USA Bank Reports Results for the Year Ended December 31, 2008

PORT CHESTER, NY, Apr 17, 2009 (MARKET WIRE via COMTEX) --
USBK | Quote | Chart | News | PowerRating -- USA Bank (OTCBB: USBK | Quote | Chart | News | PowerRating) reported a net loss of $2.7 million ($0.47
per share) for the year ended December 31, 2008, which is a marked
improvement compared to the net loss of $4.3 million ($0.75 per
share) for the year ended December 31, 2007. In November 2008, the
Bank incurred a one-time $554,000 expense related to the buy-out of
its lease at 800 Westchester Avenue in Rye Brook, NY, which will
result in a more than $30,000 monthly reduction in rent expense over
the then-remaining twenty-nine months of the lease term to commence
in February 2009. Nearly all of the staff has been 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.

The Bank's total assets reached $209.9 million at December 31, 2008,
an increase of $40.4 million (23.9%) from $169.5 million at December
31, 2007. As of December 31, 2008, total gross loans have increased
to $153.3 million, which represents an increase of $46.3 million
(43.2%) from $107.0 million at December 31, 2007. As of December 31,
2008, total deposits have increased to $169.8 million, an increase of
$47.0 million (38.2%), from $122.8 million at December 31, 2007.
Capital ratios continue to be strong, with Tier One Capital to
average assets of 9.65%, Tier One Capital to risk-weighted assets of
11.51%, and Total Capital to risk-weighted assets of 12.71%.

The Bank continues to leverage upon its capital base with quality
loan growth, which is reflected in the $1.7 million (41.5%) increase
in net interest income which was $5.8 million for the year ended
December 31, 2008 compared to $4.1 million for the year ended
December 31, 2007. Also benefiting the year 2008 was the recognition
of gains on the sales of securities of $401 thousand as compared to
no such gains being recognized in 2007 and a $700 thousand (7.9%)
reduction in non-interest expenses from $8.3 million in 2007 to $7.6
million in 2008, even including the one-time $554,000 expense related
to the buy-out of its lease in 2008. Partially offsetting the
favorable variances noted were increases in the provision for loan
losses and reductions in gains on sales of loans and fee income from
the brokering of loans. The provision for loan losses increased $515
thousand (52.3%) from $985 thousand to $1.5 million in 2008
reflecting increased loan volume and some deterioration in the loan
portfolio. Gains on sales of loans and fee income from the brokering
of loans decreased $452,000 and $124,000, respectively, reflecting
both a lessening in demand for residential mortgages and the Bank's
focus on more traditional commercial lending in 2008.

The $652 thousand (7.9%) reduction in non-interest expense primarily
reflects planned reductions in salaries and employee benefits and
advertising of $836 thousand (23.7%) and $213 thousand (58.6%),
respectively. Commissions were $388 thousand (58.2%) less than a year
earlier, which reflects a significant reduction in loans originated
for sale as the Bank focused on more traditional commercial banking.
Reductions in legal, contract services and professional fees of $143
thousand, $107 thousand and $77 thousand, respectively, also
contributed to the reduction in non-interest expenses. Increases in
occupancy, FDIC insurance and $108 thousand of expenses related on
one property taken by foreclosure in June 2008 partially offset the
favorable variance noted. Occupancy expense increased $128 thousand
(19.0%) from $675 thousand in 2007 to $803,000 in 2008 reflecting
increased rent and real estate taxes related to the new banking
office at 601 North Main Street, Port Chester, NY, as compared to
such expenses incurred at the former facility at 211 Irving Avenue,
Port Chester, NY as well as increased maintenance expense primarily
incurred at the administrative office facility at 800 Westchester
Avenue, Rye Brook, NY.

There was also a $280 thousand unfavorable variance in FDIC insurance
expense, which was $187 thousand in 2007 as compared to $467 thousand
in 2008, reflecting increases in both deposit volume and insurance
rates.

Ronald J. Gentile, President and Chief Executive Officer of the Bank,
stated that "results continue to show improvement." He further noted,
"I am pleased that our total average cost of funds is continuing to
decline to 4.24% for the year 2008 down from 4.80% for the year 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 "due to the poor economic climate,
asset quality is beginning to show signs of deterioration, with
non-performing loans aggregating $9.7 million at December 31, 2008, an
approximate $6.1 million increase from the $3.6 million in
nonperforming loans at year end 2007. The increase in non-performing
loans is a concern; however, the net realizable value of the
underlying collateral for these loans at the present time exceeds the
outstanding loan balances, except for one loan which required a
specific reserve of $141,540 as of December 31, 2008."

Mr. Gentile further commented that "the recessionary global economic
climate and current declining local real estate markets will make the
achievement of profitability in the near term a major challenge." He
also commented 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 serious loan
quality problems. 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."

"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-K for the year ended December 31,
2008, 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-bankers.com.

Ronald J. Gentile
President & CEO
914-417-3205

SOURCE: USA Bank

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