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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Usb Holdings CO | NYSE:UBH | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.00 | - |
x |
Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
o |
Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
DELAWARE
|
36-3197969
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
100
DUTCH HILL ROAD, ORANGEBURG, NEW YORK
|
10962
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
CLASS
|
NUMBER
OF SHARES
OUTSTANDING
AT NOVEMBER 1, 2007
|
|||
Common
stock, par value
$0.01
per share
|
22,023,291
|
PAGE
NO.
|
||||
PART
I. FINANCIAL INFORMATION
|
||||
ITEM
1.
|
FINANCIAL
STATEMENTS (UNAUDITED)
|
|||
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION AS OF SEPTEMBER 30,
2007
AND DECEMBER 31, 2006
|
1
|
|||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER
30,
2007 AND 2006
|
2
|
|||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER
30,
2007 AND 2006
|
3
|
|||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER
30, 2007 AND 2006
|
4
|
|||
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2007
|
5
|
|||
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2006
|
6
|
|||
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
7
|
|||
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
22
|
||
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
36
|
||
|
||||
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
37
|
||
|
||||
PART
II. OTHER INFORMATION
|
|
|||
|
||||
ITEM
1A.
|
RISK
FACTORS
|
38
|
||
|
||||
ITEM
6.
|
EXHIBITS
|
38
|
||
|
||||
SIGNATURES |
39
|
|
|||||||
September
30,
2007
|
|
December
31,
2006
|
|||||
(000’s,
except share
data)
|
|||||||
ASSETS
|
|||||||
Cash
and due from banks
|
$
|
75,428
|
$
|
33,493
|
|||
Federal
funds sold
|
137,700
|
23,600
|
|||||
Cash
and cash equivalents
|
213,128
|
57,093
|
|||||
Interest
bearing deposits in other banks
|
198
|
175
|
|||||
Securities:
|
|||||||
Available
for sale (at estimated fair value)
|
495,806
|
431,294
|
|||||
Held
to maturity (estimated fair value of $709,033 as of 2007
and
$747,507 as of 2006)
|
713,011
|
751,948
|
|||||
Loans,
net of allowance for loan losses of $15,622 as of 2007 and $16,034
as of
2006
|
1,547,569
|
1,577,386
|
|||||
Premises
and equipment, net
|
13,747
|
13,943
|
|||||
Accrued
interest receivable
|
19,685
|
22,486
|
|||||
Federal
Home Loan Bank of New York stock
|
34,873
|
34,523
|
|||||
Intangible
assets, net
|
1,753
|
2,572
|
|||||
Goodwill
|
1,380
|
1,380
|
|||||
Other
assets
|
29,714
|
30,447
|
|||||
TOTAL
ASSETS
|
$
|
3,070,864
|
$
|
2,923,247
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Liabilities:
|
|||||||
Non-interest
bearing deposits
|
$
|
376,824
|
$
|
294,882
|
|||
Interest
bearing deposits:
|
|||||||
NOW
accounts
|
260,978
|
166,809
|
|||||
Money
market accounts
|
201,355
|
161,531
|
|||||
Savings
deposits
|
373,500
|
372,959
|
|||||
Time
deposits
|
823,235
|
900,188
|
|||||
Total
deposits
|
2,035,892
|
1,896,369
|
|||||
Accrued
interest payable
|
11,799
|
12,274
|
|||||
Dividend
payable
|
3,303
|
3,285
|
|||||
Accrued
expenses and other liabilities
|
11,092
|
12,884
|
|||||
Securities
transactions not yet settled
|
—
|
5,000
|
|||||
Securities
sold under agreements to repurchase
|
593,412
|
606,206
|
|||||
Federal
Home Loan Bank of New York advances
|
126,794
|
101,809
|
|||||
Subordinated
debt issued in connection with corporation-obligated
mandatory
redeemable capital securities of subsidiary trusts
|
51,548
|
61,858
|
|||||
Total
liabilities
|
2,833,840
|
2,699,685
|
|||||
Minority-interest
in junior preferred stock of consolidated subsidiary
|
122
|
126
|
|||||
Commitments
and contingencies (Note 11)
|
|||||||
Stockholders’
equity:
|
|||||||
Preferred
stock, no par value
|
|||||||
Authorized
shares: 10,000,000; no shares outstanding as of 2007 and
2006
|
—
|
—
|
|||||
Common
stock, $0.01 par value; authorized shares 50,000,000;
issued
shares of 23,134,075 as of 2007 and 2006
|
231
|
231
|
|||||
Additional
paid-in capital
|
214,104
|
212,398
|
|||||
Retained
earnings
|
49,944
|
40,777
|
|||||
Treasury
stock at cost, common shares 1,111,663 as of 2007 and 1,232,052 as
of
2006
|
(20,164
|
)
|
(22,348
|
)
|
|||
Common
stock held for benefit plans
|
(3,636
|
)
|
(3,390
|
)
|
|||
Deferred
compensation obligation
|
3,636
|
3,390
|
|||||
Accumulated
other comprehensive loss
|
(7,213
|
)
|
(7,622
|
)
|
|||
Total
stockholders’ equity
|
236,902
|
223,436
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
3,070,864
|
$
|
2,923,247
|
Three
Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
(000’s,
except share data)
|
|||||||
INTEREST
INCOME:
|
|||||||
Interest
and fees on loans
|
$
|
29,198
|
$
|
27,931
|
|||
Interest
on federal funds sold
|
659
|
396
|
|||||
Interest
and dividends on securities:
|
|||||||
U.S.
