SECURITIES AND EXCHANGE COMMISSION
                       ----------------------------------

                             WASHINGTON, D.C. 20549
                             ----------------------

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

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

        For the Quarter Ended March 31, 2003 Commission File No. 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              (I.R.S. Employer
      incorporation or organization)             Identification No.)


                 100 DUTCH HILL ROAD, ORANGEBURG, NEW YORK 10962
              -----------------------------------------------------
              (Address of principal executive office with 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 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                  CLASS                     OUTSTANDING AT MAY 2, 2003
         ---------------------------------------------------------------
         Common stock, par value                    18,564,653
            $0.01 per share

<PAGE>

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

                                TABLE OF CONTENTS
                                -----------------

                                                                       PAGE NO.
                                                                       --------

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

         CONDENSED CONSOLIDATED STATEMENTS OF                             1
         CONDITION AS OF MARCH 31, 2003 AND
         DECEMBER 31, 2002.

         CONDENSED CONSOLIDATED STATEMENTS OF                             2
         INCOME FOR THE THREE MONTHS ENDED
         MARCH 31, 2003 AND 2002.

         CONDENSED CONSOLIDATED STATEMENTS OF                             3
         CASH FLOWS FOR THE THREE MONTHS ENDED
         MARCH 31, 2003 AND 2002.

         CONDENSED CONSOLIDATED STATEMENTS OF                             5
         CHANGES IN STOCKHOLDERS' EQUITY FOR
         THE THREE MONTHS ENDED MARCH 31, 2003
         AND 2002.

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL                        7
         STATEMENTS.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF                         15
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES                        22
         ABOUT MARKET RISK.

ITEM 4.  NTROLS AND PROCEDURES                                           23

PART II. OTHER INFORMATION AND SIGNATURES

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.                               24
         SIGNATURES                                                      28
         CERTIFICATIONS                                                  29


                                      - i -


<PAGE>


ITEM 1.  PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
U.S.B. HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
----------------------------------------------------------
(000'S, EXCEPT SHARE DATA)                                              MARCH 31,    DECEMBER 31,
                                                                          2003            2002
                                                                      --------------------------
<S>                                                                   <C>            <C>
ASSETS
------
Cash and due from banks                                               $    59,415    $    66,301
Federal funds sold                                                         13,200         24,500
                                                                      -----------    -----------
Cash and cash equivalents                                                  72,615         90,801
Interest bearing deposits in other banks                                       20             20
Securities:
    Available for sale (at estimated fair value)                          736,420        775,509
    Held to maturity (estimated fair value of
       $219,275 in 2003 and $281,424 in 2002)                             212,712        274,894
Loans, net of allowance for loan losses of
    $14,429 in 2003 and $14,168 in 2002                                 1,366,096      1,336,273
Premises and equipment, net                                                13,327         11,299
Accrued interest receivable                                                10,632         12,412
Federal Home Loan Bank of New York stock                                   30,850         25,144
Other assets                                                               14,234         16,514
                                                                      --------------------------
TOTAL ASSETS                                                          $ 2,456,906    $ 2,542,866
                                                                      ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES:
Non-interest bearing deposits                                         $   253,515    $   260,012
Interest bearing deposits:
    NOW accounts                                                          112,739        105,015
    Money market accounts                                                 116,064         89,258
    Savings deposits                                                      434,508        453,976
    Time deposits                                                         691,305        643,526
                                                                      --------------------------
TOTAL DEPOSITS                                                          1,608,131      1,551,787
Accrued interest payable                                                    5,590          5,738
Accrued expenses and other liabilities                                     14,963         12,017
Securities transactions not yet settled                                        --        263,090
Securities sold under agreements to repurchase                            508,571        393,205
Federal Home Loan Bank of New York advances                               110,007        110,889
                                                                      --------------------------
TOTAL                                                                   2,247,262      2,336,726
Corporation-Obligated mandatory redeemable capital
     securities of subsidiary trusts                                       50,000         50,000
Minority interest-junior preferred stock of consolidated subsidiary           128            129
Commitments and contingencies (Note 10)
STOCKHOLDERS' EQUITY:
Preferred stock, no par value
    Authorized shares: 10,000,000; no shares outstanding                       --             --
    Common stock, $0.01 par value; authorized shares 50,000,000;
       Issued shares of 19,888,938 in 2003 and 19,802,296 in 2002             199            198
    Additional paid-in capital                                            140,220        140,054
    Retained earnings                                                      34,402         28,648
    Treasury stock, at cost; common shares 1,250,085 in 2003 and
       1,300,716 in 2002                                                  (15,598)       (15,777)
    Common stock held for benefit plans                                    (1,945)        (1,691)
    Deferred compensation obligation                                        1,684          1,398
    Accumulated other comprehensive income                                    554          3,181
                                                                      -----------    -----------
TOTAL STOCKHOLDERS' EQUITY                                                159,516        156,011
                                                                      --------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $ 2,456,906    $ 2,542,866
                                                                      ==========================
</TABLE>

See notes to condensed consolidated financial statements.


                                       1
<PAGE>


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

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                                                                   MARCH 31,
                                                             2003            2002
                                                         ---------------------------
                                                          (000'S, EXCEPT SHARE DATA)
<S>                                                         <C>             <C>
INTEREST INCOME:
Interest and fees on loans                                  $21,371         $20,266
Interest on federal funds sold                                  142             179
Interest and dividends on securities:
         Mortgage-backed securities                           5,343           4,879
         U.S. government agencies                             3,337           3,818
         Obligations of states and political subdivisions       837             893
         Corporate and other                                      2             222
Interest on deposits in other banks                               1               2
Dividends on Federal Home Loan Bank of New York stock           322             215
                                                            -----------------------
TOTAL INTEREST INCOME                                        31,355          30,474
                                                            -----------------------
INTEREST EXPENSE:
Interest on deposits                                          5,874           7,132
Interest on borrowings                                        6,303           5,273
Interest on Corporation - Obligated mandatory redeemable
         capital securities of subsidiary trusts                884             776
                                                            -----------------------
TOTAL INTEREST EXPENSE                                       13,061          13,181
                                                            -----------------------

NET INTEREST INCOME                                          18,294          17,293
Provision for credit losses                                     339           1,232
                                                            -----------------------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES        17,955          16,061
                                                            -----------------------
NON-INTEREST INCOME:
Service charges and fees                                        918             807
Other income                                                    779             695
Gain on securities transactions - net                         3,032           1,075
                                                            -----------------------
TOTAL NON-INTEREST INCOME                                     4,729           2,577
                                                            -----------------------
NON-INTEREST EXPENSES:
Salaries and employee benefits                                6,467           5,638
Occupancy and equipment                                       1,684           1,549
Advertising and business development                            564             423
Professional fees                                               338             266
Communications                                                  311             284
Stationery and printing                                         177             202
FDIC insurance                                                   73              72
Amortization of intangibles                                     254             226
Other                                                           954             804
                                                            -----------------------
TOTAL NON-INTEREST EXPENSES                                  10,822           9,464
                                                            -----------------------
Income before income taxes                                   11,862           9,174
Provision for income taxes                                    4,242           3,165
                                                            -----------------------
NET INCOME                                                  $ 7,620         $ 6,009
                                                            =======================
BASIC EARNINGS PER COMMON SHARE                             $  0.41         $  0.33
                                                            =======================
DILUTED EARNINGS PER COMMON SHARE                           $  0.40         $  0.32
                                                            =======================
</TABLE>

See notes to condensed consolidated financial statements.


