SOURCE: USA Bank

August 23, 2007 17:32 ET

USA Bank Does Not Offer Sub-Prime Loans

Bank's Assets Increase by 41% in Only 6 Months

PORT CHESTER, NY--(Marketwire - August 23, 2007) - Fred DeCaro, Jr., Chairman of the Board of USA Bank, announced today that USA Bank (OTCBB: USBK) has increased its asset base at June 30, 2007 to $149 million, an increase of $43 million, or 41%, over the $106 million reported at December 31, 2006. Mr. DeCaro, Jr. further stated that, "Loan quality continues to be exceptional, as evidenced by the fact that the Bank has only one classified loan, for $50,000, which is on a non-accrual basis, but is considered to be fully collectible." He further stated that, "The Bank does not, nor has it ever offered a sub-prime loan product for its portfolio."

Overall, total past due loans as a percentage of total loans is considered manageable at 1.7%, with nearly all of the delinquencies in the 30-89 day category.

The second quarter 2007 net operating loss was $481,000, or $(0.08) per share, a significant reduction from the Bank's first quarter net operating loss of $1,514,000, or $(0.27) per share. This improvement reflects the increase in gains on loan sales, the favorable impact on the provision for loan losses related to the upgrading of one loan and a reduction in operating expenses.

Gains on loan sales were $311,000 during the second quarter of 2007, an increase of $279,000 as compared to $32,000 during the first quarter of 2007. Operating expenses during the second quarter of 2007 were $1.8 million, reduced approximately $400 thousand from the $2.2 million incurred during the first quarter of 2007. A portion of this operating expense reduction was due to timing and a portion reflects a true reduction, primarily in staff costs, during the second quarter. As of this date, additional staff cuts and other operating cost reductions are in process.

Mr. Ron Gentile, the President and Chief Executive Officer, stated, "That with the continued growth of high quality loans, the Bank's net interest income should become a major factor in operating result improvements on a quarterly basis during the forthcoming quarters." Mr. Gentile further reported that, "As of today, the Bank has a pipeline of commercial real estate loans for portfolio of approximately $34 million and a pipeline of commercial and residential mortgage loans for sale of approximately $55 million, which is impressive in this challenging environment."

The Bank has also developed a draft of a new Strategic/Business Plan. It was developed in cooperation with the Bank's Board of Directors, senior operating management and FinPro, Inc., who is represented by Mr. Nicholas J. Ketcha, the former Head of the Division of Bank Supervision for the Federal Deposit Insurance Corporation in Washington, D.C.

This press release contains forward-looking statements which reflect our current views with respect to future events and financial performance. There may be factors, including those described in the Bank's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2007, that could cause actual results to differ materially from those indicated.

For more information regarding USA Bank visit our website at www.usa-bankers.com.

Contact Information

  • Contact:
    Fred DeCaro, Jr.
    Chairman of the Board
    (914) 417-3211

    USA Bank
    211 Irving Avenue
    Port Chester, NY 10573