**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,**
**D.C.**
**20549**

**FORM**
**10-Q**

|   |   | (Mark One)                                                                                                                                                                                                                                                                                                                              |   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |                                                                                                                                                                                                                                                                                                                                    |   |
|   | :      | Quarterly                  report pursuant to Section 13 or 15(d) of the Securities Exchange                  Act of                  1934For                  the quarterly period ended September 30, 2005, or                                                                                                                        |   |
|   |   |                                                                                                                                                                                                                                                                                                                                    |   |
|   | 9      | Transition                  report pursuant to Section 13 or 15(d) of the Securities Exchange                  Act of                  1934For                  the transition period from ____________________ to                  _____________________                                                                               |   |
|   |   |                                                                                                                                                                                                                                                                                                                                    |   |
|   |   | Commission                file                Number                                    1-12811                       |   |

| **U.S.B.                  HOLDING CO.,                  INC.**                           |
|------------------------------------------------------------------------------------------|
| (Exact                  Name of Registrant as Specified in Its                  Charter) |

|   | **DELAWARE**                                                                                     |   | **36-3197969**                                                        |   |
|--------|--------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|
|   | (State                  or other jurisdiction of incorporation                  or organization) |   | (I.R.S.                  EmployerIdentification                  No.) |   |

|   | **100                  DUTCH HILL ROAD, ORANGEBURG, NEW YORK**        |   | **10962**                         |   |
|--------|-----------------------------------------------------------------------|--------|-----------------------------------|--------|
|   |   (Address                  of Principal Executive Offices) |   |  (Zip                  Code) |   |

| **845-365-4600**                                                                            |
|---------------------------------------------------------------------------------------------|
| (Registrant's                    Telephone Number (including area                    code)) |

| Indicate by check mark                whether the                registrant (1) has filed all reports required to be filed by Section                13 or                15(d) of the Securities Exchange Act of 1934 during the preceding                12                months (or for such shorter period that the registrant was required                to                file such reports), and (2) has been subject to such filing requirements                for the past 90 days. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | YES                     X                        NO                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
| Indicate                  by check mark whether the registrant is an accelerated filer (as                  defined                  in Rule 12b-2 of the Exchange Act).                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | YES                     X                       NO                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Indicate                by check mark whether the registrant is a shell company (as defined                in                Rule 12b-2 of the Exchange Act).                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | YES                                NO                     X       |

|   | **CLASS**                                                                          |   | **NUMBER                    OF SHARES** **OUTSTANDING                    AT NOVEMBER 2, 2005** |   |
|--------|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|
|   |                                                                               |   |                                                                                                |   |
|   |  Common                    stock, par value$0.01                    per share |   |  21,737,559                                                                                    |   |

----

**U.S.B.        HOLDING CO., INC.**

**TABLE        OF CONTENTS**

|                                             |   |                                                                                                                                                                            | **PAGE                  NO.** |
|--------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|
| **PART                I. FINANCIAL INFORMATION** |   |
|                                                  |   |                                                                                                                                                                            |                          |
| **ITEM                  1.**                     |   | FINANCIAL                STATEMENTS (UNAUDITED)                                                                                                                                 |                          |
|                                             |   |                                                                                                                                                                            |                          |
|                                             |   | CONDENSED                  CONSOLIDATED STATEMENTS OF CONDITION  AS OF SEPTEMBER 30,                  2005 AND                  DECEMBER 31, 2004.     | 1                             |
|                                             |   |                                                                                                                                                                            |                          |
|                                             |   | CONDENSED                  CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER                  30,                  2005 AND 2004.                          | 2                             |
|                                             |   |                                                                                                                                                                            |                          |
|                                             |   | CONDENSED                  CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER                  30,                  2005 AND 2004.                           | 3                             |
|                                             |   |                                                                                                                                                                            |                          |
|                                             |   | CONDENSED                  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED                  SEPTEMBER                  30, 2005 AND 2004.                  | 4                             |
|                                             |   |                                                                                                                                                                            |                          |
|                                             |   | CONDENSED                  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE NINE                  MONTHS ENDED SEPTEMBER 30, 2005 AND 2004.             | 5                             |
|                                             |   |                                                                                                                                                                            |                          |
|                                             |   | NOTES                TO CONDENSED CONSOLIDATED FINANCIAL                STATEMENTS.                                                     | 7                             |
|                                             |   |                                                                                                                                                                            |                          |
| **ITEM                2.**                       |   | MANAGEMENT'S                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS                  OF                  OPERATIONS.                                  | 20                            |
|                                             |   |                                                                                                                                                                            |                          |
| **ITEM                3.**                       |   | QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                                                                                                      | 32                            |
|                                             |   |                                                                                                                                                                            |                          |
| **ITEM                4.**                       |   | CONTROLS                AND PROCEDURES.                                                                                                                                         | 33                            |
|                                             |   |                                                                                                                                                                            |                          |
| **PART                II. OTHER INFORMATION**    |   |
|                                             |   |                                                                                                                                                                            |                          |
| **ITEM                2.**                  |   | UNREGISTERED                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.                                                                                                     | 34                            |
|                                             |   |                                                                                                                                                                            |                          |
| **ITEM                6.**                       |   | EXHIBITS                                                                                                                                                                        | 35                            |
|                                             |   |                                                                                                                                                                            |                               |
| SIGNATURES                                       |   | 39                                                                                                                                                                              |

----

|  **ITEM                    1.** | **PART                      I - FINANCIAL                      INFORMATION** |
|--------------------------------------|------------------------------------------------------------------------------|

|                                                                                                                                                                                     |   |                                                        |          |                                      |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|---------------|-------------------------------------------|--------|
| **U.S.B.                HOLDING CO., INC.**                                                                                                                                              |   |                                                        |          |                                      |   |
| **CONDENSED                CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)**                                                                                                            |   |                                                        |          |                                      |   |
|                                                                                                                                                                                          |   | **(000’s,                  except share data)**  |          |
| **ASSETS**                                                                                                                                                                               |   | **September                  30,****2005**                  |          | **December                  31,****2004** |   |
| Cash                  and due from banks                                                                                                                                                 |   | $                                                           | 121,850       |                                      | $      | 48,295 |   |
| Federal                  funds sold                                                                                                                                                      |   |                                                        | 190,500       |                                      |   | 17,000 |   |
| Cash                  and cash equivalents                                                                                                                                               |   |                                                        | **312,350**   |                                      |   | **65,295** |   |
| Interest                  bearing deposits in other banks                                                                                                                                |   |                                                        | 191           |                                      |   | 334 |   |
| Securities:                                                                                                                                                                              |   |                                                        |          |                                      |   |   |   |
|     Available                  for                  sale (at estimated fair value)                                                                                   |   |                                                        | 404,370       |                                      |   | 589,572 |   |
|     Held                  to maturity (estimated fair value of $722,351 in 2005 and $507,428                  in                  2004)                              |   |                                                        | 721,789       |                                      |   | 502,201 |   |
| Loans,                  net of allowance for loan losses of $15,163 in 2005 and $15,226                  in                  2004                                                        |   |                                                        | 1,454,540     |                                      |   | 1,492,872 |   |
| Premises                  and equipment, net                                                                                                                                             |   |                                                        | 14,126        |                                      |   | 15,616 |   |
| Accrued                  interest receivable                                                                                                                                             |   |                                                        | 15,554        |                                      |   | 17,312 |   |
| Federal                  Home Loan Bank of New York stock                                                                                                                                |   |                                                        | 29,342        |                                      |   | 31,135 |   |
| Intangible                  assets, net                                                                                                                                                  |   |                                                        | 4,153         |                                      |   | 5,087 |   |
| Goodwill                                                                                                                                                                                 |   |                                                        | 1,380         |                                      |   | 1,380 |   |
| Other                  assets                                                                                                                                                            |   |                                                        | 26,052        |                                      |   | 25,466 |   |
| **TOTAL                  ASSETS**                                                                                                                                                        |   | **$**                                                       | **2,983,847** |                                      | **$**  | **2,746,270** |   |
| **LIABILITIES                  AND STOCKHOLDERS’ EQUITY**                                                                                                                          |   |                                                        |          |                                      |   |   |   |
| **Liabilities:**                                                                                                                                                                         |   |                                                        |          |                                      |   |   |   |
| Non-interest                  bearing deposits                                                                                                                                           |   | $                                                           | 442,211       |                                      | $      | 317,874 |   |
| Interest                  bearing deposits:                                                                                                                                              |   |                                                        |          |                                      |   |   |   |
|     NOW                  accounts                                                                                                                                    |   |                                                        | 280,579       |                                      |   | 165,809 |   |
|     Money                  market accounts                                                                                                                           |   |                                                        | 145,975       |                                      |   | 200,647 |   |
|     Savings                  deposits                                                                                                                                |   |                                                        | 454,767       |                                      |   | 420,171 |   |
|     Time                  deposits                                                                                                                                   |   |                                                        | 753,303       |                                      |   | 753,717 |   |
| **Total                  deposits**                                                                                                                                                      |   |                                                        | **2,076,835** |                                      |   | **1,858,218** |   |
| Accrued                  interest payable                                                                                                                                                |   |                                                        | 7,119         |                                      |   | 6,782 |   |
| Accrued                  expenses and other liabilities                                                                                                                                  |   |                                                        | 18,097        |                                      |   | 12,206 |   |
| Securities                  transactions not yet settled                                                                                                                                 |   |                                                        | 27,531        |                                      |   | ― |   |
| Securities                  sold under agreements to repurchase                                                                                                                          |   |                                                        | 520,423       |                                      |   | 542,323 |   |
| Federal                  Home Loan Bank of New York advances                                                                                                                             |   |                                                        | 71,832        |                                      |   | 82,709 |   |
| Subordinated                  debt issued in connection with Corporation-Obligated     mandatory                  redeemable capital securities of subsidiary trusts |   |                                                        | 61,858        |                                      |   | 61,858 |   |
| **Total                  liabilities**                                                                                                                                                   |   |                                                        | **2,783,695** |                                      |   | **2,564,096** |   |
| Minority-interest                  in junior preferred stock of consolidated subsidiary                                                                                                  |   |                                                        | 128           |                                      |   | 128 |   |
| Commitments                  and contingencies (Note 13)                                                                                                                                 |   |                                                        |          |                                      |   |   |   |
| **Stockholders’                  equity:**                                                                                                                                         |   |                                                        |          |                                      |   |   |   |
| Preferred                  stock, no par value                                                                                                                                           |   |                                                        | ―       |                                      |   | ― |   |
| Authorized                  shares: 10,000,000; no shares outstanding in 2005 and 2004                                                                                                   |   |                                                        |          |                                      |   |   |   |
| Common                  stock, $0.01 par value; authorized shares 50,000,000;    issued                  shares of 23,120,733 in 2005 and 22,004,701 in 2004         |   |                                                        | 231           |                                      |   | 220 |   |
| Additional                  paid-in capital                                                                                                                                              |   |                                                        | 211,353       |                                      |   | 184,166 |   |
| Retained                  earnings                                                                                                                                                       |   |                                                        | 15,938        |                                      |   | 26,336 |   |
| Treasury                  stock at cost, common shares 1,388,174 in 2005 and 1,657,887 in                  2004                                                                          |   |                                                        | (20,639       | )                                         |   | (22,855 | ) |
| Common                  stock held for benefit plans                                                                                                                                     |   |                                                        | (2,959        | )                                         |   | (2,780 | ) |
| Deferred                  compensation obligation                                                                                                                                        |   |                                                        | 2,959         |                                      |   | 2,746 |   |
| Accumulated                  other comprehensive loss                                                                                                                                    |   |                                                        | (6,859        | )                                         |   | (5,787 | ) |
| **Total                  stockholders’ equity**                                                                                                                                    |   |                                                        | **200,024**   |                                      |   | **182,046** |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                                                    |   | **$**                                                       | **2,983,847** |                                      | **$**  | **2,746,270** |   |