                                       2
<PAGE>


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

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED
                                                                                   MARCH 31,
                                                                               2003        2002
                                                                           ------------------------
<S>                                                                        <C>          <C>
OPERATING ACTIVITIES:                                                              (000'S)
Net income                                                                 $   7,620    $   6,009
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Provision for credit losses                                                   339        1,232
   Depreciation and amortization                                                 736          671
   Amortization of premiums on securities - net                                  182          439
   Deferred income tax benefit - net                                          (1,323)        (528)
   Gains on securities transactions - net                                     (3,032)      (1,075)
Noncash benefit plan expense                                                     101           81
Decrease (increase) in accrued interest receivable                             1,780       (3,167)
Decrease in accrued interest payable                                            (148)      (1,762)
Increase in accrued income tax payable                                         3,421        3,397
Other - net                                                                    3,492        1,155
                                                                           ----------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                     13,168        6,452
                                                                           ----------------------
INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale                         160,998       26,054
Proceeds from principal paydowns, redemptions and maturities of:
   Securities available for sale                                              94,024       47,800
   Securities held to maturity                                                63,139       16,987
Purchases of securities available for sale                                  (480,317)          --
Purchases of securities held to maturity                                        (864)     (35,844)
Net (purchases) redemptions of Federal Home Loan Bank of New York stock       (5,706)          28
Net decrease in interest bearing deposits in other banks                          --          269
Increase in loans outstanding, net                                           (30,162)     (59,351)
Purchases of premises and equipment - net                                     (1,370)        (352)
                                                                           ----------------------
NET CASH USED FOR INVESTING ACTIVITIES                                      (200,258)      (4,409)
                                                                           ----------------------
FINANCING ACTIVITIES:
Net increase in non-interest bearing deposits,
   NOW, money market and savings accounts                                      8,565        6,083
Increase (decrease) in time deposits, net of withdrawals and maturities       47,779       (5,530)
Increase (decrease) in securities sold under agreements
   to repurchase -  short-term                                                   366         (173)
Proceeds from securities sold under agreements to repurchase - long-term     115,000           --
Repayment of Federal Home Loan Bank of New York
    advances - long-term                                                        (882)        (832)
Redemption of junior preferred stock of consolidated subsidiary, net               1           --
Cash dividends paid                                                           (1,866)      (1,661)
Proceeds from exercise of common stock options                                 1,124          197
Purchases of treasury stock                                                   (1,183)          --
                                                                           ----------------------
NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES                       $ 168,904    $  (1,916)
                                                                           ----------------------
         (Continued)
</TABLE>


                                       3
<PAGE>

U.S.B. HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONT'D)
--------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED
                                                                                MARCH 31,
                                                                             2003        2002
                                                                          -----------------------
                                                                                  (000'S)

<S>                                                                       <C>          <C>
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                          $ (18,186)   $     127
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                               90,801       69,821
                                                                          ----------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                  $  72,615    $  69,948
                                                                          ======================
Supplemental Disclosures:
   Interest paid                                                          $  13,209    $  14,943
                                                                          ----------------------
   Income tax payments                                                    $     460    $      45
                                                                          ----------------------
   Purchases of securities, including interest receivable, settled
   (not yet settled):
         Available for sale                                               $ 263,090    $      --
                                                                          ----------------------
         Held to maturity                                                 $      --    $  (1,206)
                                                                          ----------------------
   Change in shares held in trust for deferred compensation               $    (286)   $    (188)
                                                                          ----------------------
   Change in deferred compensation obligation                             $     286    $     188
                                                                          ----------------------
   Change in accumulated other comprehensive income                       $  (2,627)   $  (2,672)
                                                                          ----------------------
   Non cash exercise of stock options and related tax benefit             $   1,242    $     560
                                                                          ----------------------
   Purchases of treasury stock related to the exercise of stock options   $    (874)   $    (543)
                                                                          ----------------------
   Issuance of treasury stock related to the exercise of stock options    $   2,236    $     179
                                                                          ----------------------
</TABLE>

See notes to condensed consolidated financial statements.


                                       4
<PAGE>

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

                    FOR THE THREE MONTHS ENDED MARCH 31, 2003
                           (000'S, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                                                                           ACCUMU-
                                                                                                             LATED
                                                                                                 DEFERRED    OTHER
                                     COMMON STOCK    ADDITIONAL                     COMMON STOCK  COMPEN-   COMPRE-          TOTAL
                                    SHARES      PAR     PAID-IN  RETAINED  TREASURY     HELD FOR   SATION   HENSIVE   STOCKHOLDERS'
                                    ------      ---     -------  --------  --------     --------   ------   -------   -------------
<S>                                <C>        <C>      <C>       <C>      <C>           <C>        <C>     <C>         <C>
Balance at  January 1, 2003        18,501,580 $   198  $140,054  $28,648  $(15,777)     $(1,691)   $1,398   $ 3,181     $156,011

Net income                                                         7,620                                                   7,620

Other comprehensive income:
   Net unrealized securities
     losses arising during the
     period, net of taxes of $879                                                                            (1,272)      (1,285)
   Reclassification adjustment
     of net gains for securities
     sold, net of taxes of $937                                                                              (1,355)      (1,342)
                                                                                                            -------     --------
   Other comprehensive income
    (loss)                                                                                                   (2,627)      (2,627)
                                                                                                                        --------
Total comprehensive income
     (loss)                                                                                                                4,993

Cash dividends:
   Common ($0.10 per share)                                       (1,866)                                                 (1,866)

Common stock options exercised
   and related tax benefit            270,864       1       129              2,236                                         2,366

Purchases of treasury stock          (133,591)                              (2,057)                                       (2,057)

ESOP shares committed to
   be released                                               37                              32                               69

Deferred compensation obligation                                                           (286)      286                     --
                                   ---------- -------  --------  -------  --------      -------    ------               --------
Balance at March 31, 2003          18,638,853 $   199  $140,220  $34,402  $(15,598)     $(1,945)   $1,684   $   554     $159,516
                                   ========== =======  ========  =======  ========      =======    ======   =======     ========

</TABLE>

See notes to condensed consolidated financial statements.


                                       5
<PAGE>


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

                    FOR THE THREE MONTHS ENDED MARCH 31, 2002
                           (000'S, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                            ACCUMU-
                                                                                                              LATED
                                                                                                  DEFERRED    OTHER
                                      COMMON STOCK    ADDITIONAL                     COMMON STOCK  COMPEN-   COMPRE-          TOTAL
                                     SHARES      PAR     PAID-IN  RETAINED  TREASURY     HELD FOR   SATION   HENSIVE   STOCKHOLDERS'
                                     ------      ---     -------  --------  --------     --------   ------   -------   -------------
<S>                                 <C>        <C>      <C>       <C>      <C>           <C>        <C>           <C>    <C>
Balance at  January 1, 2003         18,379,346 $   195  $137,627  $ 8,457  $(13,381)     $(1,601)   $1,178   $ 2,725     $135,200

Net income                                                          6,009                                                   6,009

Other comprehensive income:
   Net unrealized securities
     losses arising during the
     period, net of taxes of $1,452                                                                           (2,044)      (2,044)
   Reclassification adjustment
     of net gains for securities
     sold net of taxes of $447                                                                                  (628)        (628)
                                                                                                             -------     --------
   Other comprehensive income
    (loss)                                                                                                    (2,672)      (2,672)
                                                                                                                         --------
Total comprehensive income
     (loss)                                                                                                                 3,337

Cash dividends:
   Common ($0.09 per share)                                        (1,661)                                                 (1,661)

Common stock options exercised          89,248       1       560                179                                           740

Purchases of treasury stock            (38,644)                                (543)                                         (543)

ESOP shares committed to
   be released                                                30                              32                               62

Deferred compensation obligation                                                            (188)      188                     --
                                    ---------- -------  --------  -------  --------      -------    ------
Balance at March 31, 2002           18,429,950 $   196  $138,217  $12,805  $(13,745)     $(1,757)   $1,366   $    53     $137,135
                                    ========== =======  ========  =======  ========      =======    ======   =======     ========

</TABLE>

See notes to condensed consolidated financial statements.


                                       6
<PAGE>


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

1.       PRINCIPLES OF CONSOLIDATION
         ---------------------------

         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") including its wholly-owned
         subsidiaries, Dutch Hill Realty Corp., U.S.B. Financial Services, Inc,
         and TPNZ Preferred Funding Corporation ("TPNZ"), as well as Union State
         Capital Trust I, Union State Statutory Trust II, USB Statutory Trust
         III, and Ad Con, Inc. All significant intercompany accounts and
         transactions are eliminated in consolidation.

2.       BASIS OF PRESENTATION
         ---------------------

         In the opinion of management, the accompanying unaudited condensed
         consolidated financial statements include all adjustments (comprised of
         only normal recurring accruals) necessary to present fairly the
         financial position of the Company as of March 31, 2003, and its
         operations, cash flows and changes in stockholders' equity for the
         three months ended March 31, 2003 and 2002. 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 2002 Annual
         Report to Stockholders.

         The condensed consolidated financial statements have been prepared in
         accordance with accounting principles generally accepted in the United
         States of America and predominant practices used within the banking
         industry. 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.

