UBH Usb Holdings CO

ORANGEBURG, N.Y., April 26 /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 $2.8 billion, today announced that the Company's net income for the three months ended March 31, 2006 was $8.1 million, an increase of 9.8 percent compared to $7.4 million for the three months ended March 31, 2005. Diluted earnings per common share was $0.36 for the 2006 first quarter compared to $0.33 for the 2005 first quarter, an increase of 9.1 percent. The Company's return on average common stockholders' equity and return on average total assets for the three months ended March 31, 2006 was 15.73 percent and 1.16 percent compared to 16.03 percent and 1.07 percent for the three months ended March 31, 2005, respectively. The increase in the 2006 first quarter net income and diluted earnings per common share compared to the 2005 first quarter was due to increases in net interest income and non-interest income, and decreases in the provision for credit losses, non-interest expenses and the effective rate for the provision for income taxes. Mr. Hales commented that, "The Company's 9.8 percent increase in net income for the 2006 first quarter is attributable to management's focus despite a challenging interest rate environment." Net interest income increased 1.6 percent to $23.4 million for the three months ended March 31, 2006 compared to the 2005 first quarter. The net interest margin increased to 3.59 percent from 3.53 percent for the three months ended March 31, 2005. Net interest income is the Company's core revenue and is under pressure from a relatively flat U.S. Treasury yield curve. The current slope of the U.S. Treasury yield curve could negatively affect net interest income by causing interest rate margins to compress. Mr. Hales added, "We will continue to evaluate opportunities to leverage our strong capital position. While our focus will be to increase the levels of floating-rate interest earning assets, we will also continue to exercise prudence and patience when making interest rate decisions that in the long-term will positively impact the Company." The provision for credit losses decreased to $309,000 in the first quarter of 2006 compared to $391,000 for the three months ended March 31, 2005. The decrease in the provision for credit losses was due to an overall decrease in the loan portfolio at March 31, 2006 as compared to March 31, 2005. Non- performing assets at March 31, 2006 was $8.1 million compared to $9.0 million at December 31, 2005 and $1.0 million at March 31, 2005. Non-interest income increased $0.1 million to $2.0 million for the three months ended March 31, 2006 compared to the 2005 first quarter. The increase in non-interest income was primarily due to an increase in loan prepayment fees, fees on value added account services, and other miscellaneous income, partially offset by a decrease in service charges on deposit accounts. Non-interest expenses decreased 2.8 percent to $13.0 million for the three months ended March 31, 2006 compared to the 2005 first quarter. The $0.4 million decrease in non-interest expenses was primarily a result of decreases in professional fees of $0.3 million as a result of 2005 expenses for the appeal of an unfavorable ruling by the Superior Court of New Jersey on a non-performing real estate construction loan; salaries and benefits expense of $0.1 million resulting from lower medical benefit costs, partially offset by higher levels of incentive, stock option and deferred compensation expense; and a $0.1 million decrease in occupancy and equipment expense from lower levels of depreciation expense on fixed assets. The effective rate for the provision for income taxes for the three months ended March 31, 2006 decreased to 32.6 percent from 33.3 percent for the 2005 first quarter. Mr. Crotty, President and Chief Operating Officer of the Company, stated that, "Our employees continue to work diligently to increase revenues and reduce operating expenses. These efforts have resulted in an efficiency ratio of under 50 percent for the 2006 first quarter." The Company operates through its banking subsidiary, Union State Bank, a commercial bank currently with 29 branches, of which 26 are in Rockland and Westchester Counties, New York, and one branch each in Stamford, Connecticut, and Manhattan, New York City, and Orange County, 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: 2006 2005 Interest income $41,856 $37,221 