*See        notes to condensed consolidated financial statements.*

----

| **U.S.B.                    HOLDING CO., INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME                    (UNAUDITED)** |
|---------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                      |
|                                                                                                                      |

|                                                                                                                                                                                                                         |   | **(000’s,                    except share data)****Three                    Months Ended****September                    30,** |           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|----------------|
|                                                                                                                                                                                                                         |   | **2005**                                                                                                                             |           | **2004** |   |
| **INTEREST                    INCOME:**                                                                                                                                                                                      |   |                                                                                                                                 |           |   |   |
| Interest                    and fees on loans                                                                                                                                                                                |   | $                                                                                                                                    | 25,124         |   | $ | 22,334 |   |
| Interest                    on federal funds sold                                                                                                                                                                            |   |                                                                                                                                 | 724            |   |   | 89 |   |
| Interest                    and dividends on securities:                                                                                                                                                                     |   |                                                                                                                                 |           |   |   |   |   |
| U.S.                    government agencies                                                                                                                                                                                  |   |                                                                                                                                 | 9,300          |   |   | 9,632 |   |
| Mortgage-backed                    securities                                                                                                                                                                                |   |                                                                                                                                 | 3,912          |   |   | 3,579 |   |
| Obligations                    of states and political subdivisions                                                                                                                                                          |   |                                                                                                                                 | 1,049          |   |   | 872 |   |
| Corporate                    and other                                                                                                                                                                                       |   |                                                                                                                                 | 41             |   |   | 31 |   |
| Interest                    bearing deposits in other banks                                                                                                                                                                  |   |                                                                                                                                 | 1              |   |   | ― |   |
| Dividends                    on Federal Home Loan Bank of New York stock                                                                                                                                                     |   |                                                                                                                                 | 395            |   |   | 213 |   |
| **Total                    interest income**                                                                                                                                                                                 |   |                                                                                                                                 | **40,546**     |   |   | **36,750** |   |
| **INTEREST                    EXPENSE:**                                                                                                                                                                                     |   |                                                                                                                                 |           |   |   |   |   |
| Interest                    on deposits                                                                                                                                                                                      |   |                                                                                                                                 | 8,863          |   |   | 5,928 |   |
| Interest                    on borrowings                                                                                                                                                                                    |   |                                                                                                                                 | 6,662          |   |   | 7,301 |   |
| Interest                    on subordinated debt issued in connection with Corporation -                    Obligated    mandatory                    redeemable capital securities of subsidiary trusts |   |                                                                                                                                 | 1,236          |   |   | 1,029 |   |
| **Total                    interest expense**                                                                                                                                                                                |   |                                                                                                                                 | **16,761**     |   |   | **14,258** |   |
|                                                                                                                                                                                                                         |   |                                                                                                                                 |           |   |   |   |   |
| **NET                    INTEREST INCOME**                                                                                                                                                                                   |   |                                                                                                                                 | **23,785**     |   |   | **22,492** |   |
| Provision                    for credit losses                                                                                                                                                                               |   |                                                                                                                                 | 95             |   |   | 110 |   |
| **Net                    interest income after provision for credit losses**                                                                                                                                                 |   |                                                                                                                                 | **23,690**     |   |   | **22,382** |   |
|                                                                                                                                                                                                                         |   |                                                                                                                                 |           |   |   |   |   |
| **NON-INTEREST                    INCOME:**                                                                                                                                                                                  |   |                                                                                                                                 |           |   |   |   |   |
| Service                    charges and fees                                                                                                                                                                                  |   |                                                                                                                                 | 918            |   |   | 1,038 |   |
| Other                    income                                                                                                                                                                                              |   |                                                                                                                                 | 931            |   |   | 970 |   |
| Gains                    on sales of loans                                                                                                                                                                                   |   |                                                                                                                                 | 314            |   |   | ― |   |
| **Total                    non-interest income**                                                                                                                                                                             |   |                                                                                                                                 | **2,163**      |   |   | **2,008** |   |
|                                                                                                                                                                                                                         |   |                                                                                                                                 |           |   |   |   |   |
| **NON-INTEREST                    EXPENSES:**                                                                                                                                                                                |   |                                                                                                                                 |           |   |   |   |   |
| Salaries                    and employee benefits                                                                                                                                                                            |   |                                                                                                                                 | 8,277          |   |   | 7,554 |   |
| Occupancy                    and equipment                                                                                                                                                                                   |   |                                                                                                                                 | 1,921          |   |   | 2,049 |   |
| Advertising                    and business development                                                                                                                                                                      |   |                                                                                                                                 | 804            |   |   | 620 |   |
| Professional                    fees                                                                                                                                                                                         |   |                                                                                                                                 | 588            |   |   | 875 |   |
| Communications                                                                                                                                                                                                               |   |                                                                                                                                 | 302            |   |   | 424 |   |
| Stationery                    and printing                                                                                                                                                                                   |   |                                                                                                                                 | 110            |   |   | 148 |   |
| FDIC                    insurance                                                                                                                                                                                            |   |                                                                                                                                 | 63             |   |   | 70 |   |
| Amortization                    of intangibles                                                                                                                                                                               |   |                                                                                                                                 | 285            |   |   | 290 |   |
| Other                    expense                                                                                                                                                                                             |   |                                                                                                                                 | 1,040          |   |   | 1,005 |   |
| **Total                    non-interest expenses**                                                                                                                                                                           |   |                                                                                                                                 | **13,390**     |   |   | **13,035** |   |
| Income                    before income taxes                                                                                                                                                                                |   |                                                                                                                                 | 12,463         |   |   | 11,355 |   |
| Provision                    for income taxes                                                                                                                                                                                |   |                                                                                                                                 | 4,032          |   |   | 3,836 |   |
| **NET                    INCOME**                                                                                                                                                                                            |   | **$**                                                                                                                                | **8,431**      |   | **$** | **7,519** |   |
| **BASIC                    EARNINGS PER COMMON SHARE**                                                                                                                                                                       |   | **$**                                                                                                                                | **0.39**       |   | **$** | **0.35** |   |
| **DILUTED                    EARNINGS PER COMMON SHARE**                                                                                                                                                                     |   | **$**                                                                                                                                | **0.37**       |   | **$** | **0.34** |   |
| **WEIGHTED                    AVERAGE COMMON SHARES**                                                                                                                                                                        |   |                                                                                                                                 | **21,685,896** |   |   | **21,340,626** |   |
| **ADJUSTED                    WEIGHTED AVERAGE COMMON SHARES**                                                                                                                                                               |   |                                                                                                                                 | **22,605,328** |   |   | **22,278,580** |   |
| **DIVIDENDS                    PER COMMON SHARE**                                                                                                                                                                            |   | **$**                                                                                                                                | **0.14**       |   | **$** | **0.12** |   |

*See          notes to condensed consolidated financial statements.*

----

| **U.S.B.                        HOLDING CO., INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME                        (UNAUDITED)** |
|-----------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                   |   |                                                                                                                          |           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------|----------------|
|                                                                                                                                                                                                                   |   |                                                                                                                          |           |
|                                                                                                                                                                                                                   |   | **(000’s,                  except share data)****Nine                  Months Ended****September                  30,** |           |
|                                                                                                                                                                                                                   |   | **2005**                                                                                                                      |           | **2004** |   |
| **INTEREST                  INCOME:**                                                                                                                                                                                  |   |                                                                                                                          |           |   |   |
| Interest                  and fees on loans                                                                                                                                                                            |   | $                                                                                                                             | 73,745         |   | $ | 65,982 |   |
| Interest                  on federal funds sold                                                                                                                                                                        |   |                                                                                                                          | 1,252          |   |   | 237 |   |
| Interest                  and dividends on securities:                                                                                                                                                                 |   |                                                                                                                          |           |   |   |   |   |
| U.S.                  government agencies                                                                                                                                                                              |   |                                                                                                                          | 25,666         |   |   | 27,999 |   |
| Mortgage-backed                  securities                                                                                                                                                                            |   |                                                                                                                          | 12,440         |   |   | 9,609 |   |
| Obligations                  of states and political subdivisions                                                                                                                                                      |   |                                                                                                                          | 2,978          |   |   | 2,643 |   |
|     Corporate                  and                  other                                                                                                                                          |   |                                                                                                                          | 116            |   |   | 91 |   |
| Interest                  on deposits in other banks                                                                                                                                                                   |   |                                                                                                                          | 4              |   |   | ― |   |
| Dividends                  on Federal Home Loan Bank of New York stock                                                                                                                                                 |   |                                                                                                                          | 1,058          |   |   | 465 |   |
| **Total                  interest income**                                                                                                                                                                             |   |                                                                                                                          | **117,259**    |   |   | **107,026** |   |
| **INTEREST                  EXPENSE:**                                                                                                                                                                                 |   |                                                                                                                          |           |   |   |   |   |
| Interest                  on deposits                                                                                                                                                                                  |   |                                                                                                                          | 23,027         |   |   | 17,904 |   |
| Interest                  on borrowings                                                                                                                                                                                |   |                                                                                                                          | 20,004         |   |   | 21,604 |   |
| Interest                  on subordinated debt issued in connection with Corporation -                  Obligated    mandatory                  redeemable capital securities of subsidiary trusts |   |                                                                                                                          | 3,540          |   |   | 2,892 |   |
| **Total                  interest expense**                                                                                                                                                                            |   |                                                                                                                          | **46,571**     |   |   | **42,400** |   |
|                                                                                                                                                                                                                   |   |                                                                                                                          |           |   |   |   |   |
| **NET                  INTEREST INCOME**                                                                                                                                                                               |   |                                                                                                                          | **70,688**     |   |   | **64,626** |   |
| Provision                  for credit losses                                                                                                                                                                           |   |                                                                                                                          | 571            |   |   | 664 |   |
| **Net                  interest income after provision for credit losses**                                                                                                                                             |   |                                                                                                                          | **70,117**     |   |   | **63,962** |   |
|                                                                                                                                                                                                                   |   |                                                                                                                          |           |   |   |   |   |
| **NON-INTEREST                  INCOME:**                                                                                                                                                                              |   |                                                                                                                          |           |   |   |   |   |
| Service                  charges and fees                                                                                                                                                                              |   |                                                                                                                          | 2,749          |   |   | 3,206 |   |
| Other                  income                                                                                                                                                                                          |   |                                                                                                                          | 2,806          |   |   | 2,645 |   |
| Gains                  on securities transactions                                                                                                                                                                      |   |                                                                                                                          | ―        |   |   | 1,197 |   |
| Gains                  on sales of loans                                                                                                                                                                               |   |                                                                                                                          | 314            |   |   | ― |   |
| **Total                  non-interest income**                                                                                                                                                                         |   |                                                                                                                          | **5,869**      |   |   | **7,048** |   |
|                                                                                                                                                                                                                   |   |                                                                                                                          |           |   |   |   |   |
| **NON-INTEREST                  EXPENSES:**                                                                                                                                                                            |   |                                                                                                                          |           |   |   |   |   |
| Salaries                  and employee benefits                                                                                                                                                                        |   |                                                                                                                          | 24,866         |   |   | 22,571 |   |
| Occupancy                  and equipment                                                                                                                                                                               |   |                                                                                                                          | 5,783          |   |   | 5,863 |   |
| Advertising                  and business development                                                                                                                                                                  |   |                                                                                                                          | 1,974          |   |   | 2,099 |   |
| Professional                  fees                                                                                                                                                                                     |   |                                                                                                                          | 1,726          |   |   | 1,739 |   |
| Communications                                                                                                                                                                                                         |   |                                                                                                                          | 970            |   |   | 1,104 |   |
| Stationery                  and printing                                                                                                                                                                               |   |                                                                                                                          | 423            |   |   | 532 |   |
| FDIC                  insurance                                                                                                                                                                                        |   |                                                                                                                          | 209            |   |   | 220 |   |
| Amortization                  of intangibles                                                                                                                                                                           |   |                                                                                                                          | 861            |   |   | 835 |   |
| Other                  expense                                                                                                                                                                                         |   |                                                                                                                          | 2,910          |   |   | 2,900 |   |
| **Total                  non-interest expenses**                                                                                                                                                                       |   |                                                                                                                          | **39,722**     |   |   | **37,863** |   |
| Income                  before income taxes                                                                                                                                                                            |   |                                                                                                                          | 36,264         |   |   | 33,147 |   |
| Provision                  for income taxes                                                                                                                                                                            |   |                                                                                                                          | 11,633         |   |   | 11,234 |   |
| **NET                  INCOME**                                                                                                                                                                                        |   | **$**                                                                                                                         | **24,631**     |   | **$** | **21,913** |   |
| **BASIC                  EARNINGS PER COMMON SHARE**                                                                                                                                                                   |   | **$**                                                                                                                         | **1.14**       |   | **$** | **1.02** |   |
| **DILUTED                  EARNINGS PER COMMON SHARE**                                                                                                                                                                 |   | **$**                                                                                                                         | **1.10**       |   | **$** | **0.98** |   |
| **WEIGHTED                  AVERAGE COMMON SHARES**                                                                                                                                                                    |   |                                                                                                                          | **21,567,925** |   |   | **21,427,984** |   |
| **ADJUSTED                  WEIGHTED AVERAGE COMMON SHARES**                                                                                                                                                           |   |                                                                                                                          | **22,466,223** |   |   | **22,373,511** |   |
| **DIVIDENDS                  PER COMMON SHARE**                                                                                                                                                                        |   | **$**                                                                                                                         | **0.40**       |   | **$** | **0.32** |   |