government agencies
|
9,839
|
9,942
|
|||||
Mortgage-backed
securities
|
6,093
|
5,789
|
|||||
Obligations
of states and political subdivisions
|
1,086
|
1,037
|
|||||
Corporate
and other
|
38
|
41
|
|||||
Dividends
on Federal Home Loan Bank of New York stock
|
657
|
489
|
|||||
Total
interest income
|
47,570
|
45,625
|
|||||
INTEREST
EXPENSE:
|
|||||||
Interest
on deposits
|
15,502
|
12,816
|
|||||
Interest
on borrowings
|
8,406
|
8,223
|
|||||
Interest
on subordinated debt issued in connection with
corporation-obligated
mandatory redeemable
capital
securities of subsidiary trusts
|
1,195
|
1,436
|
|||||
Total
interest expense
|
25,103
|
22,475
|
|||||
NET
INTEREST INCOME
|
22,467
|
23,150
|
|||||
(Reversal
of) provision for credit losses
|
(11
|
)
|
37
|
||||
Net
interest income after (reversal of) provision for credit
losses
|
22,478
|
23,113
|
|||||
NON-INTEREST
INCOME:
|
|||||||
Service
charges and fees
|
794
|
826
|
|||||
Other
income
|
1,044
|
853
|
|||||
Gains
on securities transactions
|
4
|
426
|
|||||
Total
non-interest income
|
1,842
|
2,105
|
|||||
NON-INTEREST
EXPENSES:
|
|||||||
Salaries
and employee benefits
|
8,878
|
8,363
|
|||||
Occupancy
and equipment
|
1,991
|
1,995
|
|||||
Advertising
and business development
|
505
|
666
|
|||||
Professional
fees
|
391
|
379
|
|||||
Communications
|
338
|
337
|
|||||
Amortization
of intangibles
|
272
|
277
|
|||||
Stationery
and printing
|
143
|
136
|
|||||
FDIC
insurance
|
64
|
61
|
|||||
Acquisition
costs
|
2,337
|
―
|
|||||
Other
expense
|
841
|
891
|
|||||
Total
non-interest expenses
|
15,760
|
13,105
|
|||||
Income
before income taxes
|
8,560
|
12,113
|
|||||
Provision
for income taxes
|
2,758
|
3,968
|
|||||
NET
INCOME
|
$
|
5,802
|
$
|
8,145
|
|||
BASIC
EARNINGS PER COMMON SHARE
|
$
|
0.26
|
$
|
0.37
|
|||
DILUTED
EARNINGS PER COMMON SHARE
|
$
|
0.26
|
$
|
0.36
|
|||
WEIGHTED
AVERAGE COMMON SHARES
|
22,006,642
|
21,751,565
|
|||||
ADJUSTED
WEIGHTED AVERAGE COMMON SHARES
|
22,551,734
|
22,641,540
|
|||||
DIVIDENDS
PER COMMON SHARE
|
$
|
0.15
|
$
|
0.14
|
Nine
Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
(000’s,
except share data)
|
|||||||
INTEREST
INCOME:
|
|||||||
Interest
and fees on loans
|
$
|
88,109
|
$
|
80,886
|
|||
Interest
on federal funds sold
|
2,324
|
1,018
|
|||||
Interest
and dividends on securities:
|
|||||||
U.S.
government agencies
|
29,720
|
29,822
|
|||||
Mortgage-backed
securities
|
16,644
|
14,549
|
|||||
Obligations
of states and political subdivisions
|
3,472
|
3,251
|
|||||
Corporate
and other
|
128
|
131
|
|||||
Dividends
on Federal Home Loan Bank of New York stock
|
1,898
|
1,270
|
|||||
Total
interest income
|
142,295
|
130,927
|
|||||
INTEREST
EXPENSE:
|
|||||||
Interest
on deposits
|
46,898
|
34,182
|
|||||
Interest
on borrowings
|
24,420
|
23,223
|
|||||
Interest
on subordinated debt issued in connection with
corporation-obligated
mandatory redeemable
capital
securities of subsidiary trusts
|
4,283
|
4,145
|
|||||
Total
interest expense
|
75,601
|
61,550
|
|||||
NET
INTEREST INCOME
|
66,694
|
69,377
|
|||||
(Reversal
of) provision for credit losses
|
693
|
1,344
|
|||||
Net
interest income after (reversal of) provision for credit
losses
|
66,001
|
68,033
|
|||||
NON-INTEREST
INCOME:
|
|||||||
Service
charges and fees
|
2,437
|
2,489
|
|||||
Other
income
|
2,824
|
2,749
|
|||||
Gains
on securities transactions
|
6
|
431
|
|||||
Total
non-interest income
|
5,267
|
5,669
|
|||||
NON-INTEREST
EXPENSES:
|
|||||||
Salaries
and employee benefits
|
26,414
|
24,627
|
|||||
Occupancy
and equipment
|
6,093
|
5,885
|
|||||
Advertising
and business development
|
1,746
|
1,941
|
|||||
Professional
fees
|
1,312
|
1,153
|
|||||
Communications
|
1,030
|
980
|
|||||
Amortization
of intangibles
|
820
|
838
|
|||||
Stationery
and printing
|
467
|
432
|
|||||
FDIC
insurance
|
193
|
197
|
|||||
Acquisition
costs
|
2,337
|
―
|
|||||
Other
expense
|
2,919
|
2,810
|
|||||
Total
non-interest expenses
|
43,331
|
38,863
|
|||||
Income
before income taxes
|
27,937
|
34,839
|
|||||
Provision
for income taxes
|
8,880
|
11,354
|
|||||
NET
INCOME
|
$
|
19,057
|
$
|
23,485
|
|||
BASIC
EARNINGS PER COMMON SHARE
|
$
|
0.87
|
$
|
1.08
|
|||
DILUTED
EARNINGS PER COMMON SHARE
|
$
|
0.85
|
$
|
1.03
|
|||
WEIGHTED
AVERAGE COMMON SHARES
|
21,934,259
|
21,746,909
|
|||||
ADJUSTED
WEIGHTED AVERAGE COMMON SHARES
|
22,442,760
|
22,708,031
|
|||||
DIVIDENDS
PER COMMON SHARE
|
$
|
0.45
|
$
|
0.42
|
(000’s)
Nine
Months Ended
September
30,
|
|||||||
2007
|
2006
|
||||||
OPERATING
ACTIVITIES:
|
|||||||
Net
income
|
$
|
19,057
|
$
|
23,485
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Provision
for credit losses
|
693
|
1,344
|
|||||
Depreciation
and amortization
|
2,170
|
2,554
|
|||||
Amortization
