Late-Breaking News
Rockland News at Time of Printing

USB Sold to Key Bank
With 31 branches, $3 billion in assets, $1.6 billion in loans and
$2 billion in deposits, deal will help Key’s expansion
By Adrian Burke

There was probably no one in Rockland County not familiar with Union State Bank, the long-time community bank based in Orangeburg that lent money to everyone from individuals looking to buy their first car or home to helping finance some of the largest development projects in the area.

Lead by Thomas Hales, Union State was not only a powerhouse for stockholders—returning tidy dividends each year—but also a community presence known for its deep pockets when it came to local charities.

When asked his opinion on the upcoming merger, Palisades Federal Credit Union’s CEO/President, Mark Welshoff said, “Key Bank is a solid company with a good reputation and I’m sure the merger was a smart move for both banks and their shareholders. Still, it’s kind of a bittersweet thing to say goodbye to Union State Bank. They gave an awful lot to the community and I hope that Key Bank will continue that tradition here in Rockland County.”

Many, then, were saddened to hear on July 27 the news that Key Bank had acquired Union State Bank parent of USB Holdings for $575 million in cash and stock. News of the deal sent shares of Union State surging 53% that day. Cleveland-based Key has agreed to pay shareholders about $24.95 a share— 0.455 shares of Key's common stock and $8.925 in cash. The price is a 63% premium to Union State's closing share price on Thursday.

The deal will help Key to continue its expansion in New York by acquiring USB’s 31 branches in the Westchester, Rockland and Orange counties, as New York City and in Fairfield, Conn. Key already has 32 branches in the Hudson Valley.

Union State has $3 billion in assets, $1.6 billion in loans and $2 billion in deposits.
“This is an important strategic acquisition that will significantly enhance our presence in attractive markets within and contiguous to our current operations," said Beth Mooney, the head of Key's community banking. “We believe our specialties in small business, middle-market banking, private banking and wealth management will be an excellent fit in these markets.”

“This transaction provides and opportunity for U.S.B. Holding Company Inc. share holders to receive an attractive valuue for their shares, and it brings Key’s high commitment to service and world-class products to our communities,” said Hales. “While we explored many alternatives, including remaining independent, we feel that our combination with Key is best for our clients and employees. Like Union State Bank, Key also has a long and established history of commitment to its communities.”

The deal is expected to be completed late in the fourth quarter of 2007 or early in the first quarter of 2008. RBD

How did USB help your business? We'd like to know. Please send us your
thoughts to be published in the next issue of Rockland Business DIgest.

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Editor’s Correction:
In our last issue we inadvertently mispelled the name and web contact info of one of our well-wishers.

The correct information is:
Jan Degenshein
ARCHITECT PLANNER PC
205 South Broadway / Nyack, NY 10960
tel: 845-358-8400 / fax: 845-358-8519
email: jan@degenshein.com