods. Mr. Hales commented that, "The Company's
net interest income has significantly benefited in 2005 from the
net interest margin increases as a result of the Federal Reserve
increasing short-term interest rates. This was a result of
carefully positioning the asset/liability structure of the balance
sheet. We did an excellent job in managing interest rate risk." Mr.
Hales added, "However, the Company's balance sheet is currently in
a relatively neutral asset/liability rate sensitive position at
September 30, 2005. The Company's net interest income could be
negatively affected and compression of the net interest margin may
occur if the U.S. treasury yield curve maintains a relatively flat
position, continues to flatten further, or becomes inverted
resulting in short-term interest rates at higher levels than
medium- to long-term interest rates." The Company also continues to
experience acceleration of loan payments, particularly in
construction and land development loans, and increased competition
for loan customers. Loans outstanding have decreased $38.4 million
during the nine months ended September 30, 2005. A continued
decrease in loans outstanding can also negatively affect net
interest income. The provision for credit losses remained
relatively flat for the 2005 third quarter and decreased to $0.6
million for the nine months ended September 30, 2005 compared to
$0.7 million for the nine months ended September 30, 2004. The 2005
nine-month decrease was due to a lower level of loan growth in the
2005 period primarily as a result of prepayments on commercial
loans. Non-performing assets continue to remain at low levels in
relation to the overall loan portfolio. The ratio of non-performing
assets to total assets at September 30, 2005 was 0.33 percent
compared to 0.14 percent at September 30, 2004. As of September 30,
2005, loans related to two different customer relationships
aggregating $8.8 million, which are not on nonaccrual status, are
potential problem loans that may result in the loans being placed
on nonaccrual status in the near future. All the loans in both the
relationships are well secured and supported by personal
guarantees. Non-interest income decreased $0.2 million and $0.3
million for the three and nine months ended September 30, 2005,
respectively, compared to the prior 2004 periods. The decreases for
both periods were primarily due to decreases in service charges on
deposit accounts, letter of credit fees, and loan prepayment fees,
partially offset by increases in fee income on investment product
sales and commission-based products. During the 2005 third quarter,
$7.2 million of residential mortgages were sold to Freddie Mac. The
transaction resulted in gains on sales of loans of $0.3 million.
Non-interest expenses increased 2.7 percent to $13.4 million and
4.9 percent to $39.7 million for the three and nine months ended
September 30, 2005, respectively, as compared to the prior year
periods. The increase in non-interest expense of $0.4 million and
$1.9 million for the three and nine months ended September 30,
2005, respectively, as compared to the prior year periods was
primarily a result of increases in salaries and benefits of $0.7
million and $2.3 million, resulting from higher levels of incentive
and deferred compensation, and a decrease in the deferral of loan
origination expenses. Also contributing to the increase in
non-interest expenses for the nine months ended September 30, 2005
was an increase in medical benefits, and for the 2005 third
quarter, an increase in advertising and business development
expense of $0.2 million compared to the prior year periods. The
increases in non-interest expenses for the third quarter and nine
months ended September 30, 2005 were partially offset by decreases
of $0.1 million in both occupancy and equipment expenses and
communication expense, as compared to the 2004 periods. Also,
partially offsetting the increase in non- interest expense for the
nine month 2005 period was a decrease in advertising and business
development expense of $0.1 million, as compared to the nine months
ended September 30, 2004, and for the quarter ended September 30,
2005, a decrease in professional fees expense of $0.3 million as
compared to the quarter ended September 30, 2004. The Bank's
management remains focused on effectively controlling expenses
while continuing to provide exceptional customer service. The
effective rate for the provision for income taxes for the three and
nine months ended September 30, 2005 decreased to 32.4 percent and
32.1 percent, respectively, compared to 33.8 percent and 33.9
percent for the 2004 periods. The decreases in both 2005 periods
were primarily due to a decrease in the income tax reserves as a
result of the satisfactory completion of Federal and State tax
examinations for prior income tax years. The Company operates
through its banking subsidiary, Union State Bank, a commercial bank
currently with 28 branches, of which 25 are located in Rockland and
Westchester Counties, New York, and one branch each in Stamford,
Connecticut, Goshen, Orange County, New York, and Manhattan, New
York City. 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, 2005 2004 2005 2004 Consolidated
summary of operations: Interest income $117,259 $107,026 $40,546
$36,750 Interest expense 46,571 42,400 16,761 14,258 Net interest
income 70,688 64,626 23,785 22,492 Provision for credit losses 571
664 95 110 Non-interest income 5,555 5,851 1,849 2,008 Gains on
securities transactions - 1,197 - - Gains on sales of loans 314 -
314 - Non-interest expenses 39,722 37,863 13,390 13,035 Income
before income taxes 36,264 33,147 12,463 11,355 Provision for
income taxes 11,633 11,234 4,032 3,836 Net income $24,631 $21,913
$8,431 $7,519 Consolidated common share data:(1) Basic earnings per
share $1.14 $1.02 $0.39 $0.35 Diluted earnings per share $1.10
$0.98 $0.37 $0.34 Weighted average shares 21,567,925 21,427,984
21,685,896 21,340,626 Adjusted weighted average shares 22,466,223
22,373,511 22,605,328 22,278,580 Cash dividends per share $0.40
$0.32 $0.14 $0.12 September 30, December 31, September 30, Selected
balance sheet data at period end: 2005 2004 2004 Securities
available for sale, at estimated fair value $404,370 $589,572
$901,619 Securities held to maturity 721,789 502,201 503,612 Loans,
net of unearned income 1,469,703 1,508,098 1,487,599 Allowance for
loan losses 15,163 15,226 15,134 Total assets 2,983,847 2,746,270
3,138,932 Deposits 2,076,835 1,858,218 1,996,437 Borrowings 592,255
625,032 880,785 Subordinated debt issued in connection with
Corporation- Obligated mandatory redeemable capital securities of
subsidiary trusts 61,858 61,858 61,858 Stockholders' equity 200,024
182,046 179,071 Tier 1 capital 261,478 241,494 237,161 Book value
per common share(1) $9.20 $8.52 $8.39 Common shares outstanding(1)
21,732,559 21,364,155 21,340,684 Selected balance sheet financial
ratios: Leverage ratio 9.15% 8.15% 8.07% Allowance for loan losses
to total loans 1.03% 1.01% 1.02% Non-performing assets to total
assets 0.33% 0.06% 0.14% Selected income statement Nine Months
Ended Three Months Ended data for the period ended: Sept. 30, Sept.