         Estimates that are particularly susceptible to significant change
         relate to the determination of the allowance for loan losses, provision
         for credit losses, and the valuation of other real estate acquired in
         connection with foreclosures or in satisfaction of loan receivables
         ("OREO"), when applicable. In connection with the determination of the
         allowance for loan losses, provision for credit losses, and OREO,
         management obtains independent appraisals for significant properties,
         which secure loans for OREO.

3.       RECLASSIFICATIONS
         -----------------

         Certain reclassifications have been made to prior period accounts to
         conform to the current period's presentation.

4.       RECENT ACCOUNTING PRONOUNCEMENTS
         --------------------------------

         GUARANTORS ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES,
         INCLUDING INDIRECT GUARANTEES OF INDEBTEDNESS OF OTHERS: In November
         2002, the Financial Accounting Standards Board ("FASB") issued
         Interpretation No. 45, "Guarantors Accounting and Disclosure
         Requirements for Guarantees Including Indirect Guarantees of
         Indebtedness of Others" ("FIN No. 45"). FIN No. 45 requires a guarantor
         to recognize, at the inception of the guarantee, a liability for the
         fair value of the obligation undertaken in issuing the guarantee. It
         also provides additional guidance on the disclosure of guarantees. The
         recognition measurement and disclosure provisions do not encompass
         commercial letters of credit and other loan commitments because those
         instruments do not guarantee payment of a money obligation and do not
         provide for payment in the event of default by the counterparty. The
         disclosure provisions of FIN No. 45 were effective December 15, 2002,
         while the recognition and measurement provisions were effective January
         1, 2003. The Company's adoption of FIN No. 45 did not have a
         significant impact on its condensed consolidated financial statements.


                                       7
<PAGE>

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

         CONSOLIDATION OF VARIABLE INTEREST ENTITIES: In January 2003, the FASB
         issued Interpretation No. 46, "Consolidation of Variable Interest
         Entities - an interpretation of ARB No. 51" ("FIN No. 46"). FIN No. 46
         provides guidance on the consolidation of certain entities in which
         equity investors do not have the characteristics of a controlling
         financial interest or do not have sufficient equity at risk for the
         entity to finance its activities without additional subordinated
         financial support. Such entities are referred to as Variable Interest
         Entities or "VIEs." FIN No. 46 requires the primary beneficiary of a
         VIE to consolidate the entity. FIN No. 46, as it relates to existing
         entities, is effective for fiscal periods beginning after June 15,
         2003. For new entities, FIN No. 46 is effective January 31, 2003. The
         Company's adoption of the provisions of this statement effective
         January 31, 2003 has not had, and adoption of the remaining provisions
         of FIN No. 46 effective June 15, 2003 is not expected to have, any
         impact on its condensed consolidated financial statements.

5.       ACCOUNTING FOR STOCK-BASED COMPENSATION
         ---------------------------------------

         SFAS No. 148, "Accounting for Stock Based Compensation - Transition and
         Procedure" (SFAS No. 148) amends SFAS 123 "Accounting for Stock-Based
         Compensation" ("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.

         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, 2002, included in the 2002 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, "Accounting for Stock Issued to
         Employees," and to provide pro forma disclosures of compensation
         expense measured by the fair value based method as defined 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 lease equal to the market value of the underlying common stock on
         the date of grant.


                                       8
<PAGE>

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

         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 months ended
         March 31, 2003 and 2002. The fair value of options was estimated at the
         date of grant using a Black-Scholes option-pricing model and is
         recognized over the options' vesting period.

                                                       THREE MONTHS ENDED
                                                             MARCH 31,
                                                          2003      2002
-------------------------------------------------------------------------------
                                                      (000'S, EXCEPT SHARE DATA)
                                                         $7,620    $6,009
Net income, as reported
Less: total stock-based compensation expense determined
under fair value based method for all awards, net of
related tax effects                                         302        90
-------------------------------------------------------------------------
Pro forma net income available to common stockholders    $7,318    $5,919
=========================================================================
Earnings per common share:
         Basic - as reported                             $ 0.41    $ 0.33
Basic - pro forma                                          0.39      0.32
         Diluted - as reported                           $ 0.40    $ 0.32
Diluted - pro forma                                        0.38      0.31
=========================================================================

         The following weighted average assumptions were used for Director Plan
         grants for the three months ended March 31, 2003 and 2002,
         respectively: dividend yields of 2.53 and 2.50 percent; volatility
         factors of the expected market price of the Company's common stock of
         41.70 and 42.35 percent; risk free interest rates of 2.79 and 4.99
         percent; and expected lives of 7.40 and 7.13 years. The following
         weighted average assumptions were used for Employee Plan grants for the
         three months ended March 31, 2003 and 2002, respectively: dividend
         yields of 2.53 and 2.50 percent; volatility factors of the expected
         market price of the Company's common stock of 41.70 and 42.35 percent;
         risk-free interest rates of 2.79 and 4.99 percent; and expective lives
         of 8.45 and 8.06 years.

6.       EARNINGS PER COMMON SHARE ("EPS")
         ---------------------------------

         The computation of basic and diluted earnings per common share for the
         three months ended March 31 is as follows:


                                       9
<PAGE>

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

                                                           THREE MONTHS ENDED
                                                                MARCH 31,
                                                           2003         2002
--------------------------------------------------------------------------------
                                                     (000's, except share data)
NUMERATOR:
  Net income for basic and diluted earnings per
      common share - net income available to
      common stockholders                              $     7,620   $     6,009
                                                       =========================
DENOMINATOR:
 Denominator for basic earnings per common share -
     weighted average shares                            18,595,539    18,351,870
 Effects of dilutive securities:
     Director and employee stock options                   419,383       516,495
                                                       -------------------------
  Total effects of dilutive securities                     419,383       516,495
                                                       -------------------------
  Denominator for diluted earnings per common share -
      adjusted weighted average shares                  19,014,922    18,868,365
                                                       =========================
Basic earnings per common share                        $      0.41   $      0.33
                                                       =========================
Diluted earnings per common share                      $      0.40   $      0.32
                                                       =========================

7.      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.

        The decision to sell available for sale securities 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
        comparable instruments. Securities acquired in connection with a
        non-qualified benefit plan, which are traded, are immaterial.

        During the three month periods ended March 31, 2003 and 2002, the
        Company had gross realized gains from sales of securities available for
        sale of $3,032,000 and $1,075,000, respectively.


                                       10
<PAGE>

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

        A summary of the amortized cost, estimated fair values, and related
        gross unrealized gains and losses of securities at March 31, 2003 and
        December 31, 2002 is as follows:


<TABLE>
<CAPTION>

                                                                GROSS         GROSS     ESTIMATED
                                              AMORTIZED    UNREALIZED    UNREALIZED          FAIR
                                                   COST         GAINS        LOSSES         VALUE
        MARCH 31, 2003:                       ---------------------------------------------------
        AVAILABLE FOR SALE:                                          (000'S)
        <S>                                    <C>           <C>           <C>           <C>
        U.S. government agencies               $234,795      $    223      $     --      $235,018
        Mortgage-backed securities              498,614         1,233           664       499,183
        Obligations of states and
            political subdivisions                1,500           104            --         1,604
        Corporate securities                        574            58            17           615
                                               --------      --------      --------      --------
        TOTAL SECURITIES AVAILABLE FOR SALE    $735,483      $  1,618      $    681      $736,420
                                               ========      ========      ========      ========

        HELD TO MATURITY:

        U.S. government agencies               $119,857      $  2,633      $     --      $122,490
        Mortgage-backed securities               27,127            52            --        27,179
        Obligations of states and
            political subdivisions               65,728         3,881             3        69,606
                                                             ----------------------      --------
        TOTAL SECURITIES HELD TO MATURITY      $212,712      $  6,566      $      3      $219,275
                                                             ======================      ========
</TABLE>



<TABLE>
<CAPTION>

                                                                GROSS         GROSS     ESTIMATED
                                              AMORTIZED    UNREALIZED    UNREALIZED          FAIR
                                                   COST          GAINS        LOSSES         VALUE
        DECEMBER 31, 2002:                    ----------------------------------------------------
        AVAILABLE FOR SALE:                                          (000'S)
        <S>                                    <C>           <C>           <C>           <C>
        U.S. government agencies               $269,849      $  1,283      $    482      $270,650
        Mortgage-backed securities              498,614         4,475             2       503,087
        Obligations of states and
            political subdivisions                1,500            98            --         1,598
        Corporate securities                        136            56            18           174
                                               --------      --------      --------      --------
        TOTAL SECURITIES AVAILABLE FOR SALE    $770,099      $  5,912      $    502      $775,509
                                               ========      ========      ========      ========

        HELD TO MATURITY:

        U.S. government agencies               $144,824      $  1,891      $     --      $146,715
        Mortgage-backed securities               62,005           306            --        62,311
        Obligations of states and
            political subdivisions               68,065         4,351            18        72,398
                                               --------      --------      --------      --------
        TOTAL SECURITIES HELD TO MATURITY      $274,894      $  6,548      $     18      $281,424
                                               ========      ========      ========      ========

</TABLE>


                                       11
<PAGE>
U.S.B. HOLDING CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
----------------------------------------------------------------

8.      LOANS
        -----

        Nonaccrual loans were $12.7 million at March 31, 2003 and $12.5 million
        at December 31, 2002. Restructured loans were $0.1 million and $0.2
        million at March 31, 2003 and December 31, 2002, respectively.