*See        notes to condensed consolidated financial statements.*

----

| **                              U.S.B.                        HOLDING CO., INC.       CONDENSED                        CONSOLIDATED STATEMENTS OF CASH                        FLOWS (UNAUDITED)** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                               |   | **(000’s)****Nine                  Months Ended****September                  30,** |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|-------------|
|                                                                                                                                                                                                                                                                               |   | **2005**                                                                                  |        | **2004** |   |
| **OPERATING                  ACTIVITIES:**                                                                                                                                                                                                                                         |   |                                                                                      |        |
| Net                  income                                                                                                                                                                                                                                                        |   | $                                                                                         | 24,631      |   | $ | 21,913 |   |
| Adjustments                  to reconcile net income to net cash provided by operating                  activities:                                                                                                                                                                |   |                                                                                      |        |   |   |   |   |
|                          Provision for credit losses                                                                                                                                                                                            |   |                                                                                      | 571         |   |   | 664 |   |
|     Depreciation                  and amortization                                                                                                                                                                                                             |   |                                                                                      | 2,600       |   |   | 2,567 |   |
|     Amortization                  of                  discounts on securities - net                                                                                                                                                                            |   |                                                                                      | (337        | ) |   | (519 | ) |
|     Deferred                  income                  tax benefit, net                                                                                                                                                                                         |   |                                                                                      | (2,474      | ) |   | (2,581 | ) |
|     Gains                  on securities transactions                                                                                                                                                                                                          |   |                                                                                      | ―     |   |   | (1,197 | ) |
|     Gains                  on loans sales                                                                                                                                                                                                                      |   |                                                                                      | (314        | ) |   | ― |   |
| Non-cash                  benefit plan expense                                                                                                                                                                                                                                     |   |                                                                                      | 133         |   |   | 377 |   |
| Decrease                  in accrued interest receivable                                                                                                                                                                                                                           |   |                                                                                      | 1,819       |   |   | 2,483 |   |
| Increase                  (decrease) in accrued interest payable                                                                                                                                                                                                                   |   |                                                                                      | 337         |   |   | (721 | ) |
| Other                  - net                                                                                                                                                                                                                                                       |   |                                                                                      | 9,296       |   |   | 2,754 |   |
| **Net                  cash provided by operating activities**                                                                                                                                                                                                                     |   |                                                                                      | **36,262**  |   |   | **25,740** |   |
| **INVESTING                  ACTIVITIES:**                                                                                                                                                                                                                                         |   |                                                                                      |        |   |   |   |   |
| Proceeds                  from sales of securities available for sale                                                                                                                                                                                                              |   |                                                                                      | ―     |   |   | 105,418 |   |
| Proceeds                  from principal paydowns, redemptions and maturities of:                                                                                                                                                                                                  |   |                                                                                      |        |   |   |   |   |
|     Securities                  available for sale                                                                                                                                                                                                             |   |                                                                                      | 224,121     |   |   | 505,846 |   |
|     Securities                  held                  to maturity                                                                                                                                                                                              |   |                                                                                      | 134,225     |   |   | 84,533 |   |
| Purchases                  of securities available for sale                                                                                                                                                                                                                        |   |                                                                                      | (14,750     | ) |   | (726,635 | ) |
| Purchases                  of securities held to maturity                                                                                                                                                                                                                          |   |                                                                                      | (351,825    | ) |   | (52,598 | ) |
| Net                  redemptions (purchases) of Federal Home Loan Bank of New York                  stock                                                                                                                                                                          |   |                                                                                      | 1,793       |   |   | (16,163 | ) |
| Net                  liabilities assumed in Reliance Bank acquisition                                                                                                                                                                                                              |   |                                                                                      | ―     |   |   | 10,697 |   |
| Net                  decrease (increase) in interest bearing deposits in other                  banks                                                                                                                                                                              |   |                                                                                      | 143         |   |   | (299 | ) |
| Proceeds                  from sales of loans                                                                                                                                                                                                                                      |   |                                                                                      | 7,505       |   |   | ― |   |
| Net                  decrease (increase) in loans outstanding, excluding sale of                  loans                                                                                                                                                                            |   |                                                                                      | 31,144      |   |   | (28,319 | ) |
| Purchases                  of premises and equipment - net                                                                                                                                                                                                                         |   |                                                                                      | (249        | ) |   | (2,237 | ) |
| **Net                  cash provided by (used for) investing activities**                                                                                                                                                                                                          |   |                                                                                      | **32,107**  |   |   | **(119,757** | **)** |
| **FINANCING                  ACTIVITIES:**                                                                                                                                                                                                                                         |   |                                                                                      |        |   |   |   |   |
|                          Net increase in non-interest bearing deposits, NOW, money market                  and                  savings accounts                                                                                                |   |                                                                                      | 219,031     |   |   | 199,370 |   |
| Net                  decrease in time deposits, net of withdrawals and                  maturities                                                                                                                                                                                 |   |                                                                                      | (414        | ) |   | (1,895 | ) |
| Net                  decrease in securities sold under agreements to repurchase -                  short-term                                                                                                                                                                      |   |                                                                                      | (21,900     | ) |   | (15,981 | ) |
| Repayment                  of Federal Home Loan Bank of New York advances -                  short-term                                                                                                                                                                            |   |                                                                                      | ―     |   |   | (10,500 | ) |
| Proceeds                  from securities sold under agreements to repurchase -                  long-term                                                                                                                                                                         |   |                                                                                      | ―     |   |   | 75,000 |   |
| Repayment                  of securities sold under agreements to repurchase - long                  term                                                                                                                                                                          |   |                                                                                      | ―     |   |   | (50,000 | ) |
| Repayment                  of Federal Home Loan Bank of New York advances - long term                                                                                                                                                                                              |   |                                                                                      | (10,877     | ) |   | (11,239 | ) |
| Net                  proceeds from issuance of subordinated debt issued in connection                  with                      Corporation-Obligated                  mandatory redeemable capital securities of subsidiary                  trusts          |   |                                                                                      | ―     |   |   | 9,975 |   |
| Cash                  dividends paid                                                                                                                                                                                                                                               |   |                                                                                      | (8,814      | ) |   | (6,935 | ) |
| Proceeds                  from exercise of common stock options                                                                                                                                                                                                                    |   |                                                                                      | 3,069       |   |   | 523 |   |
| Purchases                  of treasury stock                                                                                                                                                                                                                                       |   |                                                                                      | (1,409      | ) |   | (5,466 | ) |
| **Net                  cash provided by financing activities**                                                                                                                                                                                                                     |   | **$**                                                                                     | **178,686** |   | **$** | **182,852** |   |
| **Increase                  in Cash and Cash Equivalents**                                                                                                                                                                                                                         |   | **$**                                                                                     | **247,055** |   | **$** | **88,835** |   |
| **Cash                  and Cash Equivalents, Beginning of Period**                                                                                                                                                                                                                |   |                                                                                      | **65,295**  |   |   | **67,451** |   |
| **Cash                  and Cash Equivalents, End of Period**                                                                                                                                                                                                                      |   | **$**                                                                                     | **312,350** |   | **$** | **156,286** |   |
| **Supplemental                  Disclosures:**                                                                                                                                                                                                                                     |   |                                                                                      |        |   |   |   |   |
|     Interest                  paid                                                                                                                                                                                                                             |   | $                                                                                         | (46,234     | ) | $ | (43,121 | ) |
|     Income                  tax payments                                                                                                                                                                                                                       |   | $                                                                                         | (13,292     | ) | $ | (15,058 | ) |
|     Purchase                  of                  available for sale securities not yet settled, including interest                  receivable                                                                                                                |   | $                                                                                         | (26,185     | ) | $ | (884 | ) |
|     Purchase                  of                  held to maturity securities not yet settled, including interest                  receivable                                                                                                                  |   | $                                                                                         | (1,346      | ) | $ | ― |   |
|     Payment                  for held to maturity securities not yet settled at beginning of                  period,                  including interest     receivable                                                                   |   | $                                                                                         | ―     |   | $ | (924 | ) |
|     Transfer                  of                  available for sale securities to held to maturity securities at                  market                  value                                                                                               |   | $                                                                                         | ―     |   | $ | 298,312 |   |
|     Amortization                  of                  loss on transfer of available for sale securities to held to maturity                  securities                                                                                                        |   | $                                                                                         | (507        | ) | $ | ― |   |
|     Loans                  acquired in acquisition of Reliance Bank, including interest                  receivable                                                                                                                                            |   | $                                                                                         | ―     |   | $ | 10,869 |   |
|     Deposits                  assumed in acquisition of Reliance Bank, including interest                  payable                                                                                                                                             |   | $                                                                                         | ―     |   | $ | 23,933 |   |
|      Other                  assets (including intangibles) acquired in acquisition of Reliance                  Bank,                          net                  of                  other liabilities assumed |   | $                                                                                         | ―     |   | $ | 2,367 |   |
|     Change                  in shares held in trust for deferred compensation                                                                                                                                                                                  |   | $                                                                                         | (213        | ) | $ | (121 | ) |
|     Change                  in deferred compensation obligation                                                                                                                                                                                                |   | $                                                                                         | 213         |   | $ | 121 |   |
|     Change                  in accumulated other comprehensive (loss) income                                                                                                                                                                                   |   | $                                                                                         | (1,072      | ) | $ | 6 |   |
|     Non                  cash exercise of stock options and related tax benefit                                                                                                                                                                                |   | $                                                                                         | 7,367       |   | $ | 2,061 |   |
|     Non                  cash purchases of treasury stock related to the exercise of stock                  options                                                                                                                                            |   | $                                                                                         | (5,895      | ) | $ | (1,600 | ) |
|     Issuance                  of                  treasury stock related to the exercise of stock options                                                                                                                                                      |   | $                                                                                         | 9,235       |   | $ | 2,136 |   |

*See        notes to condensed consolidated financial statements*
*.*

----

| **U.S.B. HOLDING CO., INC.****CONDENSED                            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)** |
|--------------------------------------------------------------------------------------------------------------------------------------------------|

| **FOR                  THE NINE MONTHS ENDED SEPTEMBER 30, 2005****(000’s                  except share data)**                                                             |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                              |   | **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, 2005                                                                                                                                       |   |   | 20,346,814 |   | $ | 220 |   | $ | 184,166 |   | $ | 26,336 |   | $ | (22,855 | )  | $ | (2,780 | )  | $ | 2,746 |   | $ | (5,787 | )  | $ | 182,046 |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   | 24,631 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 24,631 |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive loss:Net                  unrealized securities loss                  arising during the period,                  net of tax benefit of $577 |  |   |  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,072 | ) |   | (1,072 | ) |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive loss                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,072 | ) |   | (1,072 | ) |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  comprehensive income                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 23,559 |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Five                  percent common stock dividend                                                                                                                               |   |   | 1,131,266 |   |   | 11 |   |   | 26,204 |   |   | (26,235 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | (20 | ) |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Five                  percent common stock dividend                  on treasury stock                                                                                            |   |   | (97,966 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | ― |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  dividends:Common                  ($0.40 per share)                                                                                                         |   |   |   |   |   |   |   |   |   |   |   | (8,784 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | (8,784 | ) |
| Junior                  preferred stock                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   | (10 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | (10 | ) |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock options exercised and                  related tax benefit                                                                                          |   |   | 657,007 |   |   |   |   |   | 1,201 |   |   |   |   |   | 9,235 |   |   |   |   |   |   |   |   |   |   |   | 10,436 |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchases                  of treasury stock                                                                                                                                      |   |   | (304,562 | ) |   |   |   |   | (285 | ) |   |   |   |   | (7,019 | ) |   |   |   |   |   |   |   |   |   |   | (7,304 | ) |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ESOP                  shares committed to be                  released                                                                                                            |   |   |   |   |   |   |   |   | 67 |   |   |   |   |   |   |   |   | 34 |   |   |   |   |   |   |   |   | 101 |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred                  compensation obligation                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (213 | ) |   | 213 |   |   |   |   |   | ― |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  at****September                  30,****2005**                                                                                                         | **21,732,559** |   | **$** | **231** |   | **$** | **211,353** |   | **$** | **15,938** |   | **$** | **(20,639** | **) ** | **$** | **(2,959** | **) ** | **$** | **2,959** |   | **$** | **(6,859** | **) ** | **$** | **200,024** |   |
|                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                   |

*See        notes to condensed consolidated financial        statements.*

----

| **U.S.B.                HOLDING CO., INC.****CONDENSED                    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| **FOR                  THE NINE MONTHS ENDED SEPTEMBER 30, 2004****(000’s,                  except share data)**                                                                              |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                |   | **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)                  Income** |   |  **Total****Stockholders’****Equity** |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at January 1, 2004                                                                                                                                                         |   |   | 19,487,790 |   | $ | 209 |   | $ | 159,628 |   | $ | 31,655 |   | $ | (18,225 | )  | $ | (2,491 | )  | $ | 2,327 |   | $ | (4,810 | )  | $ | 168,293 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   | 21,913 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 21,913 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income:Net                  unrealized securities loss                  arising during the period,                  net of tax benefit of                  $98 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (181 | ) |   | (181 | ) |
| Reclassification                  adjustment of                  net gains for securities sold,                  net of tax of $101                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 187 |   |   | 187 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 6 |   |   | 6 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  comprehensive income                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 21,919 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Five                  percent common stock dividend                                                                                                                                                 |   |   | 1,055,985 |   |   | 10 |   |   | 23,795 |   |   | (23,805 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | ― |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Five                  percent common stock dividend                  on treasury stock                                                                                                              |   |   | (88,325 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | ― |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  dividends:Common                  ($0.32 per share) Junior                  preferred stock                                                                                   |   |   |   |   |   |   |   |   |   |   |   | (6,925(10 | )) |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,925(10 | )) |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                  stock options exercised and                  related tax benefit                                                                                                            |   |   | 198,782 |   |   | 1 |   |   | 447 |   |   |   |   |   | 2,136 |   |   |   |   |   |   |   |   |   |   |   | 2,584 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchases                  of treasury stock                                                                                                                                                        |   |   | (329,771 | ) |   |   |   |   |   |   |   |   |   |   | (7,066 | ) |   |   |   |   |   |   |   |   |   |   | (7,066 | ) |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ESOP                  shares committed to be                  released                                                                                                                              |   |   |   |   |   |   |   |   | 179 |   |   |   |   |   |   |   |   | 97 |   |   |   |   |   |   |   |   | 276 |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred                  compensation obligation                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (121 | ) |   | 121 |   |   |   |   |   | ― |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  at****September                  30,****   2004**                                                                                                         | **20,324,461** |   | **$** | **220** |   | **$** | **184,049** |   | **$** | **22,828** |   | **$** | **(23,155** | **) ** | **$** | **(2,515** | **) ** | **$** | **2,448** |   | **$** | **(4,804** | **) ** | **$** | **179,071** |   |
|                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

