PORT CHESTER, NY--(MARKET WIRE)--Apr 28, 2008 -- USA Bank (OTC BB:USBK.OB - News) ( http://www.usa-bankers.com/) reported a net loss of $746 thousand ($0.13 per share) for the quarter ended March 31, 2008, which is a marked improvement compared to the net loss of $1.5 million ($0.26 per share) for the quarter ended March 31, 2007.

The Bank continues to leverage upon its capital base with quality loan growth, which is reflected in the $1.4 million increase in interest income in the first quarter of 2008 as compared to the first quarter of 2007, which has contributed to the increase in net interest income of $525 thousand for the same periods. Also benefiting the first quarter 2008 was the recognition of a gain on sale of securities of $146 thousand and a $344,000 reduction in salaries and employee benefits, primarily reflecting staff reductions since March 31, 2007. The first quarter 2008 reflects a larger provision for loan and lease loss expense of $225 thousand (as compared to $171 thousand for the quarter ended March 31, 2007), primarily caused by increased loan volume. There was also an unfavorable variance in FDIC insurance expense, which was $113 thousand for the first quarter of 2008 (as compared to $4 thousand for the quarter ended March 31, 2007), reflecting both increased deposit volume and insurance rates.

Total assets increased $26.3 million (16%) to $195.8 million at March 31, 2008 from $169.5 million at December 31, 2007, and an increase of $87.6 million, or 81%, since March 31, 2007. As of March 31, 2008, total deposits have increased to $149.5 million, an increase of $26.7 million, or 22%, since year end 2007, and an increase of $67.5 million, or 82%, since March 31, 2007. As of March 31, 2008, total gross loans have increased to $129.6 million, which represents an increase of $22.6 million, or 21%, since year end 2007, and an increase of $53.8 million, or 71%, since March 31, 2007. Capital ratios continue to be strong, with Tier One Capital to average assets of 13.21%, Tier One Capital to risk-weighted assets of 17.12%, and Total Capital to risk-weighted assets of 18.21%.

President & CEO Gentile stated that "although results are improving, we still have a long way to go. Legal and professional fees continue to be a drag on operations, with such costs aggregating $511 thousand during the recent quarter." He further noted, "I am hopeful that the Federal Reserve Board rate reductions will serve to further reduce our total cost of funds, which remains far too high at 4.64% (1st quarter 2008 average), although it is down from 4.77% and 4.83%, during the 4th quarter 2007 and 1st quarter 2007, respectively."

Mr. Gentile also indicated that asset quality remains manageable, with non-performing loans aggregating $3.7 million, which is only $100 thousand higher than at year end 2007. And, the four loans secured by real estate (referred to in the previous quarter press release) continue to reflect sufficient equity to protect against further losses. One of the secured loans ($2.6 million) is within about 60 days of becoming Other Real Estate Owned, as a result of a recent judgment in our favor.

Lastly, Mr. Gentile reported that he remains optimistic that net losses will be narrowing considerably over the successive quarters of 2008, due to the efforts of the Bank's Board of Directors, Senior Management and Staff.

"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-KSB for the year ended December 31, 2007 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.

Contact:
     Contact:
    Mr. Ron Gentile
    President & Chief Executive Officer
    USA Bank
    (914) 417-3205
     
    601 North Main Street
    Port Chester, New York 10573