30, Sept. 30, Sept. 30, 2005 2004 2005 2004 Return on average total
assets 1.17% 1.00% 1.18% 1.02% Return on average common
stockholders' equity 17.21% 17.00% 17.05% 17.47% Efficiency ratio
50.93% 52.54% 51.02% 52.08% Net interest spread - tax equivalent
3.50% 3.10% 3.53% 3.27% Net interest margin - tax equivalent 3.61%
3.17% 3.62% 3.33% U.S.B. HOLDING CO., INC. AVERAGE BALANCE
INFORMATION - UNAUDITED Nine Months Ended Three Months Ended
September 30, September 30, 2005 2004 2005 2004 ASSETS (000's)
(000's) Federal funds sold $55,226 $28,905 $82,855 $25,321
Securities(2) 1,120,353 1,283,481 1,135,286 1,260,066 Loans(3)
1,500,116 1,477,016 1,480,898 1,483,012 Earning assets 2,675,695
2,789,402 2,699,039 2,768,399 Total Assets $2,801,004 $2,921,867
$2,861,898 $2,946,521 LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits $341,446 $316,251 $354,861 $333,323
Interest bearing deposits 1,551,099 1,555,069 1,576,474 1,551,713
Total deposits 1,892,545 1,871,320 1,931,335 1,885,036 Borrowings
611,937 780,072 602,716 745,991 Subordinated debt issued in
connection with Corporation-Obligated mandatory redeemable capital
securities of subsidiary trusts 61,858 58,643 61,858 61,858
Interest bearing liabilities 2,224,894 2,393,784 2,241,048
2,359,562 Stockholders' Equity $190,761 $171,790 $197,818 $172,179
U.S.B. HOLDING CO., INC. SUPPLEMENTAL FINANCIAL INFORMATION -
UNAUDITED Consolidated Balance Sheet Data At September 30, 2005
2004 (000's) Commercial (time and demand) loans $159,892 $162,912
Construction and land development loans 351,206 390,654 Commercial
mortgages 609,128 600,419 Residential mortgages 259,336 250,286
Home equity loans 81,780 73,495 Personal installment loans 1,632
2,103 Credit card loans 6,564 6,111 Other loans 2,995 5,770
Deferred commitment fees 2,830 4,151 Intangibles 4,153 5,385
Goodwill 1,380 1,457 Nonaccrual loans 9,902 4,264 Restructured
loans 134 139 Reserve for unfunded loan commitments and standby
letters of credit(4) 1,116 558 Non-interest bearing deposits
442,211 403,713 Interest bearing deposits 1,634,624 1,592,724
Consolidated Income Statement Data for the Nine Months Ended Three
Months Ended September 30, September 30, 2005 2004 2005 2004
(000's) (000's) Interest income - FTE $119,007 $108,617 $41,159
$37,277 Net interest income - FTE 72,436 66,217 24,398 23,019
Deposit service charges 2,749 3,206 918 1,038 Other income 2,806
2,645 931 970 Salaries and employee benefits expense 24,866 22,571
8,277 7,554 Occupancy and equipment expense 5,783 5,863 1,921 2,049
Advertising and business development expense 1,974 2,099 804 620
Professional fees expense 1,726 1,739 588 875 Communications
expense 970 1,104 302 424 Stationery and printing expense 423 532
110 148 Amortization of intangibles 861 835 285 290 Other expense
3,119 3,120 1,103 1,075 Net charge-offs 61 265 68 130 (1) Share
amounts are adjusted for the five percent common stock dividend
distributed in September 2005. (2) Securities exclude
mark-to-market adjustment required by FASB No. 115. (3) Loans are
net of unearned discount 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.
(4) The reserve for standby letters of credit of $0.4 million in
2004 was included in the allowance for loan losses. DATASOURCE:
U.S.B. Holding Co., Inc. CONTACT: Steven T. Sabatini, Senior
Executive V.P. & Chief Financial Officer, U.S.B. Holding Co.,
Inc., +1-845-365-4615 Web site: http://www.unionstate.com/
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