*See        notes to condensed consolidated financial        statements.*

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| **U.S.B.                HOLDING CO., INC.****NOTES                  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
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| **1.** | **Principles                of Consolidation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|   | The                condensed consolidated financial statements include the accounts                of U.S.B.                Holding Co., Inc. and its wholly-owned subsidiaries (the “Company”), Union                State Bank (the “Bank”) and Ad Con, Inc. The condensed consolidated financial                statements also include the Bank’s wholly-owned subsidiaries, Dutch                Hill Realty Corp., U.S.B. Financial Services, Inc., and USB Delaware                Inc.,                including its wholly-owned subsidiary, TPNZ Preferred Funding Corporation                (“TPNZ”). All significant intercompany accounts and transactions are                eliminated in consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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|   | The                Company also has four subsidiary trusts, Union State Capital Trust                I,                Union State Statutory Trust II, USB Statutory Trust III, and Union                State                Statutory Trust IV (collectively, the “Trusts”), that are not consolidated                with the Company for financial reporting purposes in accordance with                accounting principles generally accepted in the United States of                America                (“GAAP”). The Trusts were established by the Company in 1997, 2001, 2002,                and 2004, respectively, for the purpose of issuing Corporation-Obligated                mandatory redeemable capital securities of subsidiary trusts (“Capital                Securities”) and acquiring junior subordinated debt from the Company. See                Note 10 to the Company’s Consolidated Financial Statements for the year                ended December 31, 2004 included in the Company’s 2004 Annual Report to                Stockholders for a further discussion of the Capital Securities and                the                junior subordinated debt issued by the Company. The Company owns                100                percent of the voting securities of each of the Trusts. The Company                has                fully and unconditionally guaranteed the Capital Securities along                with all                obligations of the Trusts under the trust agreements relating to                the                Capital Securities. The Company’s ability to make interest payments on the                subordinated debt is primarily dependent on the receipt of dividends                from                the Bank. See Note 11 of these notes to condensed consolidated financial                statements for a discussion of the limits on the Bank’s ability to pay                dividends to the Company. |
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| **2.** | **Basis                of Presentation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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|   | In                the opinion of management, the accompanying unaudited condensed                consolidated financial statements include all adjustments (comprised                of                only normal and recurring adjustments) necessary to present fairly                the                financial position of the Company as of September 30, 2005, the Company’s                operations for the three and nine months ended September 30, 2005                and                2004, and the Company’s cash flows and changes in stockholders’ equity for                the nine months ended September 30, 2005 and 2004. For purposes of                presenting the condensed consolidated statements of cash flows, cash                and                cash equivalents include cash and due from banks, as well as federal                funds                sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|   | The                Company distributed a five percent common stock dividend on September                23,                2005 to stockholders of record on September 9, 2005. The weighted                average                common shares outstanding and per common share amounts for the 2005                and                2004 periods have been adjusted to reflect the common stock                dividend.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|   | The                condensed consolidated financial statements have been prepared in                accordance with GAAP and predominant practices used within the banking                industry. A summary of the Company's significant accounting policies                is                set forth in Note 3 to the Consolidated Financial Statements included                in                the Company's 2004 Annual Report to Stockholders. In preparing such                financial statements, management is required to make estimates and                assumptions that affect the reported amounts of actual and contingent                assets and liabilities as of the dates of the condensed consolidated                statements of condition and the revenues and expenses for the periods                reported. Actual results could differ significantly from those                estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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| **U.S.B.                  HOLDING CO., INC.****NOTES                    TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
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|   | Estimates                that are particularly susceptible to significant change relate to                the                determination of the allowance for loan losses and reserve for unfunded                loan commitments and standby letters of credit, the related provision                for                credit losses, the determination of securities as other than temporarily                impaired, and the evaluation of valuation allowance for net deferred                tax                assets. In connection with the determination of the allowance for                loan                losses, reserve for unfunded loan commitments and standby letters                of                credit, and provision for credit losses, management obtains independent                appraisals for significant properties that collateralize loans with                real                estate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|   | These                condensed consolidated financial statements should be read in conjunction                with the Company’s Consolidated Financial Statements for the year ended                December 31, 2004 and related notes included in the Company’s 2004 Annual                Report to Stockholders and Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| **3.** | **Accounting                Pronouncements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | **Other-Than-Temporary                Impairment:** On November 3, 2005, the Financial Accounting                Standards Board (“FASB”) issued FASB Staff Position (“FSP”) Nos. FAS 115-1                and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its                Application to Certain Investments.” This FSP addresses the determination                as to when an investment is considered impaired, whether that impairment                is other than temporary, and the measurement of an impairment loss.                This                FSP also includes accounting considerations subsequent to the recognition                of an other-than-temporary impairment and requires certain disclosures                about unrealized losses that have not been recognized as                other-than-temporary impairments. This FSP nullifies certain requirements                of Emerging Issues Task Force (“EITF”) Issue 03-1, “The Meaning of                Other-Than-Temporary Impairment and Its Application to Certain                Investments,” and supersedes EITF Topic No. D-44, “Recognition of                Other-Than-Temporary Impairment upon the Planned Sale of a Security                Whose                Cost Exceeds Fair Value.” The guidance in this FSP amends FASB Statement                No. 115, “Accounting for Certain Investments in Debt and Equity                Securities.” The FSP is effective for reporting periods beginning after                December 15, 2005. The Company’s adoption of FSP Nos. 115-1 and FAS 124-1                on January 1, 2006 is not expected to have a material impact on its                consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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| **4.** | **Pending                Accounting Pronouncements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | **Accounting                for Exchanges of Nonmonetary Assets:**In December 2004, the FASB                issued Statement of Financial Accounting Standards (“SFAS”) No. 153,                “Accounting for Exchanges of Nonmonetary Assets” (“SFAS No. 153”). SFAS                No. 153 amends Accounting Principles Board (“APB”) Opinion No. 29,                “Accounting for Nonmonetary Transactions.” SFAS No. 153 eliminates the                exception for nonmonetary exchanges of similar productive assets                and                replaces it with a general exception for exchanges of nonmonetary                assets                that do not have commercial substance. A nonmonetary exchange has                commercial substance if the future cash flows of the entity are expected                to change significantly as a result of the exchange. SFAS No. 153                is                effective for nonmonetary asset exchanges occurring in fiscal periods                beginning after June 15, 2005. The Company’s adoption of SFAS No. 153                effective as of January 1, 2006 is not expected to have a material                impact                on its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|   | **Accounting                for Stock-Based Compensation:**SFAS No. 123, “Accounting for                Stock-Based Compensation” (“SFAS No. 123”), establishes a fair value based                method of accounting for stock-based compensation plans and encouraged,                but did not require, entities to adopt that method in place of the                intrinsic value method under APB Opinion No. 25, “Accounting for Stock                Issued to Employees” (“APB No. 25”). SFAS No. 123 was revised (“SFAS No.                123R”) in December 2004 to require accounting for stock-based compensation                using a fair value based method in the financial statements. On April                14,                2005, the Securities and Exchange Commission deferred the required                effective date of SFAS No. 123R to the first fiscal year beginning                after                June 15, 2005. Under the SFAS No. 123R transition method, compensation                cost is recognized on or after the required effective date for the                portion                of outstanding awards for which the requisite service has not yet                been                rendered, based on the grant date fair value of those awards calculated                under SFAS No. 123 for either recognition or pro forma disclosures.                For                periods before the required effective date, entities may elect to                apply a                modified version of retrospective application under which financial                statements for prior periods are adjusted on a basis consistent with                the                pro forma disclosures required for those periods by SFAS No. 123.                Management has decided SFAS No. 123R will be applied prospectively                beginning on the effective date for the Company (January 1, 2006).                The                effect of complying with SFAS No. 123R will have a significant effect                on                the Company’s net income as disclosed in Note 7 of these notes to                condensed consolidated financial                statements. |

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| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
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|   | **Accounting                  for Conditional Asset Retirement Obligations:**FASB Interpretation                  No. 47 (“FIN No. 47”) pertains to SFAS No. 143, “Accounting for Asset                  Retirement Obligations (“SFAS No. 143”), which applies to legal                  obligations associated with the retirement of a tangible long-lived                  asset                  that results from the acquisition, construction, or development                  and/or the                  normal operation of a long-lived asset. An entity shall recognize                  the fair                  value of a liability for an asset retirement obligation in the                  period in                  which it is incurred if a reasonable estimate of fair value can                  be made.                  FIN No. 47 is effective no later than the end of fiscal years ending                  after                  December 15, 2005. The Company’s adoption of FIN No. 47 will not have any                  impact on its consolidated financial statements.                                                                                                                                                                                                                                                                                      |
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|   | **Accounting                  Changes and Error Corrections:** In May 2005, the FASB issued SFAS                  No. 154, “Accounting Changes and Error Corrections” (“SFAS No. 154”),                  which is a replacement of APB Opinion No. 20, “Accounting Changes” and                  SFAS No. 3, “Reporting Accounting Changes in Interim Financial                  Statements.” SFAS No. 154 provides guidance on the accounting for and                  reporting of accounting changes and error corrections. SFAS No.                  154 also                  establishes, unless impracticable, retrospective application as                  the                  required method for reporting a change in accounting principle.                  SFAS No.                  154 is effective for accounting changes and corrections of errors                  made in                  fiscal years beginning after December 15, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| **5.** | **Acquisition                  of Reliance Bank**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|   | As                  of the close of business on March 19, 2004, the Bank assumed approximately                  $23.9 million of deposits and acquired approximately $10.5 million                  of                  single-family residential mortgage loans, $10.7 million of cash                  and cash                  equivalents, $2.1 million of other assets, and $0.3 million of                  other loans                  in connection with the acquisition of Reliance Bank. The premium                  paid for                  the deposits assumed was $2.2 million, or 9.4 percent, and $0.2                  million,                  or 1.6 percent, for the single-family residential loans acquired.                  Reliance                  Bank was closed by the New York Superintendent of Banks, which                  appointed                  the FDIC as Receiver. Reliance Bank, which operated as a one branch                  bank                  at 1200 Mamaroneck Avenue, White Plains, New York, became a Union                  State                  Bank branch effective immediately after its closing. During February                  2005,                  the Bank closed the Mamaroneck Avenue branch, and the deposits                  were                  transferred to the Bank’s Martine Avenue, White Plains, New York,                  branch. |
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|   | The                  assumption of deposits and acquisition of certain assets of Reliance                  Bank                  has been accounted for as a business combination in accordance                  with SFAS                  No.141, “Accounting for Business Combinations.” Assets, time deposits, and                  other liabilities acquired have been recorded at their estimated                  fair                  values as of March 19, 2004, and a core deposit intangible of $0.7                  million                  was recorded based on a core deposit valuation study. Goodwill                  of $1.4                  million was also recorded. In accordance with SFAS No. 142, “Goodwill and                  Other Intangible Assets,” the core deposit intangible is being amortized                  over its estimated life and the goodwill component will be tested                  for                  impairment annually at year end. As of September 30, 2005, the                  net core                  deposit intangible and goodwill related to the Reliance Bank acquisition                  was $0.5 million and $1.4 million,                  respectively.                                                                                                                                                                        |