Interest expense 18,494 14,233 Net interest income 23,362 22,988 Provision for credit losses 309 391 Non-interest income 1,957 1,827 Non-interest expenses 12,968 13,344 Income before income taxes 12,042 11,080 Provision for income taxes 3,927 3,689 Net income $8,115 $7,391 Consolidated common share data:(1) Basic earnings per share $0.37 $0.34 Diluted earnings per share 0.36 0.33 Weighted average shares 21,723,833 21,437,749 Adjusted weighted average shares 22,724,986 22,423,850 Cash dividends per share $0.14 $0.12 Selected income statement data Return on average total assets 1.16% 1.07% Return on average common stockholders' equity 15.73% 16.03% Efficiency ratio 49.95% 52.61% Net interest spread - tax equivalent 3.46% 3.41% Net interest margin - tax equivalent 3.59% 3.53% March December March Selected balance sheet 31, 31, 31, data at period end: 2006 2005 2005 Securities available for sale, at estimated fair value $409,940 $375,990 $476,168 Securities held to maturity 746,790 746,851 608,438 Loans, net of unearned income 1,498,955 1,474,984 1,526,787 Allowance for loan losses 15,449 15,164 15,501 Total assets 2,799,686 2,758,226 2,762,716 Deposits 1,796,162 1,847,202 1,796,867 Borrowings 712,011 622,159 598,271 Subordinated debt issued in connection with corporation - obligated mandatory redeemable capital securities of subsidiary trusts 61,858 61,858 61,858 Stockholders' equity 207,017 204,153 184,077 Tier 1 capital $272,426 $266,823 $247,273 Common shares outstanding(1) 21,753,733 21,713,805 21,506,744 Book value per common share(1) $9.52 $9.40 $8.56 Selected balance sheet financial ratios: Leverage ratio 9.79% 9.47% 8.99% Allowance for loan losses to total loans 1.03% 1.03% 1.02% Non-performing assets to total assets 0.29% 0.33% 0.03% (1) Share amounts are adjusted for the five percent common stock dividend distributed in September 2005. U.S.B. HOLDING CO., INC. AVERAGE BALANCE INFORMATION - UNAUDITED Three Months Ended March 31, 2006 2005 (000's) ASSETS Federal funds sold $20,954 $59,053 Securities(2) 1,176,841 1,098,886 Loans(3) 1,478,222 1,505,751 Earning assets 2,676,017 2,663,690 Total Assets $2,787,752 $2,758,037 LIABILITIES AND STOCKHOLDERS' EQUITY Non-interest bearing deposits $313,746 $332,106 Interest bearing deposits 1,550,149 1,547,288 Total deposits 1,863,895 1,879,394 Borrowings 638,403 600,962 Subordinated debt issued in connection with corporation-obligated mandatory redeemable capital securities of subsidiary trusts 61,858 61,858 Interest bearing liabilities 2,250,410 2,210,108 Stockholders' Equity $206,352 $184,417 (2) Securities exclude the mark-to-market adjustment required by FASB No. 115. (3) Loans are net of both the 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. U.S.B. HOLDING CO., INC. SUPPLEMENTAL FINANCIAL INFORMATION - UNAUDITED Consolidated Balance Sheet Data at March 31, 2006 2005 (000's) Commercial (time and demand) loans $174,279 $182,829 Construction and land development loans 377,064 428,147 Commercial mortgages 580,718 579,472 Residential mortgages 278,558 246,213 Home equity loans 79,967 80,720 Personal installment loans 1,572 1,832 Credit card loans 6,381 6,059 Other loans 3,043 4,853 Deferred commitment fees 2,627 3,338 Intangibles 3,517 4,772 Goodwill 1,380 1,380 Nonaccrual loans 8,128 960 Restructured loans 131 136 Reserve for unfunded loan commitments and standby letters of credit(4) 1,003 692 Non-interest bearing deposits 298,449 327,501 Interest bearing deposits 1,497,713 1,469,366 Consolidated Income Data for the Three Months Ended March 31, 2006 2005 (000's) Interest income - tax equivalent $ 42,502 $37,770 Net interest income - tax equivalent 24,008 23,537 Deposit service charges 829 904 Other income 1,128 923 Salaries and employee benefits expense 8,264 8,321 Occupancy and equipment expense 1,948 2,050 Advertising and business development expense 602 575 Professional fees expense 373 668 Communications expense 346 341 Stationery and printing expense 153 161 Amortization of intangibles 285 291 Other expense 997 937 Net charge-offs/(recoveries) 127 (34) (4) The reserve for standby letters of credit of $0.4 million in 2005 was included in the allowance for loan losses. DATASOURCE: U.S.B. Holding Co., Inc. CONTACT: Thomas M. Buonaiuto, Executive Vice President & Chief Financial Officer of U.S.B. Holding Co., Inc., +1-845-365-4615 Web site: http://www.unionstate.com/

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