of discounts on securities - net
|
(233
|
)
|
(181
|
)
|
|||
Deferred
income tax benefit, net
|
(754
|
)
|
(385
|
)
|
|||
Gains
on securities transactions
|
(6
|
)
|
(431
|
)
|
|||
Share-based
compensation
|
1,879
|
868
|
|||||
Income
tax benefits from share-based payment arrangements
|
(294
|
)
|
(841
|
)
|
|||
Benefit
plan liability
|
24
|
21
|
|||||
Decrease
in accrued interest receivable
|
2,801
|
428
|
|||||
(Decrease)
increase in accrued interest payable
|
(475
|
)
|
2,078
|
||||
Increase
(decrease) in accrued income tax payable
|
553
|
(385
|
)
|
||||
Other
- net
|
(676
|
)
|
1,836
|
||||
Net
cash provided by operating activities
|
24,739
|
30,391
|
|||||
INVESTING
ACTIVITIES:
|
|||||||
Proceeds
from sales of securities available for sale
|
3
|
47,413
|
|||||
Proceeds
from principal repayments, redemptions and maturities of:
|
|||||||
Securities
available for sale
|
41,634
|
40,486
|
|||||
Securities
held to maturity
|
56,914
|
18,978
|
|||||
Purchases
of securities available for sale
|
(105,925
|
)
|
(153,061
|
)
|
|||
Purchases
of securities held to maturity
|
(22,379
|
)
|
(9,653
|
)
|
|||
Net
purchases of Federal Home Loan Bank of New York stock
|
(350
|
)
|
(3,747
|
)
|
|||
Net
increase in interest bearing deposits in other banks
|
(23
|
)
|
(47
|
)
|
|||
Net
decrease (increase) in loans outstanding
|
29,056
|
(60,226
|
)
|
||||
Purchases
of premises and equipment
|
(1,155
|
)
|
(1,401
|
)
|
|||
Net
cash used for investing activities
|
(2,225
|
)
|
(121,258
|
)
|
|||
FINANCING
ACTIVITIES:
|
|||||||
Net
increase in non-interest bearing deposits, NOW, money market and
savings
accounts
|
216,476
|
118,400
|
|||||
Net
(decrease) increase in time deposits, net of withdrawals and
maturities
|
(76,953
|
)
|
24,435
|
||||
Net
increase (decrease) in securities sold under agreements to repurchase
-
short-term
|
6,706
|
(61,469
|
)
|
||||
Proceeds
from securities sold under agreements to repurchase -
long-term
|
100,000
|
210,000
|
|||||
Repayment
of securities sold under agreement to repurchase -
long-term
|
(119,500
|
)
|
(92,500
|
)
|
|||
Proceeds
from Federal Home Loan Bank of New York advances -
long-term
|
50,000
|
100,000
|
|||||
Repayment
of Federal Home Loan Bank of New York advances - long term
|
(25,015
|
)
|
(70,013
|
)
|
|||
Redemption
of junior preferred stock of consolidated subsidiary
|
(4
|
)
|
―
|
||||
Redemption
of corporation-obligated mandatory redeemable capital securities
of
subsidiary trusts
|
(10,310
|
)
|
―
|
||||
Cash
dividends paid
|
(9,890
|
)
|
(9,149
|
)
|
|||
Income
tax benefits from share-based payment arrangements
|
294
|
841
|
|||||
Proceeds
from exercise of common stock options
|
1,717
|
1,994
|
|||||
Purchases
of treasury stock
|
—
|
(3,916
|
)
|
||||
Net
cash provided by financing activities
|
133,521
|
218,623
|
|||||
Net
increase in Cash and Cash Equivalents
|
156,035
|
127,756
|
|||||
Cash
and Cash Equivalents, Beginning of Period
|
57,093
|
80,935
|
|||||
Cash
and Cash Equivalents, End of Period
|
$
|
213,128
|
$
|
208,691
|
|||
Supplemental
Disclosures:
|
|||||||
Interest
paid
|
$
|
(76,076
|
)
|
$
|
(59,472
|
)
|
|
Income
tax payments
|
$
|
(8,743
|
)
|
$
|
(11,449
|
)
|
|
Amortization
of loss on transfer of available for sale securities to held to maturity
securities
|
$
|
(507
|
)
|
$
|
(507
|
)
|
|
Change
in shares held in trust for deferred compensation
|
$
|
(246
|
)
|
$
|
(164
|
)
|
|
Change
in deferred compensation obligation
|
$
|
246
|
$
|
164
|
|||
Change
in accumulated other comprehensive loss (income)
|
$
|
409
|
$
|
(508
|
)
|
||
Non-cash
purchases of treasury stock related to the exercise of stock
options
|
$
|
—
|
$
|
(197
|
)
|
||
Issuance
of treasury stock related to the exercise of stock options
|
$
|
―
|
$
|
653
|
Common
Stock
Shares
Outstanding
|
|
Common
Stock
Par
Value
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Common
Stock
Held
for
Benefit
Plans
|
|
Deferred
Compensation
Obligation
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders’
Equity
|
||||||||||||
Balance
at January 1, 2007
|
21,902,023
|
$
|
231
|
$
|
212,398
|
$
|
40,777
|
$
|
(22,348
|
)
|
$
|
(3,390
|
)
|
$
|
3,390
|
$
|
(7,622
|
)
|
$
|
223,436
|
||||||||
Net
Income
|
19,057
|
19,057
|
||||||||||||||||||||||||||
Other
comprehensive income:
|
||||||||||||||||||||||||||||
Net
unrealized securities
gains
arising during the
period,
net of tax of $207
|
386
|
386
|
||||||||||||||||||||||||||
Reclassification
adjustment of
net
gain for securities sold,
net
of tax of $2
|
(4
|
)
|
(4
|
)
|
||||||||||||||||||||||||
Compensation
cost related to
The
Retirement Plan for
Non-Employee
Directors, net
of
tax benefit of $15
|
27
|
27
|
||||||||||||||||||||||||||
Other
comprehensive income
|
409
|
409
|
||||||||||||||||||||||||||
Total