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| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
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| **6.** | **Intangible                    Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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|   | The                    gross carrying amount and accumulated amortization of intangible                    assets                    acquired in connection with branch and bank acquisitions were                    $9.0 million                    and $5.1 million as of September 30, 2005, and $9.0 million and                    $4.2                    million as of December 31, 2004, respectively. The intangible                    amortization                    expense for the three and nine months ended September 30, 2005                    was $0.3                    million and $0.9 million, as compared to $0.3 million and $0.8                    million,                    respectively, for the 2004 prior periods. The annual amortization                    expense                    for the remaining life of all intangibles will vary throughout                    the                    amortization periods for the remaining 14 years, during which                    periods the                    maximum amount of amortization will be $1.1 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| **7.** | **Accounting                    for Stock-Based Compensation**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|   | SFAS                    No. 148, “Accounting for Stock Based Compensation - Transition and                    Procedure” (“SFAS No. 148"), amends SFAS No. 123 to provide alternate                    methods of transition for an entity that voluntarily changes                    to the fair                    value based method of accounting for stock-based employee compensation.                    It                    also amends the disclosure provisions of that statement to require                    prominent disclosure about the effects on reported net income                    of an                    entity’s accounting policy decisions with respect to stock-based employee                    compensation. Finally, this statement amends APB Opinion No.                    28, “Interim                    Financial Reporting,” to require disclosure about those effects in interim                    financial information.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|   | Information                    on the Company’s stock option plans can be found in Note 17 to the                    Company’s Consolidated Financial Statements for the year ended December                    31, 2004, included in the 2004 Annual Report to Stockholders.                    The Company                    has elected to continue to measure compensation expense for its                    stock-based compensation plans under the recognition and measurement                    principles of APB No. 25 and to provide pro forma disclosures                    of                    compensation expense measured by the fair value based method                    as prescribed                    by SFAS No. 123. No stock-based employee compensation is reflected                    in net                    income, as all options granted under the Company’s plans had an exercise                    price at least equal to the market value of the underlying common                    stock on                    the date of grant. Pro forma information regarding the Company’s net                    income and basic and diluted earnings per common share, as required                    by                    SFAS No. 123, has been determined as if the Company had accounted                    for its                    stock options under the fair value method of that standard. The                    fair value                    for these options was estimated at the date of grant using a                    Black-Scholes                    option-pricing model and is recognized over the options’ vesting                    period. |
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|   | The                    following table compares the Company’s net income and basic and diluted                    earnings per common share, as reported, to the pro forma results                    as if the                    fair value method of accounting for options prescribed by SFAS                    No. 123 had                    been applied for the three and nine months ended September 30,                    2005 and                    2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
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|   |                                                                                                                                                                                                                             |   |   **(000’s,                  except share                  data)**  |     |
|   |                                                                                                                                                                                                                             |   | **Three                  Months Ended****September                  30,**           |     | **Nine                  Months Ended****September                  30,**  |   |
|   |                                                                                                                                                                                                                             |   | **2005**                                                                                 |     | **2004**                                                                       |   | **2005** |   | **2004** |   |
|   |                    Net income, as reported                                                                                                                                                                                  |   | $                                                                                        | 8,431    |                                                                           | $      | 7,519    |   | $ | 24,631 |   | $ | 21,913 |   |
|   |                                                                                                                                                                                                                             |   |                                                                                     |     |                                                                           |   |     |   |   |   |   |   |   |   |
|   |                    Less: preferred stock dividends                                                                                                                                                                          |   |                                                                                     | ―  |                                                                           |   | ―  |   |   | 10 |   |   | 10 |   |
|   |                                                                                                                                                                                                                             |   |                                                                                     |     |                                                                           |   |     |   |   |   |   |   |   |   |
|   |                    Less: total stock-based compensation                    expense determined under fair value                    based method for all awards, net of                    related tax effects |   |                                                                                     | 928      |                                                                           |   | 1,183    |   |   | 1,800 |   |   | 2,133 |   |
|   |                                                                                                                                                                                                                             |   |                                                                                     |     |                                                                           |   |     |   |   |   |   |   |   |   |
|   |                    Pro forma net income available to                    common stockholders                                                                                                                            |   | $                                                                                        | 7,503    |                                                                           | $      | 6,336    |   | $ | 22,821 |   | $ | 19,770 |   |
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|   |                    Earnings per common share:                                                                                                                                                                               |   |                                                                                     |     |                                                                           |   |     |   |   |   |   |   |   |   |
|   |                                                                                                                                                                                                                             |   |                                                                                     |     |                                                                           |   |     |   |   |   |   |   |   |   |
|   |     Basic                  -                  as reported    Basic                  -                  pro forma                                                                         |   | $                                                                                        | 0.390.35 |                                                                           | $      | 0.350.30 |   | $ | 1.141.06 |   | $ | 1.020.92 |   |
|   |                                                                                                                                                                                                                             |   |                                                                                     |     |                                                                           |   |     |   |   |   |   |   |   |   |
|   |     Diluted                  - as reported    Diluted                  - pro forma                                                                                                       |   | $                                                                                        | 0.370.33 |                                                                           | $      | 0.340.28 |   | $ | 1.101.02 |   | $ | 0.980.88 |   |

|   | The                following weighted average assumptions were used for Director Stock                Option                Plan grants for the three months ended September 30, 2005 and 2004,                respectively: dividend yields of 2.60 and 1.93 percent; volatility                factors                of the expected market price of the Company’s common stock of 33.16 and                39.57 percent; risk free interest rates of 4.04 and 3.89 percent;                and                expected lives of 7.69 and 7.63 years. The following weighted average                assumptions were used for Director Stock Option Plan grants for the                nine                months ended September 30, 2005 and 2004, respectively: dividend                yields of                2.34 and 2.16 percent; volatility factors of the expected market                price of                the Company’s common stock of 35.65 and 40.25 percent; risk free interest                rates of 3.98 and 3.34 percent; and expected lives of 7.67 and 7.63                years. |
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|   | The                following weighted average assumptions were used for Employee Stock                Option                Plan grants for the three months ended September 30, 2005 and 2004,                respectively: dividend yields of 2.60 and 1.93 percent; volatility                factors                of the expected market price of the Company’s common stock of 33.69 and                39.59 percent; risk free interest rates of 4.06 and 3.58 percent;                and                expected lives of 7.31 and 8.52 years. The following weighted average                assumptions were used for Employee Stock Option Plan grants for the                nine                months ended September 30, 2005 and 2004, respectively: dividend                yields of                2.60 and 2.00 percent; volatility factors of the expected market                price of                the Company’s common stock of 34.19 and 39.77 percent; risk-free interest                rates of 4.07 and 3.60 percent; and expected lives of 7.32 and 8.50                years. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **8.** | **Earnings                Per Common Share (“EPS”)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The                computation of basic and diluted earnings per common share for the                three                and nine months ended September 30, 2005 and 2004 is as                follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

| **U.S.B.                  HOLDING CO., INC.****NOTES                    TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|--------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                               |   |                                                                      |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                               |   | **(000’s                  except share data)**                      |       |
|                                                                                                                                                                                                               |   | **Three                  Months Ended****September                  30,** |       | **Nine                  Months Ended****September                  30,** |   |
|                                                                                                                                                                                                               |   | **2005**                                                                  |       | **2004** |   | **2005** |   | **2004** |   |
| **                   Numerator:**                                                                                                                                                                             |   |                                                                      |       |   |   |   |   |
|                       Net income                                                                                                                                                               |   | $                                                                         | 8,431      |   | $ | 7,519 |   | $ | 24,631 |   | $ | 21,913 |   |
|                       Less preferred stock dividends                                                                                                                                           |   |                                                                      | ―    |   |   | ― |   |   | 10 |   |   | 10 |   |
|                                                                                                                                                                                                               |   |                                                                      |       |   |   |   |
|                    Net income for basic and diluted                      earnings per common share - net income                      available to common stockholders |   | $                                                                         | 8,431      |   | $ | 7,519 |   | $ | 24,621 |   | $ | 21,903 |   |
|                                                                                                                                                                                                               |   |                                                                      |       |   |   |   |   |   |   |   |   |   |   |
| **                   Denominator:**                                                                                                                                                                           |   |                                                                      |       |   |   |   |   |   |   |   |   |   |   |
|                    Denominator for basic earnings per                      common share - weighted average shares                                                                         |   |                                                                      | 21,685,896 |   |   | 21,340,626 |   |   | 21,567,925 |   |   | 21,427,984 |   |
|                                                                                                                                                                                                               |   |                                                                      |       |   |   |   |   |   |   |   |   |   |   |
|                    Effects of dilutive securities:                      Director and employee ― stock options                                                                       |   |                                                                      | 919,432    |   |   | 937,954 |   |   | 898,298 |   |   | 945,527 |   |
|                                                                                                                                                                                                               |   |                                                                      |       |   |   |   |   |   |   |   |   |   |   |
|                    Denominator for diluted earnings per                      common share - adjusted weighted                      average shares                     |   |                                                                      | 22,605,328 |   |   | 22,278,580 |   |   | 22,466,223 |   |   | 22,373,511 |   |
|                                                                                                                                                                                                               |   |                                                                      |       |   |   |   |   |   |   |   |   |   |   |
|                    Basic earnings per common share                                                                                                                                                            |   | $                                                                         | 0.39       |   | $ | 0.35 |   | $ | 1.14 |   | $ | 1.02 |   |
|                    Diluted earnings per common share                                                                                                                                                          |   | $                                                                         | 0.37       |   | $ | 0.34 |   | $ | 1.10 |   | $ | 0.98 |   |

| **9.** | **Securities**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | In                accordance with SFAS No. 115, “Accounting for Certain Investments in Debt                and Equity Securities,” the Company’s investment policies include a                determination of the appropriate classification of securities at                the time                of purchase. Securities that may be sold as part of the Company’s                asset/liability or liquidity management, or in response to or in                anticipation of changes in interest rates and resulting prepayment                risk,                or for similar factors, are classified as available for sale. Securities                that the Company has the ability and positive intent to hold to maturity                are classified as held to maturity and carried at amortized cost.                Realized                gains and losses on the sales of all securities, determined by using                the                specific identification method, are reported in earnings. Securities                available for sale are shown in the condensed consolidated statements                of                condition at estimated fair value and the resulting net unrealized                gains                and losses, net of tax, are shown in accumulated other comprehensive                income (loss). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The                decision to sell securities available for sale is based on management’s                assessment of changes in economic or financial market conditions,                interest                rate risk, and the Company’s financial position and liquidity. Estimated                fair values for securities are based on quoted market prices, where                available. If quoted market prices are not available, estimated fair                values are based on quoted market prices of similar instruments.                Securities in an unrealized loss position are periodically evaluated                for                other-than-temporary impairment. Management considers the effect                of                interest rates, credit ratings and other factors on the valuation                of such                securities, as well as the Company’s intent and ability to hold such                securities until a forecasted recovery or maturity occurs. The Company                does not acquire securities for the purpose of engaging in trading                activities.                                                                                                                                                                                                                               |

----

| **U.S.B.                  HOLDING CO., INC.****NOTES                    TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|--------------------------------------------------------------------------------------------------------------------------------------|

|   | The                    Company did not have gross realized gains or losses during the                    three                    months ended September 30, 2005 and 2004, and during the nine                    months ended                    September 30, 2005. During the nine months ended September 30,                    2004, the                    Company had gross realized gains from sales of securities available                    for                    sale of $1.2 million. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | A                    summary of the amortized cost, estimated fair values, and related                    gross                    unrealized gains and losses of securities at September 30, 2005                    and                    December 31, 2004 is as                    follows:                                                                                                                                                                                                      |

|   |                                                                     |   |                        |        |
|--------|--------------------------------------------------------------------------|--------|-----------------------------|-------------|
|   |                                                                     |   | **(000’s)**           |        |
|   |   **                   September 30, 2005**               |   |  **Amortized****Cost** |        | **Gross****Unrealized****Gains** |   | **Gross****Unrealized****Losses** |   | **Estimated****Fair****Value** |   |
|   | **                   Available for Sale:**                          |   |                        |        |   |   |   |   |
|   |                    U.S. government agencies                         |   | $                           | 72,919      |   | $ | ― |   | $ | 637 |   | $ | 72,282 |   |
|   |                    Mortgage-backed securities                       |   |                        | 333,010     |   |   | 1,743 |   |   | 3,061 |   |   | 331,692 |   |
|   |                    Obligations of states and political subdivisions |   |                        | 230         |   |   | 20 |   |   | ― |   |   | 250 |   |
|   |                    Corporate securities                             |   |                        | 115         |   |   | 31 |   |   | ― |   |   | 146 |   |
|   | **                   Total securities available for sale**          |   | **$**                       | **406,274** |   | **$** | **1,794** |   | **$** | **3,698** |   | **$** | **404,370** |   |
|   |                                                                     |   |                        |        |   |   |   |   |   |   |   |   |   |   |
|   | **                   Held to Maturity:**                            |   |                        |        |   |   |   |   |   |   |   |   |   |   |
|   |                    U.S. government agencies                         |   | $                           | 618,943     |   | $ | 2,335 |   | $ | 3,654 |   | $ | 617,624 |   |
|   |                    Obligations of states and political subdivisions |   |                        | 102,846     |   |   | 2,492 |   |   | 611 |   |   | 104,727 |   |
|   |                    **Total securities held to maturity**            |   | **$**                       | **721,789** |   | **$** | **4,827** |   | **$** | **4,265** |   | **$** | **722,351** |   |

|   |                                                            |   |                  |        |
|--------|-----------------------------------------------------------------|--------|-----------------------|-------------|
|   |                                                            |   | **(000’s)**     |        |
|   | **                   December 31, 2004**                   |   | **Amortized****Cost** |        | **Gross****Unrealized****Gains** |   | **Gross****Unrealized****Losses** |   | **Estimated****Fair****Value** |   |
|   | **                   Available for Sale:**                 |   |                  |        |   |   |   |   |   |   |
|   | ** **U.S. government agencies                              |   | $                     | 165,142     |   | $ | 99 |   | $ | 461 |   | $ | 164,780 |   |
|   | ** **Mortgage-backed securities                            |   |                  | 423,143     |   |   | 2,103 |   |   | 1,575 |   |   | 423,671 |   |
|   | ** **Obligations of states and political subdivisions      |   |                  | 920         |   |   | 51 |   |   | ― |   |   | 971 |   |
|   | ** **Corporate securities                                  |   |                  | 114         |   |   | 36 |   |   | ― |   |   | 150 |   |
|   | **                   Total securities available for sale** |   | **$**                 | **589,319** |   | **$** | **2,289** |   | **$** | **2,036** |   | **$** | **589,572** |   |
|   |                                                            |   |                  |        |   |   |   |   |   |   |   |   |   |   |
|   | **                   Held to Maturity:**                   |   |                  |        |   |   |   |   |   |   |   |   |   |   |
|   | ** **U.S. government agencies                              |   | $                     | 418,371     |   | $ | 3,596 |   | $ | 1,521 |   | $ | 420,446 |   |
|   | ** **Obligations of states and political subdivisions      |   |                  | 83,830      |   |   | 3,503 |   |   | 351 |   |   | 86,982 |   |
|   | **                   Total securities held to maturity**   |   | **$**                 | **502,201** |   | **$** | **7,099** |   | **$** | **1,872** |   | **$** | **507,428** |   |

|    | Available                  for sale and held to maturity obligations of states and political                  subdivisions are not subject to Federal income tax.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **10.** | **Loans**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|    | Nonaccrual                  loans were $9.9 million at September 30, 2005 and $1.6 million                  at December                  31, 2004. Total nonaccrual loans at September 30, 2005 primarily                  consisted                  of two customer relationships of $4.7 million and $4.3 million.                  The loans                  related to one customer relationship aggregating $4.7 million have                  been                  placed on nonaccrual status as a result of fraudulent activity                  by the                  borrower related to the real estate collateral of the loans. The                  Bank is                  pursuing collection of the principal balance of the loan from a                  title                  insurance company, which insured the Bank’s first mortgage positions. The                  loans related to another customer relationship aggregating $4.3                  million                  involve a real estate construction project that has experienced                  unexpected                  delays in completing the construction. The loans are also supported                  by                  personal guarantees. Restructured loans were $0.1 million at both                  September 30, 2005 and December 31, 2004. |