        Substantially all of the nonaccruing and restructured loans are
        collateralized by real estate. The Company has agreed to provide
        additional funding as further described below with respect to a real
        estate construction loan in the amount of $12.6 million. At March 31,
        2003, the Company had and continues to have no other commitments to lend
        additional funds to any customers with nonaccrual or restructured loan
        balances.

        At March 31, 2003, there are loans aggregating approximately $1.4
        million, which are not on nonaccrual status, that were potential problem
        loans which may result in their being placed on nonaccrual status in the
        future. Accruing loans that are contractually past due 90 days or more
        at March 31, 2003 are immaterial.

        At March 31, 2003 and December 31, 2002, the recorded investment in
        loans that are considered to be impaired under SFAS No. 114, "Accounting
        for Impairment of a Loan" ("SFAS No. 114"), approximated $12.8 million
        and $12.6 million, of which $12.7 million and $12.5 million were in
        nonaccrual status, respectively. The average recorded investment in
        impaired loans for the three months ended March 31, 2003 and 2002, and
        year ended December 31, 2002 was $12.8 million, $21.2 million and $18.3
        million, respectively. Interest income recognized by the Company on
        impaired loans for the March 31, 2003 and 2002 three month periods was
        not material. As applicable, each impaired loan has a related allowance
        for loan losses determined in accordance with SFAS No. 114. The total
        allowance for loan losses specifically allocated to impaired loans was
        $2.1 million at March 31, 2003, compared to $2.3 million and $2.2
        million at of March 31, 2002 and December 31, 2001, respectively.

        At December 31, 2001, the Bank had $0.3 million of outstanding loans,
        collateralized by cash and lease receivables, to Bennett Funding Group
        ("Bennett"), which filed for bankruptcy protection during the first
        quarter of 1996. During the quarter ended March 31, 2002, the Bank
        reached a settlement agreement with the Bankruptcy Trustee for the
        Bennett loan, which settled all claims against the Bankruptcy Estate and
        the Bank, including dismissal of the remaining fraudulent conveyance
        claims against the Bank. As a result, the Bank charged off the remaining
        $0.3 million of the Bennett loan, and in addition, made a settlement
        payment of $0.3 million to the Bankruptcy Estate.

        In November 2000, the Company reclassified a real estate construction
        loan in the amount of $19.7 million as a non-performing asset and placed
        the loan on nonaccrual status. At December 31, 2002, the recorded loan
        balance was $12.4 million, and the specific allocation of the allowance
        for loan losses was $2.2 million. Through an agreement with the
        borrower, additional financing was provided on the non-performing real
        estate construction loan to finalize construction of condominium units,
        which is substantially complete. The loan balance was reduced during
        2002 due to principal payments of $9.6 million and charge-offs of $1.4
        million, while additional financing of $3.9 million was provided for
        construction on the condominium units.


                                       12
<PAGE>

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

        At March 31, 2003, the recorded loan balance was $12.6 million with a
        $2.1 million specific allocation of the allowance for loan losses. As of
        March 31, 2003, of the original 83 units, 12 units remain to be sold. As
        of May 9, 2003, 8 units remain to be sold of which one unit is currently
        in contract, while the remaining units are being actively marketed for
        sale. Pending sales of the units and repayment of the loan, the Bank
        continues to proceed with foreclosure on other real estate that also
        collateralizes the loan and to pursue its claim against the borrower and
        guarantors for any deficiency.

9.      BORROWINGS AND STOCKHOLDERS' EQUITY
        -----------------------------------

        The Company utilizes borrowings primarily to meet the funding
        requirements for its asset growth and to manage its interest rate risk.
        Borrowings include securities sold under agreements to repurchase,
        federal funds purchased, and 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 up to $175.0
        million from two primary investment firms under master security sale and
        repurchase agreements. There were no outstanding borrowings under these
        agreements at March 31, 2003. In addition, the Bank has the ability to
        borrow from the FHLB under similar master security sale and repurchase
        agreements and, to a lesser extent, its customers. At March 31, 2003 and
        December 31, 2002, the Bank had short-term repurchase agreements
        outstanding of $1.6 million at an interest rate of 1.16 percent and $1.2
        million at an interest rate of 1.18 percent, respectively. At March 31,
        2003 and December 31, 2002, these borrowings were collateralized by
        securities with an aggregate carrying value and estimated fair value of
        $1.6 million and $1.2 million, respectively.

        Federal funds purchased represent overnight funds. The Bank has federal
        funds purchase lines available with six financial institutions for a
        total of $73.0 million. At March 31, 2003 and December 31, 2002, the
        Bank had no federal funds purchased balances outstanding.

        Short-term FHLB advances are borrowings with original maturities between
        one and 365 days. At March 31, 2003 and December 31, 2002, the Bank had
        no such short-term FHLB advances outstanding.

        Additional information with respect to short-term borrowings as of and
        for the three months ended March 31, 2003 and 2002 is presented in the
        table below.


<TABLE>
<CAPTION>
        SHORT-TERM BORROWINGS                               2003         2002
        --------------------------------------------------------------------------
                                                       (000's except percentages)
        <S>                                              <C>         <C>
        Balance at March 31                              $  1,571    $  1,107
        Average balance outstanding                      $ 13,755    $  1,343
        Weighted-average interest rate
             As of March 31                                  1.16%       1.77%
             Paid during period                              1.27%       1.63%
        ==========================================================================
</TABLE>


                                       13
<PAGE>

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

        The Bank had long-term borrowings, which have original maturities of
        over one year, of $507.0 million and $392.0 million in securities sold
        under agreements to repurchase at March 31, 2003 and December 31, 2002.
        At March 31, 2003 and December 31, 2002, these borrowings have an
        original term of between five and ten years at interest rates between
        1.07 percent to 6.08 percent and 1.94 percent to 6.08 percent,
        respectively, that are callable on certain dates after an initial
        noncall period at the option of the counterparty to the repurchase
        agreements. As of March 31, 2003 and December 31, 2002, these borrowings
        are collateralized by securities with an aggregate carrying value of
        $516.9 million and $400.6 million and an estimated fair value of $519.3
        million and $402.5 million, respectively.

        At March 31, 2003 and December 31, 2002, long-term FHLB advances totaled
        $110.0 million and $110.9 million, respectively, at interest rates of
        between 3.49 percent to 6.72 percent. At March 31, 2003, borrowings
        totaling $10.0 million are amortizing advances having scheduled payments
        and $30.0 million are payable only at maturity. 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. These borrowings may not be repaid
        in full prior to maturity without penalty. At March 31, 2003 and
        December 31, 2002, 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 $127.7 million and $128.6 million,
        respectively.