comprehensive income
|
19,466
|
|||||||||||||||||||||||||||
Cash
dividends:
|
||||||||||||||||||||||||||||
Common
($0.45 per share)
|
(9,880
|
)
|
(9,880
|
)
|
||||||||||||||||||||||||
Junior
preferred stock
|
(10
|
)
|
(10
|
)
|
||||||||||||||||||||||||
Common
stock options exercised
and
related tax benefit
|
120,389
|
(173
|
)
|
2,184
|
2,011
|
|||||||||||||||||||||||
Compensation
cost related to
stock
options
|
1,879
|
1,879
|
||||||||||||||||||||||||||
Deferred
compensation
obligation
|
(246
|
)
|
246
|
―
|
||||||||||||||||||||||||
Balance
at September 30, 2007
|
22,022,412
|
$
|
231
|
$
|
214,104
|
$
|
49,944
|
$
|
(20,164
|
)
|
$
|
(3,636
|
)
|
$
|
3,636
|
$
|
(7,213
|
)
|
$
|
236,902
|
Common
Stock
Shares
Outstanding
|
|
Common
Stock
Par
Value
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Common
Stock
Held
for
Benefit
Plans
|
|
Deferred
Compensation
Obligation
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders’
Equity
|
||||||||||||
Balance
at January 1, 2006
|
21,713,805
|
$
|
231
|
$
|
211,686
|
$
|
21,654
|
$
|
(21,670
|
)
|
$
|
(2,927
|
)
|
$
|
2,927
|
$
|
(7,748
|
)
|
$
|
204,153
|
||||||||
Net
Income
|
23,485
|
23,485
|
||||||||||||||||||||||||||
Other
comprehensive loss:
|
||||||||||||||||||||||||||||
Net
unrealized securities
loss
arising during the period,
net
of tax benefit of $272
|
(505
|
)
|
(505
|
)
|
||||||||||||||||||||||||
Reclassification
adjustment of
net
gain for securities sold,
net
of tax of $2
|
(3
|
)
|
(3
|
)
|
||||||||||||||||||||||||
Other
comprehensive loss
|
(508
|
)
|
(508
|
)
|
||||||||||||||||||||||||
Total
comprehensive income
|
22,977
|
|||||||||||||||||||||||||||
Cash
dividends:
|
||||||||||||||||||||||||||||
Common
($0.42 per share)
|
(9,139
|
)
|
(9,139
|
)
|
||||||||||||||||||||||||
Junior
preferred stock
|
(10
|
)
|
(10
|
)
|
||||||||||||||||||||||||
Common
stock options exercised
and
related tax benefit
|
216,186
|
317
|
3,171
|
3,488
|
||||||||||||||||||||||||
Compensation
cost related to
stock
options
|
868
|
868
|
||||||||||||||||||||||||||
Purchases
of treasury stock
|
(188,822
|
)
|
(456
|
)
|
(4,113
|
)
|
(4,569
|
)
|
||||||||||||||||||||
Deferred
compensation
obligation
|
(164
|
)
|
164
|
―
|
||||||||||||||||||||||||
Balance
at September 30, 2006
|
21,741,169
|
$
|
231
|
$
|
212,415
|
$
|
35,990
|
$
|
(22,612
|
)
|
$
|
(3,091
|
)
|
$
|
3,091
|
$
|
(8,256
|
)
|
$
|
217,768
|
1. |
Principles
of Consolidation
|
2. |
Basis
of Presentation
|
3. |
Accounting
Pronouncements
|
4. |
Accounting
for Share-Based
Compensation
|
2007
|
||||||||||
Options
|
Weighted-Average
Exercise
Price
|
Aggregate
Intrinsic
Value
($
in 000’s)
|
||||||||
Vested
outstanding at January 1, 2007
|
583,884
|
$
|
14.74
|
|||||||
Unvested
outstanding at January 1, 2007
|
97,486
|
21.88
|
||||||||
Outstanding
at January 1, 2007
|
681,370
|
15.76
|
||||||||
Granted
|
100,162
|
20.59
|
||||||||
Exercised
|
(24,915
|
)
|
10.30
|
|||||||
Outstanding
at September 30, 2007
|
756,617
|
16.58
|
$
|
5,029
|
||||||
Exercisable
at September 30, 2007
|
656,455
|
$
|
15.97
|
$
|
4,765
|
|||||
Weighted
average fair value of options granted during the nine months ended
September 30, 2007
|
$
|
6.25
|
2006
|
||||||||||
Options
|
Weighted-Average
Exercise
Price
|
Aggregate
Intrinsic
Value
($
in 000’s)
|
||||||||
Vested
outstanding at January 1, 2006
|
558,082
|
$
|
13.09
|
|||||||
Unvested
outstanding at January 1, 2006
|
94,811
|
20.14
|
||||||||
Outstanding
at January 1, 2006
|
652,893
|
14.11
|
||||||||
Granted
|
97,486
|
21.88
|
||||||||
Exercised
|
(69,009
|
)
|
8.79
|
|||||||
Outstanding
at September 30, 2006
|
681,370
|
15.76
|
$
|
4,290
|
||||||
Exercisable
at September 30, 2006
|
583,884
|
$
|
14.74
|
$
|
4,273
|
|||||
Weighted
average fair value of options granted during the nine months ended
September 30, 2006
|
$
|
7.38
|
2007
|
||||||||||
Options
|
|
Weighted-Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
($
in 000’s)
|
||||||
Vested
outstanding at January 1, 2007
|
1,990,693
|
$
|
14.96
|
|||||||
Unvested
outstanding at January 1, 2007
|
596,539
|
23.16
|
||||||||
Outstanding
at January 1, 2007
|
2,587,232
|
16.85
|
||||||||
Granted
|
321,669
|
21.96
|
||||||||
Cancelled
|
(3,205
|
)
|
21.87
|
|||||||
Exercised
|
(95,474
|
)
|
15.29
|
|||||||
Outstanding
at September 30, 2007
|
2,810,222
|
17.48
|
$
|
16,524
|
||||||
Exercisable
at September 30, 2007
|
2,000,376
|
$
|
15.31
|
$
|
15,843
|
|||||
Weighted
average fair value of options granted
|
||||||||||
during
the nine months ended September 30, 2007
|
$
|
6.55
|
2006
|
||||||||||
Options
|
|
Weighted-Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
($
in 000’s)
|
||||||
Vested
outstanding at January 1, 2006
|
2,651,175
|
$
|
14.16
|
|||||||
Unvested
outstanding at January 1, 2006