----

| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------|

|    | Substantially                  all of the nonaccruing and restructured loans are collateralized                  by real                  estate. At September 30, 2005, the Company had and continues to                  have no                  commitments to lend additional funds to any customers with nonaccrual                  or                  restructured loan balances, with the exception of one customer                  relationship involving real estate construction loans aggregating                  $4.3                  million on nonaccrual status. Additional funds may be used by the                  customer                  to complete the real estate project. At September 30, 2005, there                  are                  loans aggregating $8.8 million, which are not on nonaccrual status,                  that                  are potential problem loans, which may result in the loans being                  placed on                  nonaccrual status in the near future. Potential problem loans aggregating                  $7.3 million are related to one customer relationship and are well                  collateralized by real estate and supported by personal guarantees.                  Accruing loans that are contractually past due 90 days or more                  at                  September 30, 2005 are immaterial. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    | At                  September 30, 2005 and December 31, 2004, the recorded investment                  in loans                  that are considered to be impaired approximated $18.5 million and                  $1.3                  million, of which $9.6 million and $1.3 million were in nonaccrual                  status,                  respectively. The average recorded investment in impaired loans                  for the                  nine months ended September 30, 2005 and 2004, and for the year                  ended                  December 31, 2004 was $9.5 million, $4.9 million, and $4.3 million,                  respectively. Interest income recognized by the Company on impaired                  loans                  for the three and nine months ended September 30, 2005 was $0.3                  million                  and $0.8 million, respectively. Such interest recognized for the                  three and                  nine months ended September 30, 2004 was insignificant. As applicable,                  each impaired loan has a related allowance for loan losses.                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    | The                  total allowance for loan losses specifically allocated to one impaired                  real estate construction loan with a balance of $1.0 million at                  December                  31, 2004 was $0.2 million. On November 30, 2004, the Superior Court                  of New                  Jersey issued an unfavorable ruling regarding the foreclosure on                  other                  collateral securing this loan and a related personal guarantee.                  As a                  result of the unfavorable ruling, the Company charged-off $2.9                  million of                  this loan in the fourth quarter of 2004. The Company is appealing                  this                  decision. As of February 3, 2005, all 83 condominium units of the                  project                  that secured the real estate construction loan have been sold and                  the                  remaining loan balance has been paid in full. The Company maintains                  a                  specific allocation of the reserve for unfunded letters of credit                  related                  to this loan of $0.2 million at September 30, 2005.                                                                                                                                           |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **11.** | **Borrowings                  and Stockholders’ Equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    | The                  Company utilizes short-term and long-term borrowings primarily                  to meet                  funding requirements for its asset growth, balance sheet leverage,                  and to                  manage its interest rate risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    | Short-term                  borrowings include securities sold under agreements to repurchase,                  federal                  funds purchased, and short-term Federal Home Loan Bank of New York                  (“FHLB”) advances. Short-term securities sold under agreements to                  repurchase generally mature between one and 365 days. The Bank                  may borrow,                  when available, under master security sale and repurchase agreements                  through four primary investment firms, the FHLB, and to a lesser                  extent,                  its customers. The Bank had no short-term repurchase agreements                  outstanding with the FHLB at September 30, 2005. At December 31,                  2004, the                  Bank had short-term repurchase agreements outstanding with the                  FHLB of                  $25.0 million at a weighted average interest rate of 2.10 percent.                  These                  short-term borrowings with the FHLB were collateralized by securities                  with                  an aggregate carrying value of $29.4 million and estimated fair                  value of                  $29.7 million.                                                                                                              |

----

| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------|

|   | At                  September 30, 2005 and December 31, 2004, the Bank had short-term                  repurchase agreements with customers of $5.4 million and $2.3 million                  at a                  weighted average interest rate of 3.31 percent and 1.93 percent,                  respectively. These short-term customer borrowings were collateralized                  by                  securities with both an aggregate carrying value and estimated                  fair value                  of $5.5 million at September 30, 2005 and $2.4 million at December                  31,                  2004. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Federal                  funds purchased represent overnight funds. The Bank has federal                  funds                  purchase lines available with six financial institutions for a                  total of                  $75.0 million. At September 30, 2005 and December 31, 2004, the                  Bank had                  no federal funds purchased balances outstanding.                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Short-term                  FHLB advances are borrowings with original maturities between one                  and 365                  days. There were no short-term FHLB advances outstanding at September                  30,                  2005 and December 31, 2004.                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Additional                  information with respect to short-term borrowings as of and for                  the nine                  months ended September 30, 2005 and 2004 is presented in the following                  table.                                                                                                                                                                                                                                                                                                                                                                                                        |

|   |                                                                     |   |                                                  |   |     |
|--------|--------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|----------|
|   |                                                                     |   | **(000’s                  except percentages)** |   |     |
|   | **                   Short-Term                  Borrowings**       |   | **2005**                                              |   | **2004** |   |   |
|   |                    Balance                  at September 30         |   | $                                                     | 5,423  |     | $ | 265,651 |   |   |
|   |                    Average                  balance outstanding     |   | $                                                     | 15,442 |     | $ | 153,040 |   |   |
|   |                    Weighted-average                  interest rate: |   |                                                  |   |     |   |   |   |   |
|   |     As                  of September 30              |   |                                                  | 3.31   | %        |   | 1.88 | % |   |
|   |     Paid                  during period              |   |                                                  | 2.96   | %        |   | 1.23 | % |   |

|   | The                Bank had long-term borrowings, which have original maturities of                over one                year, of $515.0 million in securities sold under agreements to repurchase                at September 30, 2005 and December 31, 2004. These borrowings have                an                original term of between five and ten years at interest rates of                1.99                percent to 6.08 percent that are callable on certain dates after                an                initial noncall period at the option of the counterparty to the repurchase                agreements. The long-term borrowing in securities sold under agreements                to                repurchase may not be repaid in full prior to maturity without penalty.                As                of September 30, 2005 and December 31, 2004, these borrowings were                collateralized by securities with an aggregate carrying value of                $521.3                million and $518.8 million, and an estimated fair value of $522.0                million                and $520.3 million, respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------|

|   | At                  September 30, 2005 and December 31, 2004, long-term FHLB advances                  totaled                  $71.8 million and $82.7 million at interest rates of between 4.55                  percent                  to 5.99 percent and 4.55 percent and 6.05 percent, respectively.                  At                  September 30, 2005, borrowings totaling $1.8 million are amortizing                  advances having scheduled payments. Other borrowings totaling $70.0                  million have an original term of ten years that are callable on                  certain                  dates after an initial noncall period at the option of the counterparty                  to                  the advance. Advances at December 31, 2004 include $2.7 million                  of                  amortizing advances having scheduled periodic payments, $10.0 million                  that                  are payable at maturity, and $70.0 million that are callable on                  certain                  dates after an initial noncall period at the option of the issuer.                  The                  long-term FHLB advances may not be repaid in full prior to maturity                  without penalty. At September 30, 2005 and December 31, 2004, these                  borrowings were collateralized by a pledge to the FHLB of a security                  interest in certain mortgage-related assets having an aggregate                  carrying                  value of $87.5 million and $96.5 million, respectively. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | A                  summary of long-term, fixed-rate borrowings distributed based upon                  remaining contractual payment date and expected option call date                  at                  September 30, 2005, with comparative totals for December 31, 2004,                  is as                  follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|   |                                                         |                                                  |   |
|--------|--------------------------------------------------------------|-------------------------------------------------------|--------|
|   |                                                         | **(000’s                  except percentages)** |   |
|   |   **                   Long-Term Borrowings** |  **Within****1                  Year**           |   | **After                  1****But                  Within****5                  Years** |   |  **After****5                  Years** |   |  **2005****Total** |   |  2004Total |   |
|   |                    Contractual Payment Date:            |                                                  |   |   |   |   |   |   |   |   |   |
|   |                    Total long-term borrowing            | $20,018                                               |   | $215,086 |   | $351,728 |   | $586,832 |   | $597,709 |   |
|   |                    Weighted-average interest rate       | 4.56%                                                 |   | 5.50% |   | 3.58% |   | 4.32% |   | 4.33% |   |
|   |                    Expected Call Date:                  |                                                  |   |   |   |   |   |   |   |   |   |
|   |                    Total long-term borrowing            | $62,018                                               |   | $386,086 |   | $138,728 |   | $586,832 |   | $597,709 |   |
|   |                    Weighted-average interest rate       | 2.94%                                                 |   | 4.45% |   | 4.56% |   | 4.32% |   | 4.33% |   |

|   | At                September 30, 2005 and December 31, 2004, the Bank held 293,417 shares                and                311,354 shares of capital stock of the FHLB with a carrying value                of $29.3                million and $31.1 million, respectively, which is required in order                to                borrow under the short- and long-term advances and securities sold                under                agreements to repurchase programs from the FHLB. The FHLB generally                limits                borrowings up to an aggregate of 30 percent of total assets, or for                collateral pledged by TPNZ, 75 percent of net equity, excluding securities                sold under agreements to repurchase, upon the prerequisite purchase                of                additional shares of FHLB stock. Any advances made from the FHLB                are                required to be collateralized by the FHLB stock and certain other                assets                of the Bank.                                                                                                   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The                ability of the Company and Bank to pay cash dividends in the future                is                restricted by various regulatory requirements. The Company's ability                to                pay cash dividends to its stockholders is primarily dependent upon                the                receipt of dividends from the Bank. The Bank's dividends to the Company                may not exceed the sum of the Bank's undistributed net income for                that                year and its undistributed net income for the preceding two years,                less                any required transfers to additional paid-in capital. In addition,                the                Bank may not declare and pay dividends more often than quarterly,                and no                dividends may be declared or paid if there is any impairment of the                Bank’s                capital stock. At September 30, 2005, the Bank could pay dividends                of                $60.8 million to the Company without having to obtain prior regulatory                approval. |

----

| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------|

|    | On                  March 23, 2005, the Company’s Board of Directors authorized the repurchase                  of up to 315,000 common shares, or approximately 1.5 percent of                  the                  Company’s outstanding common stock at that date. Repurchases of common                  stock are authorized to be made from time to time in open-market                  and                  private transactions throughout 2005 as, in the opinion of management,                  market conditions may warrant. The repurchased common shares will                  be held                  as treasury stock and will be available for general corporate purposes.                  The March 23, 2005 stock repurchase plan replaces the previous                  December                  17, 2003 repurchase plan, which authorized the repurchase of up                  to 330,750                  common shares. The Company did not purchase any shares under its                  repurchase plan for the three months ended September 30, 2005.                  For the                  nine months ended September 30, 2005, the Company purchased 70,140                  shares                  of common stock under its repurchase plan at an aggregate cost                  of                  approximately $1.4 million. For the three and nine months ended                  September                  30, 2004, the Company purchased 33,075 and 279,153 shares of common                  stock                  under its repurchase plan at an aggregate cost of approximately                  $0.7                  million and $5.5 million, respectively. There were also 120,559                  shares of                  common stock for the three months ended September 30, 2005, and                  249,494                  and 84,420 shares of common stock for the nine months ended September                  30,                  2005 and 2004, respectively, acquired in connection with stock                  option                  exercises. The Company did not acquire any shares in connection                  with stock                  option exercises for the three months ended September 30,                  2004. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **12.** | **Corporation-Obligated                  Mandatory Redeemable Capital Securities of Subsidiary                  Trusts**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    | The                  total amount of Capital Securities outstanding as of September                  30, 2005 is                  $60.0 million. Capital Securities are generally permitted to be                  included                  in Tier I regulatory capital in an amount not in excess of 25 percent                  of                  Tier I Capital, with the remainder included in Total Capital. At                  September                  30, 2005, Tier I Capital totaled $261.5 million, which included                  $60.0                  million of Capital Securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| **13.** | **Commitments                  and Contingencies**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    | In                  the normal course of business, various commitments to extend credit                  are                  made that are not reflected in the accompanying condensed consolidated                  financial statements. At September 30, 2005, formal credit lines,                  loan                  commitments, which are primarily loans collateralized by real estate,                  and                  credit card loans approximated $354.9 million, $122.6 million,                  and $38.7                  million, respectively. Outstanding standby letters of credit totaled                  $45.8                  million. Such amounts represent the maximum risk of loss on these                  commitments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    | Standby                  letters of credit are issued to guarantee financial performance                  or                  obligations of the Bank’s customers. Generally, standby letters of credit                  are either partially or fully collateralized by cash, real estate,                  or                  other assets, and, in some cases, are not collateralized. In most                  cases,                  personal guarantees are obtained. Standby letters of credit are                  considered                  in the Bank’s evaluation of its reserve for unfunded loan commitments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    | The                  Company is party to employment agreements with the Company’s Chief                  Executive Officer, Thomas E. Hales, and its President and Chief                  Operating                  Officer, Raymond J. Crotty, which are described in Note 16 to the                  Company’s Consolidated Financial Statements included in the 2004 Annual                  Report to Stockholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    | On                  April 18, 2005, the Company and the Bank entered into a letter                  agreement                  with Steven T. Sabatini, Senior Executive Vice President, Chief                  Financial                  Officer, and Assistant Secretary of the Company and the Bank, pursuant                  to                  which Mr. Sabatini provided notice of his decision to retire from                  his                  positions with the Company and the Bank, and from all other positions                  held                  with any subsidiaries or affiliates of the Company or the Bank,                  effective                  as of the close of business on January 6, 2006. The letter agreement                  also                  provided notice that Mr. Sabatini had decided not to stand for                  re-election                  to the Board of Directors of the Company at the Annual Meeting                  of                  Stockholders of the Company held on May 25,                  2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