        A summary of long-term, fixed-rate borrowings distributed based upon
        remaining contractual payment date and expected option call date at
        March 31, 2003, with comparative totals for December 31, 2002, is as
        follows:



<TABLE>
<CAPTION>

                                                    AFTER 1
                                      WITHIN     BUT WITHIN       AFTER       2003         2002
LONG-TERM BORROWINGS                  1 YEAR        5 YEARS     5 YEARS       TOTAL       Total
-------------------------------------------------------------------------------------------------
Contractual Payment:                        (000's, except percentages)
<S>                                 <C>            <C>         <C>         <C>         <C>
Total long-term borrowing           $ 16,041       $132,182    $468,784    $617,007    $502,889
Weighted-average interest rate          4.21%          3.59%       4.38%       4.21%       4.68%
-------------------------------------------------------------------------------------------------
Expected Call Date:
Total long-term borrowing           $ 16,041       $172,182    $428,784    $617,007    $502,889
Weighted-average interest rate          4.21%          3.41%       4.53%      4.21%        4.68%
=================================================================================================
</TABLE>


        At March 31, 2003 and December 31, 2002 the Bank held 308,504 shares and
        251,445 shares of capital stock of the FHLB with a carrying value of
        $30.9 million and $25.1 million, respectively, which is required in
        order to borrow under the short- and long-term advance 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, 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. At
        March 31, 2003, the Bank could pay dividends of $45.7 million to the
        Company without having to obtain prior regulatory approval.


                                       14
<PAGE>

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

        On December 18, 2002, the Company's Board of Directors authorized the
        repurchase of up to 150,000 common shares, or approximately 0.8%, 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 2003 as, in the opinion of management,
        market conditions may warrant. The repurchased common shares are held as
        treasury stock and are available for general corporate purposes. For the
        three months ended March 31, 2003, the Company purchased 75,800 shares
        of common stock under the repurchase plan at an aggregate cost of
        approximately $1.2 million. Purchases of Company stock of 57,791 and
        38,644 shares were acquired in connection with stock option exercises
        during the three month period ended March 31, 2003 and 2002,
        respectively.

10.     COMMITMENTS AND CONTINGENCIES
        -----------------------------

        In the normal course of business, various commitments to extend credit
        are made which are not reflected in the accompanying condensed
        consolidated financial statements. At March 31, 2003, formal credit
        lines, and commercial and residential loan commitments (including home
        equity commitments), both of which are primarily loans collateralized by
        real estate, approximated $257.2 million, $194.7 million and $71.8
        million, respectively. Outstanding letters of credit totaled $31.8
        million. Such amounts represent the maximum risk of loss on these
        commitments.

        Other commitments are described in Note 16 to the consolidated financial
        statements of the Company for the year ended December 31, 2002, which is
        included in the Company's 2002 Annual Report to Stockholders.

        In the ordinary course of business, the Company is party to various
        legal proceedings arising in the ordinary course of business, including
        counter claims and related litigation in connection with loan
        collections and foreclosures of loan collateral. In the opinion of
        management, based on advice from legal counsel, such legal proceedings
        will not have a material adverse effect on the Company's consolidated
        financial position.

11.     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, Northern New Jersey and Southern
        Connecticut. For the three months ended March 31, 2003 and 2002, there
        is no customer that accounted for more than ten percent of the Company's
        revenue.

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

ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
----------------------------------------------------------
        CONDITION AND RESULTS OF OPERATION
        ----------------------------------

FORWARD-LOOKING STATEMENTS
--------------------------

The Company has made, and may continue to make, various forward-looking
statements with respect to earnings, credit quality and other financial and
business matters for periods subsequent to March 31, 2003. The Company cautions
that these forward-looking statements are subject to numerous assumptions, risks
and uncertainties, and that statements relating to subsequent periods
increasingly are subject to greater uncertainty because of the increased
likelihood of changes in underlying factors and assumptions. Actual results
could differ materially from forward-looking statements.


                                       15
<PAGE>

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

In addition to those factors previously disclosed by the Company and those
factors identified elsewhere herein, the following factors could cause actual
results to differ materially from such forward-looking statements: competitive
pressures on loan and deposit product pricing; other actions of competitors;
changes in economic conditions, including changes in interest rates and the
shape of the U.S. Treasury yield curve and the credit quality of borrowers;
wartime events or terrorist activity; the extent and timing of actions of the
Federal Reserve Board; customer deposit disintermediation; changes in customers'
acceptance of the Company's products and services; increase in Federal and state
income taxes and/or the Company's effective income tax rate; and the extent and
timing of legislative and regulatory actions and reform.

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.

CRITICAL ACCOUNTING POLICIES
----------------------------

The Company's accounting policies are disclosed in Note 3 to the consolidated
financial statements included in the Company's 2002 Annual Report to
Stockholders. The more critical policies given the Company's current business
strategy and asset/liability structure are accounting for non-performing loans,
the allowance for loan losses and provision for credit losses, and the
classification of securities as either held to maturity or available for sale.
In addition to Note 3 to the 2002 consolidated financial statements, the
Company's practice on each of these accounting policies is further described in
the applicable sections of Management's Discussion and Analysis of Financial
Condition and Results of Operations, also included in the 2002 Annual Report to
Stockholders.

FINANCIAL CONDITION
-------------------

At March 31, 2003, the Company had total assets of $2,456.9 million, a decrease
of $86.0 million or 3.4 percent from December 31, 2002.

The securities portfolio, including investments in Federal Home Loan Bank of New
York ("FHLB") stock, totaled $980.0 million and $1,075.5 million at March 31,
2003 and December 31, 2002, respectively, a decrease of $95.6 million during the
quarter ended March 31, 2003. The securities portfolio consists of securities
held to maturity at amortized cost of $212.7 million and $274.9 million,
securities available for sale at estimated fair value totaling $736.4 million
and $775.5 million, and FHLB stock of $30.9 million and $25.1 million at March
31, 2003 and December 31, 2002, respectively. The decrease in the securities
portfolio primarily reflects pre-investment of projected cash flow at December
31, 2002, and the resulting maturities and payments of securities during the
three months ended March 31, 2003.

During the three months ended March 31, 2003, U.S. government agency securities
decreased $60.6 million due primarily to sales of $84.9 million and redemptions
of $75.0 million of callable bonds, and a net decrease in the estimated fair
value of available for sale securities of $0.6 million, offset by purchases
totaling $99.9 million. Mortgage-backed securities decreased by $38.8 million
primarily due to principal paydowns of $78.9 million, net premium amortizations
of $0.2 million, sales of $73.0 million, and a decrease in the estimated fair
value of available for sale securities of $3.9 million, partially offset by
purchases of $117.3 million. The Bank's investment in obligations of states and
political subdivisions, or municipal securities, decreased by $2.3 million
primarily due to maturities of $3.2 million during the three month period ended
March 31, 2003, partially offset by purchases of $0.9 million. Municipal
securities are considered core investments having favorable tax equivalent
yields and diversified maturities. Purchases of municipal securities are
dependent upon their availability in the marketplace and the comparative tax
equivalent yields of such securities compared to other securities of similar
credit risk and maturity.


                                       16
<PAGE>

U.S.B. HOLDING CO., INC.
ITEM 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
-----------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS (CONT'D)
         --------------------------------------------

The Company invests in medium-term corporate debt securities and other
securities that are rated investment grade by nationally recognized credit
rating organizations at the time of purchase and bank and other equity
securities. The Company had outstanding balances in equity securities of $0.6
million and $0.2 million at March 31, 2003 and December 31, 2002, respectively.
The total investment in FHLB stock was $30.9 million and $25.1 million at March
31, 2003 and December 31, 2002, respectively.

The Company continues to exercise its conservative approach to investing by
primarily purchasing high credit quality investments and controlling interest
rate risk by purchasing both fixed and floating rate securities through the
averaging of investments in medium-term maturities.

At March 31, 2003, loans outstanding were $1,380.5 million, a net increase of
$30.1 million or 2.2 percent compared to December 31, 2002. The increase in
outstanding loan balances reflects increases of: $18.6 million in commercial
mortgages; $8.8 million in land, acquisition and construction loans; $2.7
million in time secured loans; $1.2 million in residential mortgages; and $1.2
million in time unsecured loans. The increase was partially offset by decreases
of $0.7 million in personal installment loans; $0.7 million in commercial
installment loans; $0.5 million in credit card loans; $0.3 million in home
equity loans; and $0.2 million in other loans. The Company had approximately
$257.2 million in formal credit lines, $266.5 million in loan commitments
outstanding, which are loans primarily collateralized by real estate, and $31.8
million of standby letters of credit outstanding. Management considers its
liquid resources to be adequate to fund loans in the foreseeable future,
principally by utilizing excess funds temporarily placed in federal funds sold,
increases in deposits and borrowings, loan repayments and maturing securities.

