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USB income dips after 'challenging' six months.

Thomas E. Hales, chairman of the Board of U.S.B. Holding Co., Inc., the parent company of Union State Bank announced that the company's net income for the three months ended June 30, 2006 was $7.2 million compared to $8.8 million for the three months ended June 30, 2005, a decrease of $1.6 million, or 18.0 percent.

Diluted earnings per common share for the quarter ended June 30, 2006 was $0.32 compared to $0.39 in the prior year period, a decrease of 17.9 percent. The Company's second quarter 2006 net income resulted in a 13.88 percent return on average common stockholders' equity and a 1.03 percent return on average total assets, as compared to 18.57 percent and 1.26 percent, respectively, for the prior year period.

Hales commented, "The increase in the specific reserve needed for the 2006 second quarter significantly decreased our net income for the period. Non-performing assets to total assets of 0.32 percent are relatively low when considering our $1.5 billion loan portfolio."

He added, "The first six months of 2006 have been very challenging. The interest rate environment and increased competition for loans and deposits will continue to pressure our net interest margin. However, we will continue to promote and maintain our exceptional products and services and remain prudent in pricing loans and deposits, while evaluating opportunities to deploy our capital position."

Raymond J. Crotty, president and chief operating officer of the company and the bank, added, "We continue to effectively control operating expenses even after considering the stock option expense recorded in 2006. Our efficiency ratio of less than 51 percent for both periods in 2006 is evidence of management's efficient use of the Company's resources."

For the six months ended June 30, 2006, net in come was $15.3 million compared to $16.2 million for the six months ended June 30, 2005, a decrease of $0.9 million, or 5.3 percent.

Diluted earnings per common share was $0.67 for the six months ended June 30, 2006 compared to $0.72 in the prior year period, a decrease of 6.9 percent.

The Company's net income for the six months ended June 30, 2006 resulted in a 14.80 percent return on average common stockholders' equity and a 1.10 percent return on average total assets, as compared to 17.28 percent and 1.17 percent, respectively, for the 2005 period.

The decreases in the 2006 second quarter and six months ended June 30, 2006 net income and diluted earnings per common share compared to the 2005 periods were primarily due to a decrease in net interest income and an increase in the provision for credit losses. Net interest income decreased 4.4 percent to $22.9 million for the quarter ended June 30, 2006 and 1.4 percent to $46.2 million for the six months ended June 30, 2006.
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Title Annotation:FINANCE
Publication:Real Estate Weekly
Geographic Code:1USA
Date:Aug 2, 2006
Words:492
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