----

| **U.S.B.                    HOLDING CO., INC.****NOTES                      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------|

|   | Pursuant                    to the terms of the letter agreement, Mr. Sabatini will continue                    to serve                    the Company and the Bank in his current positions through the                    close of                    business on January 6, 2006. In addition, Mr. Sabatini, the Company,                    and                    the Bank have agreed to terminate Mr. Sabatini’s existing Employment                    Agreement dated July 28, 2004 (the “Employment Agreement”), which is                    described in Note 16 to the Company’s Consolidated Financial Statements                    included in the 2004 Annual Report to Stockholders, effective                    as of April                    18, 2005. The letter agreement further provides, among other                    things, that,                    from the date of the letter agreement through January 6, 2006,                    Mr.                    Sabatini will continue to receive the salary and bonus currently                    provided                    for under the terminated Employment Agreement, will continue                    to be treated                    as an employee of the Company and the Bank for the purposes of                    participation in employee benefit plans and programs of the Company                    and                    the Bank (other than stock option plans), and will continue to                    be provided                    with certain insurance coverage and indemnification.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Effective                    May 19, 1999, the Company adopted the Retirement Plan for non-employee                    Directors of U.S.B. Holding Co., Inc. and Certain Affiliates                    (the                    “Director Retirement Plan”). At September 30, 2005 and December 31, 2004,                    the Company had a recorded liability of $554,000 and $522,000,                    respectively, to provide for the present value of payments expected                    to be                    made under the Director Retirement Plan. The discount rate used                    to compute                    the present value obligation is 5.25 percent for both periods.                    At                    September 30, 2005 and December 31, 2004, a net intangible asset                    of                    $181,000 and $255,000, respectively, is recorded, reflecting                    the                    unamortized prior service cost, which is being amortized over                    the average                    remaining service period of the current non-employee Directors.                    Benefit                    cost for the Director Retirement Plan for the three and nine                    months ended                    September 30, 2005 was approximately $36,000 and $107,000, of                    which                    $25,000 and $75,000 represents amortization of prior service                    cost, and                    $11,000 and $32,000 represents current service cost, respectively.                    Benefit                    cost for the Director Retirement Plan for the three and nine                    months ended                    September 30, 2004 was approximately $34,000 and $101,000, of                    which                    $24,000 and $71,000 represents amortization of prior service                    cost, and                    $10,000 and $30,000 represents current service cost,                    respectively. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Other                    commitments are also described in Note 16 to the Company’s Consolidated                    Financial Statements for the year ended December 31, 2004, included                    in the                    Company’s 2004 Annual Report to Stockholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The                    Company is party to various legal proceedings arising in the                    ordinary                    course of business. Because litigation is inherently unpredictable,                    particularly in cases where claimants seek substantial or indeterminate                    damages or where investigations and proceedings are in the early                    phases,                    the Company cannot predict with certainty the loss or range of                    loss                    related to such matters, how such matters will be resolved, when                    they will                    ultimately be resolved, or what the eventual settlement, fine,                    penalty, or                    other relief might be. Consequently, the Company cannot estimate                    losses or                    ranges of losses for matters where there is only a reasonable                    possibility                    that a loss may have been incurred. Although the ultimate outcome                    of these                    matters cannot be ascertained at this time, it is the opinion                    of                    management, after consultation with counsel, that the resolution                    of such                    matters will not have a material adverse effect on the financial                    condition                    of the Company, taken as a whole; such resolution may, however,                    have a                    material effect on the operating results in any future period,                    depending                    on the level of income for such period.                                                                                                                                                                                                                                                                                                                                                           |

----

| **U.S.B.                          HOLDING CO., INC.****NOTES                            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)** |
|------------------------------------------------------------------------------------------------------------------------------------------------------|

|    | The                    Company provides reserves in accordance with Statement of Financial                    Accounting Standards No. 5, “Accounting for Contingencies,” as required.                    The ultimate resolution of any legal proceedings may differ from                    the                    amounts reserved, if any.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **14.** | **Segment                    Information**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | The                    Company has one reportable segment, “Community Banking.” All of the                    Company’s activities are interrelated, and each activity is dependent                    and                    assessed based on how each of the activities of the Company supports                    the                    others. For example, commercial lending is dependent upon the                    ability of                    the Bank to fund itself with deposits and other borrowings and                    to manage                    interest rate and credit risk. This situation is also similar                    for consumer                    and residential mortgage lending. Accordingly, all significant                    operating                    decisions are based upon analysis of the Company as one operating                    segment                    or unit. |
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|    | The                    Company operates only in the U.S. domestic market, specifically                    the lower                    Hudson Valley, which includes the counties of Rockland, Westchester,                    Orange, Putnam and Dutchess, New York, as well as New York City                    and Long                    Island, New York, and Southern Connecticut. For the nine months                    ended                    September 30, 2005 and 2004, there is no customer that accounted                    for more                    than ten percent of the Company’s                    revenue.                                                                                                                                                                                                                                                                                                         |

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**U.S.B.        HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S                    DISCUSSION AND ANALYSIS****OF                    FINANCIAL CONDITION AND RESULTS OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Forward-Looking        Statements***

*This        Quarterly Report on Form 10-Q contains a number of “forward-looking statements”        within the meaning of Section 27A of the Securities Act of 1933, as amended,        and        Section 21E of the Securities Exchange Act of 1934, as amended. These        forward-looking statements may be identified by the use of such words as        “believe,”  “expect,”  “anticipate,”  “intend,” “should,”  “will,”  “would,”  “could,”  “may,” “planned,”  “estimated,”  “potential,”  “outlook,” “predict,”  “project” and similar terms and phrases, including references        to assumptions.*

*Forward-looking        statements are based on various assumptions and analyses made by the Company        in        light of management's experience and its perception of historical trends,        current conditions and expected future developments, as well as other factors        the Company believes are appropriate under the circumstances. These statements        are not guarantees of future performance and are subject to risks, uncertainties        and other factors (many of which are beyond the Company’s control) that could        cause actual results to differ materially from future results expressed or        implied by such forward-looking statements. These factors include, without        limitation, the following: the timing and occurrence or non-occurrence of        events        may be subject to circumstances beyond the Company’s control; there may be        increases in competitive pressure among financial institutions or from        non-financial institutions; changes in the interest rate environment may        reduce        interest margins or affect the value of the Company’s investments; changes in        deposit flows, loan demand or real estate values may adversely affect the        Company’s business; changes in accounting principles, policies or guidelines may        cause the Company’s financial condition to be perceived differently; general        economic conditions, either nationally or locally in some or all of the areas        in        which the Company does business, or conditions in the securities markets        or the        banking industry may be less favorable than the Company currently anticipates;        legislative or regulatory changes may adversely affect the Company’s business;        applicable technological changes may be more difficult or expensive than        the        Company anticipates; success or consummation of new business initiatives        may be        more difficult or expensive than the Company anticipates; or litigation or        matters before regulatory agencies, whether currently existing or commencing        in        the future, may delay the occurrence or non-occurrence of events longer than        the        Company anticipates.*

*The        Company's forward-looking statements are only as of the date on which such        statements are made. By making any forward-looking statements, the Company        assumes no duty to update them to reflect new, changing or unanticipated        events        or circumstances. These risks and uncertainties should be considered in        evaluating forward-looking statements and undue reliance should not be placed        on        these statements.*

**OVERVIEW**

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Critical        Accounting Policies**

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**COMPARISON        OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 2005 AND **

**DECEMBER        31, 2004**

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**COMPARISON        OF RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,        2005        AND 2004**

**Earnings**

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Net        Interest Income**

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**U.S.B.        HOLDING CO., INC.**

| **ITEM                2.** | **MANAGEMENT’S DISCUSSION AND                  ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                  OF                  OPERATIONS** |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Provision        for Credit Losses**

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Non-Interest        Income**

**Non-Interest        Expenses**

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**U.S.B. HOLDING CO., INC.**
| **ITEM                  2.** | **MANAGEMENT’S DISCUSSION AND                    ANALYSIS****OF FINANCIAL CONDITION AND RESULTS                    OF                    OPERATIONS** |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  ° | Decrease of $128,000 (6.2 percent)                and                $80,000 (1.4 percent) in occupancy and equipment expense. The decrease                for                both periods primarily reflects a reevaluation of maintenance contracts,                a                decrease in rent expense as a result of closing a White Plains branch                during the 2005 first quarter, and also for the three months, a decrease                in depreciation expense due to fixed assets being fully depreciated                during                the second half of 2005. |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  ° | Increase                of $184,000 (29.7 percent) and decrease of $125,000 (6.0 percent)                in                advertising and business development expense. The increase for the                three                month period was due to television, print, and radio advertising,                as well                as an increase in expenses related to promotional events. The decrease                for                the nine months reflects a decrease in promotional and business                development events.                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  ° | Decrease                of $287,000 (32.8 percent) and $13,000 (0.7 percent) in professional                fees.                The decrease for both periods is primarily due to lower legal fees                related                to a non-performing real estate construction loan. The decrease for                the                nine months ended September 30, 2005 was partially offset by higher                audit                costs.                                                                                                                                        |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  ° | Decrease                of $122,000 (28.8 percent) and $134,000 (12.1 percent) in communications                expense. The decrease for both periods was primarily due to a decrease                in                data communication expense.                                                                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  ° | Decrease                of $38,000 (25.7 percent) and $109,000 (20.5 percent) in stationery                and                printing. The decrease for both periods was primarily due to a lower                amount of office related equipment and supplies purchased in                2005.                                                                                                                                                                                                                                                                                                   |

**Income        Taxes**

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**U.S.B.        HOLDING CO., INC.**
| **ITEM                  3.** | **QUANTITATIVE                    AND QUALITATIVE DISCLOSURES ABOUT MARKET                    RISK** |
|------------------------------|------------------------------------------------------------------------------------------------------|

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**U.S.B.      HOLDING CO.,      INC.**
| **ITEM                4.** | **CONTROLS AND                  PROCEDURES** |
|----------------------------|----------------------------------------------|

----

**PART        II - OTHER INFORMATION**

| **ITEM                  2.** | **UNREGISTERED SALES OF EQUITY                    SECURITIES******AND                    USE OF                    PROCEEDS**** |
|------------------------------|---------------------------------------------------------------------------------------------------------------------------------|

|                                                |   |                                                                         |    |                                                                     |   |                                                                                                                                                           |   |                                                                                                                                                                 |    |
|-----------------------------------------------------|--------|------------------------------------------------------------------------------|---------|--------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
| **                   Period**                  |   | **Total                  Number****of                  Shares****Purchased** |    | **Average****Price                  Paid****Per                  Share** |   | **Total                  Number****of                  Shares****Purchased                  as****Part                  of Publicly****Announced****Programs** |   | **Maximum****Number                  of****Shares                  that****may                  yet be****Purchased****Under                  the****Programs****1** |    |
|                    July 1 to July 31           |   |                                                                         | ― |                                                                     |   | ―                                                                                                                                                        |   |                                                                                                                                                                 | N/A     |   |   | 244,860 |   |
|                    August 1 to August 31       |   |                                                                         | ― |                                                                     |   | ―                                                                                                                                                        |   |                                                                                                                                                                 | N/A     |   |   | 244,860 |   |
|                    September 1 to September 30 |   |                                                                         | ― |                                                                     |   | ―                                                                                                                                                        |   |                                                                                                                                                                 | N/A     |   |   | 244,860 |   |
| **                   Total**                   |   |                                                                         | ― |                                                                     |   | ―                                                                                                                                                        |   |                                                                                                                                                                 | ― |   |   | 244,860 |   |