|
1,560
|
22.26
|
||||||||
Outstanding
at January 1, 2006
|
2,652,735
|
14.16
|
||||||||
Granted
|
321,586
|
21.96
|
||||||||
Cancelled
|
(200
|
)
|
21.93
|
|||||||
Exercised
|
(147,177
|
)
|
10.77
|
|||||||
Expired
|
(69,858
|
)
|
22.34
|
|||||||
Outstanding
at September 30, 2006
|
2,757,086
|
15.04
|
$
|
19,345
|
||||||
Exercisable
at September 30, 2006
|
2,439,267
|
$
|
14.14
|
$
|
19,313
|
|||||
Weighted
average fair value of options granted
|
||||||||||
during
the nine months ended September 30, 2006
|
$
|
6.92
|
Three
months ended
|
Nine
months ended
|
||||||||||||
Director
Plan Assumptions:
|
September
30,
2007
|
September
30,
2006
|
September
30,
2007
|
September
30,
2006
|
|||||||||
Expected
stock price volatility
|
29.89
|
%
|
31.31
|
%
|
30.59
|
%
|
32.22
|
%
|
|||||
Risk-free
interest rate
|
4.85
|
5.07
|
4.96
|
4.56
|
|||||||||
Expected
dividend yield
|
2.85
|
2.43
|
2.64
|
2.51
|
|||||||||
Expected
annual forfeitures
|
1.99
|
1.70
|
1.85
|
1.70
|
|||||||||
Expected
life (in years)
|
7.92
|
7.81
|
7.87
|
7.75
|
|||||||||
Employee
Plan Assumptions:
|
|||||||||||||
Expected
stock price volatility
|
29.92
|
%
|
30.52
|
%
|
29.92
|
%
|
30.54
|
%
|
|||||
Risk-free
interest rate
|
4.78
|
5.03
|
4.78
|
5.03
|
|||||||||
Expected
dividend yield
|
2.58
|
2.43
|
2.58
|
2.43
|
|||||||||
Expected
annual forfeitures
|
1.31
|
1.29
|
1.31
|
1.29
|
|||||||||
Expected
life (in years)
|
7.42
|
6.86
|
7.42
|
6.87
|
5. |
Intangible
Assets
|
6. |
Earnings
Per Common Share
(“EPS”)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||||
Numerator:
|
|||||||||||||
Net
Income
|
$
|
5,802
|
$
|
8,145
|
$
|
19,057
|
$
|
23,485
|
|||||
Less:
preferred dividends
|
―
|
―
|
10
|
10
|
|||||||||
Net
income for basic and diluted
earnings
per common share - net income
available
to common stockholders
|
$
|
5,802
|
$
|
8,145
|
$
|
19,047
|
$
|
23,475
|
|||||
Denominator:
|
|||||||||||||
Denominator
for basic earnings per
common
share - weighted average shares
|
22,006,642
|
21,751,565
|
21,934,259
|
21,746,909
|
|||||||||
Effects
of dilutive securities -
director
and employee stock options
|
545,092
|
889,975
|
508,501
|
961,122
|
|||||||||
Denominator
for diluted earnings per
common
share - adjusted weighted
average
shares
|
22,551,734
|
22,641,540
|
22,442,760
|
22,708,031
|
|||||||||
Basic
earnings per common share
|
$
|
0.26
|
$
|
0.37
|
$
|
0.87
|
$
|
1.08
|
|||||
Diluted
earnings per common share
|
0.26
|
0.36
|
0.85
|
1.03
|
7. |
Securities
|
(000’s)
|
|||||||||||||
September
30, 2007
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
|||||||||
Available
for Sale:
|
|||||||||||||
U.S.
government agencies
|
$
|
72,931
|
$
|
―
|
$
|
948
|
$
|
71,983
|
|||||
Mortgage-backed
securities
|
426,337
|
2,060
|
4,954
|
423,443
|
|||||||||
Obligations
of states and political subdivisions
|
226
|
10
|
―
|
236
|
|||||||||
Corporate
securities
|
111
|
33
|
―
|
144
|
|||||||||
Total
securities available for sale
|
$
|
499,605
|
$
|
2,103
|
$
|
5,902
|
$
|
495,806
|
|||||
Held
to Maturity:
|
|||||||||||||
U.S.
government agencies
|
$
|
615,398
|
$
|
121
|
$
|
5,509
|
$
|
610,010
|
|||||
Obligations
of states and political subdivisions
|
97,613
|
1,694
|
284
|
99,023
|
|||||||||
Total
securities held to maturity
|
$
|
713,011
|
$
|
1,815
|
$
|
5,793
|
$
|
709,033
|
(000’s)
|
|||||||||||||
December
31, 2006
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair
Value
|
|||||||||
Available
for Sale:
|
|||||||||||||
U.S.
government agencies
|
$
|
72,927
|
$
|
—
|
$
|
1,027
|
$
|
71,900
|
|||||
Mortgage-backed
securities
|
361,904
|
2,027
|
4,932
|
358,999
|
|||||||||
Obligations
of states and political subdivisions
|
230
|
12
|
―
|
242
|
|||||||||
Corporate
securities
|
109
|
44
|
―
|
153
|
|||||||||
Total
securities available for sale
|
$
|
435,170
|
$
|
2,083
|
$
|
5,959
|
$
|
431,294
|
|||||
Held
to Maturity:
|
|||||||||||||
U.S.
government agencies
|
$
|
639,846
|
$
|
178
|
$
|
6,033
|
$
|
633,991
|
|||||
Obligations
of states and political subdivisions
|
112,102
|
1,800
|
386
|
113,516
|
|||||||||
Total
securities held to maturity
|
$
|
751,948
|
$
|
1,978
|
$
|
6,419
|
$
|
747,507
|
Available
for sale and held to maturity qualified obligations of states and
political subdivisions are not subject to Federal income tax.
|
A
summary of gross unrealized losses on securities that are not
other-than-temporarily impaired, which have been in a continuous
unrealized loss position for less than 12 months and for 12 months
or
longer as of September 30, 2007 and December 31, 2006, is as
follows:
|
(000’s)
|
|||||||||||||||||||
Less
Than 12 Months
|
12
Months or More
|
Total
|
|||||||||||||||||
September
30, 2007
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
|||||||||||||
U.S.