The Company's allowance for loan losses increased $0.3 million or 1.8 percent to
$14.4 million at March 31, 2003, from $14.2 million at December 31, 2002. The
allowance for loan losses represents 1.05 percent of gross loans outstanding at
both March 31, 2003 and December 31, 2002. The allowance reflects a provision of
$0.3 million and net charge-offs of $30,000 recorded for the first quarter 2003.
In addition to the allowance for loan losses, a reserve for credit losses
related to unfunded loan commitments of $545,000 at March 31, 2003 and $497,000
at December 31, 2002, is included in other liabilities.

Management believes the allowance for loan losses at March 31, 2003
appropriately reflects the risk elements inherent in the total loan portfolio at
that time. There is no assurance that the Company will not be required to make
future adjustments to the allowance in response to changing economic conditions
or regulatory examinations.

Total deposits increased $56.3 million for the three month period ended March
31, 2003 to $1,608.1 million from $1,551.8 at December 31, 2002. Time, money
market and NOW deposits increased $47.8 million, $26.8 million and $7.7 million,
respectively, partially offset by decreases in savings and demand deposits of
$19.5 million and $6.5 million, respectively. Retail and commercial time
deposits under $100,000 increased $10.9 million because of the Bank's efforts to
promote longer term maturities in this low interest rate environment. Time
deposits greater than $100,000 from local municipalities and retail and
commercial customers, which are obtained on a bidding basis with maturities of
30 to 180 days, also increased $25.7 million and $11.2 million, respectively,
during the three month period ended March 31, 2003. Depending on rate and term,
the Bank utilizes municipals and large time deposits as an alternative to
borrowed funds. Money market and NOW deposits increased due to the Bank
expanding its municipal relationships in efforts to attract low cost deposits.
Municipal money market and NOW deposits increased $27.1 million and $11.4
million, respectively. These increases were partially offset by decreases in
retail money market and NOW deposits of $0.3 million and $3.7 million,


                                       17
<PAGE>

U.S.B. HOLDING CO., INC.
ITEM 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
-----------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS (CONT'D)
         --------------------------------------------

respectively, due to normal volatility for the period. Savings deposits
decreased due to customers seeking higher yielding deposit products in the low
interest rate environment. A decrease in retail demand deposits of $15.6 million
also partially offset the increase in total deposits as the Bank experienced
increased competition from other financial institutions and normal volatility
for the period, partially offset by an increase in municipal demand deposits of
$9.1 million.

During the three months ended March 31, 2003, the Bank increased its net
borrowings $114.5 million. The low interest rate environment influenced the
Bank's strategy to secure low interest rates for an extended period of time.
Management will continue to evaluate the interest rate environment in order to
determine the most effective combination of borrowings and deposits.

The Bank continues its initiatives to expand its commercial and retail customer
base. On March 3, 2003, the Bank opened its 27th branch located in Goshen
(Orange County) New York. As of May 9, 2003, the Goshen branch has accumulated
approximately $38 million of retail and commercial deposits. The Bank is also in
the process of establishing a de novo branch location in Eastchester
(Westchester County), New York. The Eastchester branch is expected to open
during the second quarter 2003.

Stockholders' equity increased to $159.5 million at March 31, 2003 from the
December 31, 2002 balance of $156.0 million, an increase of 2.2 percent. The
increase primarily results from: $7.6 million of net income for the three month
period ended March 31, 2003; $2.4 million of stock options exercised and $0.1
million of shares committed to be released under benefit plans; partially offset
by treasury stock transactions of $2.1 million; a decrease in other
comprehensive income of $2.6 million, and common stock dividends paid of $1.9
million.

The Company's leverage ratio at March 31, 2003 was 8.22 percent, compared to
8.36 percent at December 31, 2002. The Company's Tier I and total capital ratios
under the risk-based capital guidelines were 13.17 percent and 14.15 percent at
March 31, 2003, and 12.55 percent and 13.58 percent at December 31, 2002,
respectively. In addition, the Bank exceeds all current regulatory capital
requirements and was in the "well-capitalized" category at March 31, 2003 and
December 31, 2002.

RESULTS OF OPERATIONS
---------------------
EARNINGS
--------

The Company's net income of $7.6 million for the three month period ended March
31, 2003 increased 26.8 percent as compared to $6.0 million for the comparable
2002 period. Basic and diluted earnings per common share were $0.41 and $0.40
for the three month period ended March 31, 2003, compared to $0.33 and $0.32 for
the three month period ended March 31, 2002, respectively. The increase in
diluted earnings per common share of 25.0 percent for the three month period
ended March 31, 2003, compared to the prior year period, reflects the higher net
income, partially offset by higher adjusted weighted average shares.

The Company's increase in net income was due to an increase in net interest
income, non-interest income and net security gains, and a lower provision for
credit losses due to improvement in the credit quality of the loan portfolio.
These increases were partially offset by higher non-interest expenses and a
higher effective rate for the provision for income taxes.

A discussion of the factors impacting the changes in the various components of
net income follows.


                                       18
<PAGE>

U.S.B. HOLDING CO., INC.
ITEM 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
-----------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS (CONT'D)
         --------------------------------------------

NET INTEREST INCOME
-------------------

Net interest income, the difference between interest income and interest
expense, is the most significant component of the Company's consolidated
earnings. For the three month period ended March 31, 2003, net interest income
increased 5.8 percent to $18.3 million from $17.3 million recorded for the three
months ended March 31, 2002. Net interest income increased in the current year
period primarily due to an increase in average earning assets primarily funded
by interest bearing liabilities, non-interest bearing deposits, and Trust
Preferred securities, partially offset by a decrease in the net interest margin.
For the three months ended March 31, 2003, average interest earning assets over
interest bearing liabilities and Trust Preferred securities increased 37.3
percent ($106.0 million) as compared to the three months ended March 31, 2002,
which also has a positive effect on net interest income.

Average interest earning assets increased 20.5 percent ($403.0 million) to
$2,366.4 million during the 2003 first quarter as compared to $1,963.3 million
for the prior year period. The increase was primarily due to increases in
average securities of $222.8 million and average loans of $173.7 million.
Interest bearing liabilities and Trust Preferred securities also increased 17.7
percent ($297.0 million) to $1,975.8 million for the three months ended March
31, 2003. The increase was due to increases in average borrowings of $168.3
million, average interest bearing deposits of $118.7 million and Trust Preferred
securities of $10.0 million.

The increase in net interest income related to volume was partially offset by
decreases in the net interest spread and margin on a tax equivalent basis to
3.03 percent and 3.18 percent for the three month period ended March 31, 2003 as
compared to 3.54 percent and 3.65 percent for the 2002 comparable period,
respectively. The decreases in the net interest margin and spread reflects more
significant decreases in yields on interest earning assets as compared to
interest bearing liabilities (including demand deposits), and Trust Preferred
securities ("interest bearing liabilities") for the three month period ended
March 31, 2003 as compared to the prior year period.

Yields on interest earning assets decreased to 5.31 percent for the 2003 first
quarter as compared to 6.22 percent for the prior year period. The decrease was
primarily due to decreases in yields on loans and investments to 6.13 percent
and 4.11 percent for the three months ended March 31, 2003 as compared to 6.65
percent and 5.47 percent for the comparable 2002 period. The decrease in the
yield on investments was primarily due to additional leverage strategies and the
reinvestment of maturities and proceeds of sales of available for sale
securities in the lower interest rate environment. Reinvestment included
purchases of $110.0 million of floating rate callable securities, which
increases the asset sensitivity of the investment portfolio and favorably
position the yields on the investment portfolio in a rising rate environment.

Yields on interest bearing liabilities decreased to 2.36 percent for the 2003
first quarter as compared to 2.80 percent for the prior year period. The
decrease was primarily due to decreases in yields on borrowings and interest
bearing deposits to 4.36 percent and 1.49 percent for the three months ended
March 31, 2003 as compared to 5.11 percent and 2.36 percent for the comparable
prior year period, respectively.

The Company continues a leverage strategy of purchasing government securities
funded by borrowings. Although the leverage strategy results in narrower net
interest spreads, the strategy increases net interest income without significant
credit risk or increase in operating expenses. The Company has also taken
advantage of opportunities during the first quarter of 2003 to restructure the
available for sale security portfolio. Net security gains of $3.0 million on
sales of available for sale securities of $158.0 million were realized for the
three months ended March 31, 2003. Sales of available for sale securities
included $85.0 million of callable securities, which would have been called
within a six month time frame, and $73.0 million of mortgage backed securities.
The proceeds were reinvested in other security investments (see discussion of
Financial Condition above).