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| **ITEM                  6.**           | **EXHIBITS** |
|----------------------------------------|--------------|
|                                   |         |
| **Exhibit                  No.**  | **Exhibit**  |

| (3)                      (a) | Restated                      Certificate of Incorporation of Registrant (incorporated herein                      by                      reference to Registrant’s Quarterly Report on Form 10-Q for the quarter                      ended June 30, 2002 (“2002 Second Quarter 10-Q”), Exhibit                      (3)(a)).                                                                                                                                                              |
|------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (3)                      (b) | Bylaws                      of Registrant (incorporated herein by reference to Registrant’s                      Registration Statement on Form S-14 (File No. 2-79734), Exhibit                      (3)(b)).                                                                                                                                                                                                                                                                                           |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (a) | Junior                      Subordinated Indenture, dated February 5, 1997, between Registrant                      and The                      Chase Manhattan Bank, as trustee (incorporated herein by reference                      to                      Registrant’s Annual Report on Form 10-K for the year ended December 31,                      1996 (File No. 001-12811) (“1996 10-K”), Exhibit                      (4)(a)).                                                 |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (b) | Guarantee                      Agreement, dated February 5, 1997, by and between Registrant                      and The Chase                      Manhattan Bank, as trustee for the holders of 9.58% Capital                      Securities of                      Union State Capital Trust I (incorporated herein by reference                      to                      Registrant’s 1996 10-K, Exhibit (4)(b)).                                                                              |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (c) | Amended                      and Restated Declaration of Trust of Union State Capital Trust                      I                      (incorporated herein by reference to Registrant’s 1996 10-K, Exhibit                      (4)(c)).                                                                                                                                                                                                                                                               |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (d) | Junior                      Subordinated Indenture, dated July 31, 2001, between Registrant                      and State                      Street Bank and Trust Company of Connecticut, National Association,                      as                      trustee (incorporated herein by reference to Registrant’s Quarterly Report                      on Form 10-Q for the quarter ended September 30, 2001 (“2001 Third Quarter                      10-Q”), Exhibit (4)(d)).    |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (e) | Guarantee                      Agreement, dated July 31, 2001, by and between Registrant and                      State Street                      Bank and Trust Company of Connecticut, National Association,                      as trustee                      for the holders of Capital Securities of Union State Statutory                      Trust II                      (incorporated herein by reference to Registrant’s 2001 Third Quarter 10-Q,                      Exhibit (4)(e)). |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (f) | Amended                      and Restated Declaration of Trust of Union State Statutory                      Trust II                      (incorporated herein by reference to Registrant’s 2001 Third Quarter 10-Q,                      Exhibit (4)(f)).                                                                                                                                                                                                                                              |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (g) | Indenture,                      dated June 26, 2002, between Registrant and State Street Bank                      and Trust                      Company of Connecticut, National Association, as trustee, (incorporated                      herein by reference to Registrant’s 2002 Second Quarter 10-Q), Exhibit                      (4)(g)).                                                                                                                                                      |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (4)                      (h) | Guarantee                      Agreement dated June 26, 2002, by and between Registrant and                      State Street                      Bank and Trust Company of Connecticut, National Association,                      as trustee                      for the holders of Capital Securities of USB Statutory Trust                      III,                      (incorporated herein by reference to Registrant’s 2002 Second Quarter                      10-Q, Exhibit (4)(h)).       |

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| **ITEM                      6.** | **EXHIBITS                      (cont'd)** |
|----------------------------------|--------------------------------------------|

| (4)                        (i)  | Amended                        and Restated Declaration of Trust of USB Statutory Trust                        III,                        (incorporated herein by reference to Registrant’s 2002 Second Quarter                        10-Q, Exhibit (4)(i)).                                                                                                                                                                                                                     |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (4)                        (j)  | Registrant’s                        Dividend Reinvestment and Stock Purchase Plan (incorporated                        herein by                        reference to Registrant’s Form S-3 Registration Statement filed December                        14, 1993 (file No. 33-72788)).                                                                                                                                                                                       |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (4)                        (k)  | Amended                        and Restated Declaration of Trust of Union State Statutory                        Trust IV dated                        March 25, 2004 (incorporated herein by reference to the Registrant’s                        Quarterly Report on Form 10-Q for the quarter ended March                        31, 2004 (“2004                        First Quarter 10-Q”), Exhibit (10)(ad)).                                                    |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (4)                        (l)  | Indenture                        dated March 25, 2004 between Registrant and Wilmington Trust                        Company, as                        Trustee (incorporated herein by reference to the Registrant’s 2004 First                        Quarter 10-Q, Exhibit (10)(ae)).                                                                                                                                                                                           |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (4)                        (m)  | Guarantee                        Agreement dated March 24, 2004 by and between registrant                        and Wilmington                        Trust Company, as Trustee for the holders of Capital Securities                        of Union                        State Bank Statutory Trust IV (incorporated herein by reference                        to the                        Registrant’s 2004 First Quarter 10-Q, Exhibit                        (10)(af)). |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (10)                        (a) | Agreement                        of Employment dated as of November 16, 2003 between the Company                        and the                        Bank and Thomas E. Hales (incorporated herein by reference                        to Registrant’s                        Annual Report on Form 10-K for the year ended December 31,                        2003, Exhibit                        (10)(a)).                                                                   |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (10)                        (b) | Agreement                        of Employment dated as of July 28, 2004 between the Company                        and the Bank                        and Raymond J. Crotty (incorporated herein by reference to                        Registrant’s                        Quarterly Report on Form 10-Q for the quarter ended June                        30, 2004 (“2004                        Second Quarter 10-Q”), Exhibit (10)(b)).                          |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (10)                        (c) | Registrant’s                        1993 Incentive Stock Option Plan (incorporated herein by                        reference to                        Registrant’s Quarterly Report on Form 10-Q for the quarter ended September                        30, 1999 (File No. 002-79734), Exhibit (10)(e)).                                                                                                                                                                   |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (10)                        (d) | Registrant’s                        Employee Stock Ownership Plan (With 401(k) Provisions) (incorporated                        herein by reference to Registrant’s Annual Report on Form 10-K for the                        year ended December 31, 2001 (“2001 10-K”), Exhibit                        (10)(g)).                                                                                                                                               |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (10)                        (e) | Registrant’s                        Director Stock Option Plan (incorporated herein by reference                        to                        Registrant’s 1996 10-K, Exhibit (10)(f)).                                                                                                                                                                                                                                                                                  |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (10)                        (f) | Registrant’s                        1998 Director Stock Option Plan (incorporated herein by reference                        to                        Registrant’s Form S-8 Registration Statement, filed June 5, 1998 (File                        No.                        333-56169), Exhibit (99.1)).                                                                                                                                                                 |

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| **ITEM                          6.** | **EXHIBITS                          (cont'd)** |
|--------------------------------------|------------------------------------------------|

| (10)                          (g) | Registrant’s                          Key Employees’ Supplemental Investment Plan, as amended July 1, 1997                          and                          September 1, 1998 (incorporated herein by reference to                          the Plan’s Annual                          Report on Form 11-K for the year ended December 31, 1998,                          (File No.                          001-12811, Exhibit (10)(j)).                                                                                       |
|-----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (h) | Registrant’s                          Key Employees’ Supplemental Diversified Investment Plan dated September                          1,                          1998 (incorporated herein by reference to the Plan’s Annual Report on Form                          11-K for the year ended December 31, 1998 (File No. 001-12811),                          Exhibit                          (10)(k)).                                                                                                                           |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (i) | Registrant’s                          1997 Employee Stock Option Plan (incorporated herein by                          reference to                          Exhibit A to Registrant’s Proxy Statement filed April 16, 1997 (File No.                          001-12811)).                                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (j) | Tappan                          Zee Financial, Inc. 1996 Stock Option Plan for Officers                          and Employees                          (“Employees Stock Option Plan”) (incorporated herein by reference to                          Exhibit A to Tappan Zee Financial, Inc.’s Proxy Statement for use in                          connection with its 1996 Annual Meeting of Shareholders                          (File No.                          000-26466) (“Tappan Zee 1996 Proxy Statement”)). |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (k) | Tappan                          Zee Financial, Inc. 1996 Stock Option Plan for Outside                          Directors (“Outside                          Director Option Plan”) (incorporated herein by reference to Exhibit B to                          the Tappan Zee 1996 Proxy Statement).                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (l) | Amendment                          No. 1 to the Outside Director Option Plan (incorporated                          herein by                          reference to the Tappan Zee 1997 10-K, Exhibit 10.2.1).                                                                                                                                                                                                                                                                                                                                         |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (m) | Amendment                          No. 2 to the Outside Director Option Plan (incorporated                          herein by                          reference to Appendix B to the Tappan Zee 1997 Proxy                          Statement).                                                                                                                                                                                                                                                                                                       |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (n) | Deferred                          Compensation Plan for Directors of Tarrytowns Bank, FSB                          (Incorporated                          herein by reference to the Registration Statement on Form                          S-1 (file No.                          33-94128) filed on June 30, 1995, as amended, Exhibit                          10.7).                                                                                                                                                                              |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (o) | Forms                          of Stock Option Agreement by and between Tappan Zee Financial,                          Inc., and                          recipients of stock options granted pursuant to the Employees                          Stock Option                          Plan and the Outside Director Option Plan (incorporated                          herein by                          reference to the Tappan Zee 1997 10-K, Exhibit 10.16).                                                                                      |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (p) | Registrant’s                          2005 Employee Stock Option Plan (incorporated herein by                          reference to                          Appendix A to the Registrant’s Proxy Statement filed April 28,                          2005).                                                                                                                                                                                                                                                                                |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (q) | Form                          of Employee Stock Option Agreement by and between the Registrant                          and                          recipients of stock options granted pursuant to the Employee                          Stock Option                          Plan (incorporated herein by reference to Exhibit 10.1                          to the Registrant’s                          Form 8-K filed on June 16, 2005).                                                                                                  |
|                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (10)                          (r) | Registrant’s                          2005 Director Stock Option Plan (incorporated herein by                          reference to                          Appendix B to the Registrant’s Proxy Statement filed April 28,                          2005).                                                                                                                                                                                                                                                                                |

----

| **ITEM                            6.** | **EXHIBITS                            (cont'd)** |
|----------------------------------------|--------------------------------------------------|

| (10)                          (s)  | Form                          of Director Stock Option Agreement by and between the Registrant                          and                          recipients of stock options granted pursuant to the Director                          Stock Option                          Plan (incorporated herein by reference to Exhibit 10.2                          to the Registrant’s                          Form 8-K filed on June 16, 2005).      |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (t)  | Registrant’s                          Retirement Plan for Non-Employee Directors of U.S.B. Holding                          Co., Inc. and                          Certain Affiliates dated effective as of May 19, 1999,                          and as amended                          March 20, 2002 (incorporated herein by reference to the                          Registrant’s 2001                          10-K, Exhibit (10)(w)). |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (u)  | Asset                          Purchase and Account Assumption Agreement by and between                          Union State Bank                          and La Jolla Bank dated May 25, 2000 (incorporated herein                          by reference to                          the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June                          30, 2000, Exhibit (10)(oo)).                               |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (v)  | U.S.B.                          Holding Co., Inc. Severance Plan dated January 30, 2002                          (incorporated                          herein by reference to Registrant’s 2001 10-K, Exhibit                          (10)(y)).                                                                                                                                                                                                    |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (w)  | Asset                          Purchase and Liability Assumption Agreement dated as of                          June 14, 2002, by                          and between Union State Bank and Fourth Federal Savings                          Bank (incorporated                          herein by reference to Registrant’s 2002 Second Quarter 10-Q, Exhibit                          (10)(z)).                                                     |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (x)  | U.S.B.                          Holding Co., Inc. Executive Incentive Bonus Plan as amended                          February 24,                          1999 (incorporated herein by reference to Exhibit A to                          Registrant’s Proxy                          Statement filed April 27, 1999 (File No. 002-79734)).                                                                                                         |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (y)  | Amendment                          No. 2 to the Key Employees’ Supplemental Investment Plan dated September                          1, 2003 (incorporated herein by reference to the Registrant’s Quarterly                          Report on Form 10-Q for the quarter ended September 30,                          2003 (“2003 Third                          Quarter 10-Q”), Exhibit (10)(ab)).                               |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (z)  | Amendment                          No. 1 to the Key Employees’ Diversified Investment Plan dated September 1,                          2003 (incorporated herein by reference to the Registrant’s 2003 Third                          Quarter 10-Q, Exhibit (10)(ac)).                                                                                                                                                                         |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)                          (aa) | Letter                          Agreement dated April 18, 2005 between the Registrant and                          Steven T.                          Sabatini (incorporated by reference to the Registrant’s Report on Form 8-K                          filed April 20, 2005).                                                                                                                                                                     |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (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.*                                                                                                                                                                                                                                              |

----

**SIGNATURES**

**U.S.B.        HOLDING CO., INC.**

|                                                                                                     |   |   |                                                                                                                                                                                                                |
|----------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| /s/ Thomas                E. Hales                                                                  |   |   | /s/ Steven                T. Sabatini                                                                                                                                                                          |
|                                                                                                          |   |   |                                                                                                                                                                                                                     |
| Thomas                E. HalesChairman of the Board,Chief Executive Officer, and                Director |   |   | Steven                  T. SabatiniSenior Executive Vice President,Chief Financial Officer, and Assistant                  Secretary (Principal                  Financial and Accounting                  Officer) |

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