government agencies
|
$
|
169,484
|
$
|
67
|
$
|
381,513
|
$
|
6,390
|
$
|
550,997
|
$
|
6,457
|
|||||||
Mortgage-backed
securities
|
109,467
|
149
|
130,496
|
4,805
|
239,963
|
4,954
|
|||||||||||||
Obligations
of states and
political
subdivisions
|
28,509
|
75
|
9,792
|
209
|
38,301
|
284
|
|||||||||||||
Corporate
securities
|
1
|
—
|
—
|
—
|
1
|
—
|
|||||||||||||
Total
temporarily impaired
securities
|
$
|
307,461
|
$
|
291
|
$
|
521,801
|
$
|
11,404
|
$
|
829,262
|
$
|
11,695
|
(000’s)
|
|||||||||||||||||||
December
31, 2006
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
|||||||||||||
U.S.
government agencies
|
$
|
120,536
|
$
|
511
|
$
|
406,325
|
$
|
6,549
|
$
|
526,861
|
$
|
7,060
|
|||||||
Mortgage-backed
securities
|
6,550
|
22
|
145,583
|
4,910
|
152,133
|
4,932
|
|||||||||||||
Obligations
of states and
political
subdivisions
|
41,195
|
148
|
8,914
|
238
|
50,109
|
386
|
|||||||||||||
Total
temporarily impaired
securities
|
$
|
168,281
|
$
|
681
|
$
|
560,822
|
$
|
11,697
|
$
|
729,103
|
$
|
12,378
|
8.
|
Loans
|
9. |
Borrowings
and Stockholders’
Equity
|
(000’s
except percentages)
|
|||||||
Short-Term
Borrowings
|
2007
|
2006
|
|||||
Balance
at September 30
|
$
|
7,412
|
$
|
863
|
|||
Average
balance outstanding
|
$
|
2,685
|
$
|
46,901
|
|||
Weighted-average
interest rate:
|
|||||||
As
of September 30
|
3.97
|
%
|
3.88
|
%
|
|||
Paid
during period
|
3.95
|
%
|
4.72
|
%
|
(000’s
except percentages)
|
||||||||||||||||
Long-Term
Borrowings
|
Within
1
Year
|
After
1
But
Within
5
Years
|
After
5
Years
|
2007
Total
|
2006
Total
|
|||||||||||
Contractual
Payment Date:
|
||||||||||||||||
Total
long-term borrowing
|
$
|
50,021
|
$
|
120,096
|
$
|
542,677
|
$
|
712,794
|
$
|
707,309
|
||||||
Weighted
average interest rate
|
5.63
|
%
|
5.71
|
%
|
4.13
|
%
|
4.50
|
%
|
4.46
|
%
|
||||||
Expected
Call Date:
|
||||||||||||||||
Total
long-term borrowing
|
$
|
131,021
|
$
|
145,096
|
$
|
436,677
|
$
|
712,794
|
$
|
707,309
|
||||||
Weighted
average interest rate
|
4.01
|
%
|
5.30
|
%
|
4.38
|
%
|
4.50
|
%
|
4.46
|
%
|
10.
|
Corporation-Obligated
Mandatory Redeemable Capital Securities of Subsidiary
Trusts
|
11. |
Commitments
and Contingencies
|
12.
|
Segment
Information
|
13. |
Merger
Agreement with KeyCorp
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
(000’s)
|
||||||||||
September
30,
2007
|
December
31,
2006
|
Increase/
(Decrease)
|
||||||||
Time
and demand loans
|
$
|
135,372
|
$
|
140,416
|
$
|
(5,044
|
)
|
|||
Installment
loans
|
25,415
|
28,621
|
(3,206
|
)
|
||||||
Credit
Card
|
7,581
|
7,444
|
137
|
|||||||
Real
Estate
|
||||||||||
-
Commercial
|
556,543
|
572,622
|
(16,079
|
)
|
||||||
-
Residential
|
290,553
|
293,370
|
(2,817
|
)
|
||||||
-
Construction and real estate secured
|
461,260
|
465,463
|
(4,203
|
)
|
||||||
-
Home equity
|
83,316
|
82,452
|
864
|
|||||||
Other
|
4,413
|
5,280
|
(867
|
)
|
||||||
Gross
loans
|
1,564,453
|
1,595,668
|
(31,215
|
)
|
||||||
Deferred
net loan commitment fees
|
(1,262
|
)
|
(2,248
|
)
|
986
|
|||||
Total
loans
|
1,563,191
|
1,593,420
|
(30,229
|
)
|
||||||
Allowance
for loan losses
|
(15,622
|
)
|
(16,034
|
)
|
412
|
|||||
Total
loans, net
|
$
|
1,547,569
|
$
|
1,577,386
|
$
|
(29,817
|
)
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
September
30,
2007
|
|
(000’s)
December
31,
2006
|
|
Increase/
(Decrease)
|
||||||
Non-interest
bearing deposits:
|
||||||||||
Individuals,
partnerships, and corporations
|
$
|
258,678
|
$
|
269,468
|
$
|
(10,790
|
)
|
|||
Certified
and official checks
|
19,256
|
14,753
|
4,503
|
|||||||
States
and political subdivisions
|
98,890
|
10,661
|
88,229
|
|||||||
Total
non-interest bearing deposits
|
376,824
|
294,882
|
81,942
|
|||||||
Interest
bearing deposits:
|
||||||||||
NOW
accounts
|
98,683
|
110,386
|
(11,703
|
)
|
||||||
Money
market accounts
|
181,102
|
139,052
|
42,050
|
|||||||
Savings
deposits
|
371,185
|
370,034
|
1,151
|
|||||||
States
and political subdivisions - NOW, money market,
and
savings deposits
|
184,863
|
81,827
|
103,036
|
|||||||
Time
deposits of individuals, partnerships, corporations
under
$100,000
|
374,163
|
378,631
|
(4,468
|
)
|
||||||
Time
deposits of individuals, partnerships, corporations
over
$100,000
|
209,543
|
214,039
|
(4,496
|
)
|
||||||
Brokered
time deposits
|
―
|
54,000
|
(54,000
|
)
|
||||||
States
and political subdivisions - time deposits
|
143,799
|
161,660
|
(17,861
|
)
|
||||||
IRAs
and Keoghs
|
95,730
|
91,858
|
3,872
|
|||||||
Total
interest bearing deposits
|
1,659,068
|
1,601,487
|
57,581
|
|||||||
Total
deposits
|
$
|
2,035,892
|
$
|
1,896,369
|
$
|
139,523
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
(000’s,
except
percentages)
For
the three months ended September 30,
|
|||||||||||||||||||
2007
|
2006
|
||||||||||||||||||
Average
Balance |
Interest
|
Average
Yield/Rate
|
Average
Balance |
Interest
|
Average
Yield/Rate
|
||||||||||||||
INTEREST
EARNING ASSETS
|
|||||||||||||||||||
Interest
earning assets:
|
|||||||||||||||||||
Federal
funds sold
|
$
|
50,400
|
$
|
659
|
5.12
|
%
|
$
|
30,029
|
$
|
396
|
5.16
|
%
|
|||||||
Securities:
|
|||||||||||||||||||
U.S.