                                       19
<PAGE>

U.S.B. HOLDING CO., INC.
ITEM 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
-----------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS (CONT'D)
         --------------------------------------------

The Company's balance sheet is asset sensitive during the short-term period (one
year and less). Management cannot predict future market conditions and the
related effect on its net interest rate spread and margin. However, due to the
balance sheet's asset sensitivity, a continuation of the historically low
short-term interest rate environment may cause the net interest spread and
margin to decrease.

PROVISION FOR CREDIT LOSSES
---------------------------

The provision for credit losses decreased $893,000 to $339,000 for the three
month period ended March 31, 2003, compared to the same period in 2002. The
decrease in the current period primarily reflects improvement of credit quality
in the loan portfolio and a decrease in net charge-offs to $30,000 for the three
months ended March 31, 2003 as compared to $609,000 for the 2002 prior year
period. Net charge-offs primarily relate to credit cards in 2003, and in 2002 a
commercial loan to Bennett Funding Group and credit cards. Nonaccrual loans,
which are primarily collateralized by real estate, were $12.7 million and $20.4
million, respectively, at March 31, 2003 and 2002, compared to $12.5 million at
December 31, 2002.

It is the Company's policy to discontinue the accrual of interest on loans when,
in the opinion of management, a reasonable doubt exists as to the timely
collectibility of the amounts due. Regulatory requirements generally prohibit
the accrual of interest on certain loans when principal or interest is due and
remains unpaid for 90 days or more (with the exception of credit card loans for
which the criteria is 180 days past due). Net income is adversely impacted by
the level of non-performing assets caused by the deterioration of borrowers'
ability to meet scheduled interest and principal payments. In addition to
forgone revenue, the Company must increase the level of provisions for credit
losses, incur collection costs, and other costs associated with the management
and disposition of foreclosed properties.

An evaluation of the quality of the loan portfolio is performed by management on
a quarterly basis as an integral part of the credit administration function,
which includes the identification of past due loans, non-performing loans,
impaired loans and potential problem loans, assessments of the expected effects
of the current economic environment, industry, geographic and customer
concentrations in the loan portfolio, and review of historical loan loss
experience. Management takes a prudent and cautious position in evaluating
various business and economic uncertainties in relation to the Company's loan
portfolio. In management's judgment, the allowance is considered appropriate to
absorb losses inherent in the credit portfolio.

A substantial portion (89.2 percent at March 31, 2003) of total gross loans of
the Company is collateralized by real estate, primarily located in the New York
Metropolitan area. Accordingly, the collectibility of the loan portfolio of the
Company is subject to changes in the real estate market in which the Company
operates. The provisions for credit losses established in 2003 and 2002 and the
related allowance for loan losses reflects net charge-offs and losses incurred
with respect to real estate, time and demand, installment, credit card and other
loans, and the effect of the real estate market and general economic conditions
of the New York Metropolitan area on the loan portfolio. There is no assurance
that the Company will not be required to make future adjustments to the
allowance in response to changing economic conditions or regulatory
examinations.

NON-INTEREST INCOME
-------------------

Non-interest income for the three months ended March 31, 2003 increased by
$2,152,000 (83.5 percent) to $4,729,000 as compared to the same period in 2002.
The increase for the three month period ended March 31, 2003 reflects higher net
securities gains of $1,957,000, prepayment penalty fees of $92,000, service
charges on deposit accounts of $111,000, and other fee income of $92,000. The
increase was partially offset by decreases in letter of credit fees of $128,000.


                                       20
<PAGE>

U.S.B. HOLDING CO., INC.
ITEM 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
-----------------------------------------------------------
         CONDITION AND RESULTS OF OPERATIONS (CONT'D)
         --------------------------------------------

NON-INTEREST EXPENSES
---------------------

Non-interest expenses increased $1,358,000 (14.3 percent) to $10,822,000 for the
three month period ended March 31, 2003 from the comparable period in 2002. The
primary reason for this increase results from higher levels of salaries and
benefits, business development expenses, occupancy and equipment expenses, and
other expenses necessary to expand and support increased business volume and
balance sheet growth.

Salaries and employee benefits, the largest component of non-interest expenses,
increased by $829,000, or 14.7 percent, during the three month period ended
March 31, 2003 compared to the prior year period. The increase occurred due to
additional personnel employed by the Company to accommodate the increases in
deposits and loans and their related services, merit increases, higher levels of
incentive compensation (certain of which are tied to increases in the net income
of the Company) and increases in medical benefits and payroll taxes.

Significant changes in the other components of non-interest expenses for the
three month period ended March 31, 2003 compared to March 31, 2002, were due to
the following:

        Increase of $135,000 (8.7%) in occupancy expense. The increase was
        primarily due to maintenance of branch locations, higher utility bills
        due to an increased number of Bank locations, and higher depreciation
        due to new branch locations.

        Increase of $141,000 (33.3%) in advertising and business development.
        The increase reflects an increase in marketing expense that includes
        television advertising to support increases in market share.

        Increase of $72,000 (27.1%) in professional fees. The increase is due to
        the increases in Director fees and legal costs related to a
        nonperforming real estate construction loan.

        Increase of $27,000 (9.5%) in communications expense. The increase
        relates to greater telephone usage as a result of increased employees,
        corporate office space and data lines usage, the opening of new branch
        locations and higher bandwidth to accommodate technological
        enhancements.

        Decrease of $25,000 (12.4%) in stationery and printing. The decrease
        reflects a decrease in office supplies and equipment due to document
        imaging and rebates from the Bank's check vendor.

        Increase of $150,000 (18.7%) in other expenses. The increase is
        primarily due to an increase in credit card operations and outside
        consulting fees.

INCOME TAXES
------------

The effective income tax rates for the three month periods ended March 31, 2003
and 2002 were 35.8 percent and 34.5 percent, respectively. The higher effective
income tax rate in 2003 reflects a lower proportion of tax exempt income
(principally from municipal bonds) in the current year period, partially offset
by a decrease in the statutory New York State income tax rate.


                                       21
<PAGE>


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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES  ABOUT MARKET RISK
------------------------------------------------  -----------------

Quantitative and qualitative disclosures about market risk at December 31, 2002
were reported in the Company's 2002 Annual Report to Stockholders. There have
been no material changes in the Company's market risk exposures at March 31,
2003 compared to December 31, 2002. Interest rate risk continues to be the
Company's primary market risk exposure since all Company transactions are
denominated in U.S. dollars with no direct foreign currency exchange or changes
in commodity price exposures. All market risk sensitive instruments continue to
be held to maturity or available for sale with no significant financial
instruments entered into for trading purposes. The Company does not use
derivative financial instruments such as interest rate swaps and caps
extensively and has not been party to any derivative financial instruments
during the three months ended March 31, 2003.

The Company continues to use two methods to evaluate its market risk to changes
in interest rates, a "Static Gap" evaluation and a simulation analysis of the
impact of changes in interest rates on the Company's net interest income and
cash flow. There have been no changes in the Company's policy limit of
acceptable variances to net interest income at March 31, 2003 as compared to
December 31, 2002. The Company's "Static Gap" at March 31, 2003 was a positive
cumulative $320.7 million in the one year time frame compared to a positive
cumulative $246.4 million at December 31, 2002. If interest rates were to
gradually increase 200 basis points or decrease 50 basis points (normally 200
basis points during periods of higher interest rates) from current rates, the
percentage change in estimated net interest income for the subsequent three
month measurement period continues to be within the Company's policy limit of
not declining by more than 5.0 percent.


                                       22
<PAGE>


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

ITEM 4. CONTROLS AND PROCEDURES
-------------------------------

The Company has evaluated the design and operation of its disclosure controls
and procedures to determine whether they are effective in ensuring that the
disclosure of required information is timely made in accordance with the
Securities Exchange Act of 1934 and the rules and forms of the Securities and
Exchange Commission. This evaluation was made under the supervision and with the
participation of management, including the Company's chief executive officer and
chief financial officer within the 90-day period prior to the filing of this
Quarterly Report on Form 10-Q. The chief executive officer and chief financial
officer have concluded, based on their review, that the Company's disclosure
controls and procedures, as defined by Exchange Act Rules 13a-14(c) and
15d-14(c), are effective to ensure that information required to be disclosed by
the Company in reports that it files under the Exchange Act is recorded,
processed, summarized, and reported within the time period specified in
Securities and Exchange Commission rules and forms. There were no significant
changes to the Company's internal controls or other factors that could
significantly affect these controls subsequent to the date of their evaluation.