government agencies
|
703,969
|
9,839
|
5.59
|
712,931
|
9,943
|
5.58
|
|||||||||||||
Mortgage-backed
securities
|
434,083
|
6,093
|
5.61
|
410,217
|
5,780
|
5.64
|
|||||||||||||
Obligations
of states and political subdivisions
|
103,634
|
1,659
|
6.40
|
98,589
|
1,595
|
6.47
|
|||||||||||||
Corporate
securities, FHLB stock, and other securities
|
37,514
|
695
|
7.41
|
36,930
|
538
|
5.83
|
|||||||||||||
Loans,
net
|
1,577,360
|
29,213
|
7.33
|
1,493,654
|
27,976
|
7.47
|
|||||||||||||
Total
interest earning assets
|
2,906,960
|
48,158
|
6.52
|
%
|
2,782,350
|
46,228
|
6.61
|
%
|
|||||||||||
INTEREST
BEARING LIABILITIES
|
|||||||||||||||||||
Deposits:
|
|||||||||||||||||||
NOW
|
$
|
185,466
|
$
|
781
|
1.67
|
%
|
$
|
166,551
|
$
|
497
|
1.20
|
%
|
|||||||
Money
market
|
208,295
|
1,772
|
3.38
|
177,596
|
1,209
|
2.73
|
|||||||||||||
Savings
|
397,062
|
2,598
|
2.60
|
405,041
|
2,367
|
2.34
|
|||||||||||||
Time
|
855,257
|
10,351
|
4.79
|
799,036
|
8,743
|
4.33
|
|||||||||||||
Total
interest bearing deposits
|
1,646,080
|
15,502
|
3.70
|
1,548,224
|
12,816
|
3.27
|
|||||||||||||
Federal
funds purchased, securities sold under agreements to repurchase
and FHLB
advances
|
734,441
|
8,406
|
4.48
|
717,994
|
8,223
|
4.53
|
|||||||||||||
Subordinated
debt issued in connection with corporation - obligated
mandatory
redeemable capital securities of subsidiary trusts
|
51,548
|
1,195
|
9.27
|
61,858
|
1,436
|
9.29
|
|||||||||||||
Total
interest bearing liabilities
|
2,432,069
|
25,103
|
4.05
|
%
|
2,328,076
|
22,475
|
3.82
|
%
|
|||||||||||
NET
INTEREST INCOME
|
$
|
23,055
|
$
|
23,753
|
|||||||||||||||
NET
YIELD ON INTEREST EARNING ASSETS (NET INTEREST
MARGIN)
|
3.17
|
%
|
3.41
|
%
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
(000’s,
except percentages)
For
the nine months ended September 30,
|
|||||||||||||||||||
2007
|
2006
|
||||||||||||||||||
Average
Balance
|
Interest
|
Average
Yield/Rate
|
Average
Balance
|
Interest
|
Average
Yield/Rate
|
||||||||||||||
INTEREST
EARNING ASSETS
|
|||||||||||||||||||
Interest
earning assets:
|
|||||||||||||||||||
Federal
funds sold
|
$
|
59,299
|
$
|
2,324
|
5.17
|
%
|
$
|
27,472
|
$
|
1,018
|
4.89
|
%
|
|||||||
Securities:
|
|||||||||||||||||||
U.S.
government agencies
|
709,911
|
29,720
|
5.58
|
712,283
|
29,822
|
5.58
|
|||||||||||||
Mortgage-backed
securities
|
396,570
|
16,644
|
5.60
|
357,793
|
14,549
|
5.42
|
|||||||||||||
Obligations
of states
and
political subdivisions
|
109,809
|
5,267
|
6.40
|
104,147
|
5,001
|
6.40
|
|||||||||||||
Corporate
securities, FHLB
stock,
and other securities
|
37,024
|
2,026
|
4.10
|
35,454
|
1,401
|
5.28
|
|||||||||||||
Loans,
net
|
1,596,831
|
88,154
|
7.31
|
1,486,081
|
81,023
|
7.22
|
|||||||||||||
Total
interest earning assets
|
2,909,444
|
144,135
|
6.59
|
%
|
2,723,230
|
132,814
|
6.49
|
%
|
Deposits:
|
|||||||||||||||||||
NOW
|
$
|
194,182
|
$
|
2,670
|
1.84
|
%
|
$
|
184,803
|
$
|
1,790
|
1.29
|
%
|
|||||||
Money
market
|
189,218
|
4,630
|
3.27
|
156,816
|
2,598
|
2.22
|
|||||||||||||
Savings
|
399,299
|
7,710
|
2.58
|
420,733
|
6,668
|
2.12
|
|||||||||||||
Time
|
887,291
|
31,888
|
4.79
|
775,008
|
23,126
|
3.98
|
|||||||||||||
Total
interest bearing deposits
|
1,669,990
|
46,898
|
3.75
|
1,537,360
|
34,182
|
2.97
|
|||||||||||||
Federal
funds purchased,
securities
sold under
agreements
to repurchase
and
FHLB advances
|
718,884
|
24,420
|
4.48
|
685,705
|
23,223
|
4.47
|
|||||||||||||
Subordinated
debt issued in
connection
with
corporation
- obligated
mandatory
redeemable capital
securities
of subsidiary trusts
|
58,195
|
4,283
|
9.81
|
61,858
|
4,145
|
8.93
|
|||||||||||||
Total
interest bearing liabilities
|
2,447,069
|
75,601
|
4.10
|
%
|
2,284,923
|
61,550
|
3.58
|
%
|
|||||||||||
NET
INTEREST INCOME
|
$
|
68,534
|
$
|
71,264
|
|||||||||||||||
NET
YIELD ON INTEREST EARNING ASSETS (NET INTEREST
MARGIN)
|
3.14
|
%
|
3.49
|
%
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS
|
For
the three months ended
September
30, 2007 compared to 2006
|
For
the nine months ended
September
30, 2007 compared to 2006
|
||||||||||||||||||
Increase
(Decrease) due to change in
|
Increase
(Decrease) due to change in
|
||||||||||||||||||
Average
Volume
|
Average
Rate
|
Total
Increase
(Decrease)
|
Average
Volume
|
Average
Rate
|
Total
Increase
(Decrease)
|
||||||||||||||
INTEREST
INCOME:
|
|||||||||||||||||||
Federal
funds sold
|
$
|
284
|
$
|
(21
|
)
|
$
|
263
|
$
|
1,245
|
$
|
61
|
$
|
1,306
|
||||||
Securities
|
293
|
137
|
430
|
1,855
|
1,029
|
2,884
|
|||||||||||||
Loans,
net
|
4,061
|
(2,824
|
)
|
1,237
|
6,109
|
1,022
|
7,131
|
||||||||||||
Total
interest earning assets
|
4,638
|
(2,708
|
)
|
1,930
|
9,209
|
2,112
|
11,321
|
||||||||||||
INTEREST
EXPENSE:
|
|||||||||||||||||||
Interest
bearing deposits
|
872
|
1,814
|
2,686
|
3,144
|
9,572
|
12,716
|
|||||||||||||
Federal
funds purchased, securities
sold
under agreements to repurchase
and
FHLB advances
|
608
|
(425
|
)
|
183
|
1,144
|
53
|
1,197
|
||||||||||||
Subordinated
debt issued in connection
with
corporation - obligated
mandatory
redeemable capital
securities
of subsidiary trusts
|
(238
|
)
|
(3
|
)
|
(241
|
)
|
(357
|
)
|
495
|
138
|
|||||||||
Total
interest bearing liabilities
|
1,242
|
1,386
|
2,628
|
3,931
|
10,120
|
14,051
|
|||||||||||||
Decrease
in interest differential
|
$
|
3,396
|
$
|
(4,094
|
)
|
$
|
(698
|
)
|
$
|
5,278
|
$
|
(8,008
|
)
|
$
|
(2,730
|
)
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS
|
· |
Decrease
of $4,000 (0.2 percent) and an increase of $208,000 (3.5 percent)
in
occupancy and equipment expense. The increase for the nine month
period
primarily reflects higher utility cost expense and property taxes
from the
opening of branch locations and maintenance contracts on new
equipment
purchased.
|
· |
Decreases
of $161,000 (24.2 percent) and $195,000 (10.0 percent) in advertising
and
business development expense. The decreases primarily reflect
decreases in
sponsorship events and lower radio and television advertising
costs.
|
·
|
Increases
of $12,000 (3.2 percent) and $159,000 (13.8 percent) in professional
fees.
The increases were primarily due to higher legal fees related to
a
previous non-performing real estate construction loan held by the
Bank’s
wholly-owned subsidiary, Dutch Hill Realty Corp., as well as higher
audit
and legal fees for Securities and Exchange Commission
compliance.
|
·
|
Increase
of $2.3 million in acquisition costs for both periods. The increase
was
primarily due to investment banker and legal fees related to the
Company’s
pending merger with KeyCorp.
|
·
|
Decrease
of $50,000 (5.6 percent) and an increase of $109,000 (3.9 percent)
in
other expense. The decrease for the three month period is primarily
due to
reductions in travel and training expense and the charitable contribution
made by the Bank to the U.S.B. Foundation. The increase for the nine
month
period was primarily due to higher credit card related expenses and
outside printing costs and a lower level of deferred expenses related
to
loan originating, partially offset by lower expenses for courier
runs to
Bank locations.
|
ITEM 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Exhibit
No.
|
Exhibit
|
|
(2)
(a)
|
Amended
and Restated Agreement and Plan of Merger dated as of October 22,
2007
among KeyCorp, KYCA LLC, and U.S.B. Holding, Co., Inc. (incorporated
herein by reference to Exhibit 99.2 to the Registrant’s Form 8-K filed on
October 26, 2007).
|
|
(10)
(w)
|
Employment
Agreement dated as of July 25, 2007 among the Company, the Bank and
Thomas
E. Hales (incorporated herein by reference to Exhibit 10(w) to the
Registrant’s Form 8-K filed on July 30, 2007).
|
|
(10)
(x)
|
Employment
Agreement dated as of July 25, 2007 among the Company, the Bank and
Raymond J. Crotty (incorporated herein by reference to Exhibit 10(x)
to
the Registrant’s Form 8-K filed on July 30, 2007).
|
|
(10)
(y)
|
Letter
Agreement dated July 25, 2007 between the Company and Thomas Buonaiuto
(incorporated herein by reference to Exhibit 10(y) to the Registrant’s
Form 8-K filed on July 30, 2007).
|
|
(10)
(z)
|
U.S.B.
Holding Co., Inc. Amended and Restated Severance Plan (incorporated
herein
by reference to Exhibit 10(z) to the Registrant’s Form 8-K filed on July
30, 2007).
|
|
(31.1)
|
Certification
of Chief Executive Officer Pursuant to Exchange Act Rule
13a-14(a).*
|
|
(31.2)
|
Certification
of Chief Financial Officer Pursuant to Exchange Act Rule
13a-14(a).*
|
|
(32)
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to
18
U.S.C. Section 1350.*
|
*
Filed Herewith
|
/s/ Thomas E. Hales | /s/ Thomas M. Buonaiuto | ||
Thomas E. Hales |
Thomas M. Buonaiuto |
||
Chairman of the Board, | Executive Vice President, | ||
Chief Executive Officer, and Director |
Chief
Financial Officer, and
|
||
Assistant
Secretary
(Principal
Financial and
Accounting
Officer)
|
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