                                       23
<PAGE>



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------------

(A)     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 Form 10-Q"), Exhibit (3)(a)).

        (3) (b)   Bylaws of Registrant (incorporated herein by reference
                  from 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
                  ("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 Form 10-Q, Exhibit (4) (g)).


                                       24
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K (CONT'D)
--------------------------------------------------

        (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 Form 10-Q, Exhibit (4) (h)).

        (4) (i)   Amended and Restated Declaration of Trust of USB Statutory
                  Trust III, (incorporated herein by reference to Registrant's
                  2002 Second Quarter Form 10-Q, Exhibit (4) (i)).

(10) (a)          Agreement of Employment dated as of November 16, 1998, and
                  as amended November 8, 2000, between the Company and the Bank
                  and Thomas E. Hales (incorporated herein by reference to
                  Registrant's Annual Report on Form 10-Q for the quarter ended
                  September 30, 2000 ("2000 Third Quarter 10-Q"), Exhibit
                  (10)(a)).

(10) (b)          Agreement of Employment dated as of November 16, 1998, and
                  as amended November 8, 2000, between the Company and the Bank
                  and Raymond J. Crotty (incorporated herein by reference to
                  Registrant's 2000 Third Quarter 10-Q, Exhibit (10)(b)).

(10) (c)          Amendment to Employment Agreement as of October 25, 2001
                  between the Company and the Bank and Raymond J. Crotty
                  (incorporated herein by reference to Registrant's 2001 Third
                  Quarter 10-Q, Exhibit (10)(c)).

(10) (d)          Agreement of Employment dated as of November 16, 1998, and
                  as amended November 8, 2000, between the Company and the Bank
                  and Steven T. Sabatini (incorporated herein by reference to
                  Registrant's 2000 Third Quarter 10-Q, Exhibit (10)(c)).

(10) (e)          Amendment to Employment Agreement as of October 25, 2001
                  between the Company and the Bank and Steven T. Sabatini
                  (incorporated herein by reference to Registrant's 2001 Third
                  Quarter 10-Q, Exhibit (10)(e)).

(10) (f)          Registrant's 1993 Incentive Stock Option Plan
                  (incorporated herein by reference from Registrant's Quarterly
                  Report on Form 10-Q for the quarter ended September 30, 1999
                  ("1999 Third Quarter 10-Q"), Exhibit (10)(e)).

(10) (g)          Registrant's U.S.B. Holding Co., Inc. Employee Stock
                  Ownership Plan (With Code Section 401(k) Provisions)
                  (incorporated herein by reference from Registrant's Annual
                  Report on Form 10-K for the year ended December 31, 2001
                  ("2001 10-K"), Exhibit (10)(g)).

(10) (h)          Registrant's Dividend Reinvestment and Stock Purchase Plan
                  (incorporated herein by reference from Registrant's Form S-3
                  Registration Statement (file No. 33-72788).

(10) (i)          Registrant's Director Stock Option Plan (incorporated
                  herein by reference to Registrant's 1996 10-K, Exhibit
                  (10)(f)).


                                       25
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K (CONT'D)
--------------------------------------------------

(10) (j)          Registrant's 1998 Director Stock Option Plan (incorporated
                  herein by reference to Registrant's Form S-8 Registration
                  Statement, filed June 5, 1998, Exhibit (10)(d)).

(10) (k)          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, Exhibit (10)(j)).

(10) (l)          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, Exhibit (10)(k)).

(10) (m)          Registrant's 1997 Employee Stock Option Plan (incorporated
                  herein by reference to Registrant's Proxy Statement filed
                  April 18, 1997).

(10) (n)          Tappan Zee Financial, Inc. 1996 Stock Option Plan for
                  Officers and Employees ("Employee Stock Option Plan")
                  (incorporated herein by reference to Exhibit B to Tappan Zee
                  Financial, Inc.'s Proxy Statement for use in connection with
                  its 1996 Annual Meeting of Shareholders ("Tappan Zee 1996
                  Proxy Statement")).

(10) (o)          Amendment No. 1 to the Employee Stock Option Plan
                  (incorporated herein by reference to Tappan Zee Financial,
                  Inc.'s Annual Report on Form 10-K for the fiscal year ended
                  March 31, 1997 ("Tappan Zee 1997 10-K"), Exhibit 10.1.1).

(10) (p)          Amendment No. 2 to the Employee Stock Option Plan
                  (incorporated herein by reference to Exhibit A to Tappan Zee
                  Financial, Inc.'s Proxy Statement for use in connection with
                  its 1997 Annual Meeting of Shareholders ("Tappan Zee 1997
                  Proxy Statement")).

(10) (q)          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 1997 Proxy Statement).

(10) (r)          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) (s)          Amendment No. 2 to the Outside Director Option Plan
                  (incorporated herein by reference to Exhibit B to the Tappan
                  Zee 1997 Proxy Statement).

(10) (t)          Loan Agreement to the Employee Stock Ownership Plan Trust
                  of Tappan Zee Financial, Inc. and Certain Affiliates
                  (incorporated herein by reference to the Tappan Zee Financial,
                  Inc.'s Annual Report on Form 10-K for the fiscal year ended
                  March 31, 1996, Exhibit 10.7).


                                       26
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K (CONT'D)
--------------------------------------------------

(10) (u)          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) (v)          Forms of Stock Option Agreement by and between Tappan Zee
                  Financial, Inc. and recipients of stock options granted
                  pursuant to the Employee Option Plan and the Outside Director
                  Option Plan (incorporated herein by reference to the Tappan
                  Zee 1997 10-K, Exhibit 10.16).

(10) (w)          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 Annual
                  Report on Form 10-K for the year ended December 31, 2001,
                  (Exhibit (10)(w)).

(10) (x)          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 six months ended June
                  30, 2000, Exhibit (10)(00)).

(10) (y)          U.S.B. Holding Co., Inc. Severance Plan dated January 30,
                  2002 (incorporated herein by reference from Registrant's 2001
                  10-K, Exhibit (10)(y)).

(10) (z)          Asset Purchase and Liability Assumptions 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 Form 10-Q, Exhibit (10)
                  (z)).

(10) (aa)         U.S.B. Holding Co., Inc. Executive Incentive Bonus Plan as
                  amended February 24, 1999 (incorporated herein by reference to
                  Registrant's Proxy Statement filed April 27, 1999).

        (99.1)    Certification of Chief Executive Officer and Chief Financial
                  Officer Pursuant to 18 U.S.C. Section 1350, As Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

        (11)      Computation of earnings per share.*

*Filed Herewith.

(B)     REPORTS ON FORM 8-K

        None.


                                       27
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on May 13, 2003.

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

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







                                       28
<PAGE>
                                  CERTIFICATION

        I, Thomas E. Hales, Chairman, President and Chief Executive Officer,
        certify that:

        1.        I have reviewed this Quarterly Report on Form 10-Q of U.S.B.
                  Holding Co., Inc. (the "Company").

        2.        Based on my knowledge, this Quarterly Report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

        3.        Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the
                  registrant as of, and for, the periods presented in this
                  quarterly report;

        4.        The registrant's other certifying officers and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

                  a)       designed such disclosure controls and procedures to
                           ensure that material information relating to the
                           registrant, including its consolidated subsidiaries,
                           is made known to us by others within those entities,
                           particularly during the period in which this
                           quarterly report is being prepared;

                  b)       evaluated the effectiveness of the registrant's
                           disclosure controls and procedures as of a date
                           within 90 days prior to the filing date of this
                           quarterly report (the "Evaluation Date"); and

                  c)       presented in this quarterly report our conclusions
                           about the effectiveness of the disclosure controls
                           and procedures based on our evaluation as of the
                           Evaluation Date;

        5.        The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the Audit Committee of the
                  registrant's Board of Directors (or persons performing the
                  equivalent function):

                  a)       all significant deficiencies in the design or
                           operation of internal controls which could adversely
                           affect the registrants ability to record, process,
                           summarize and report financial data and have
                           identified for the registrant's auditors any material
                           weaknesses in internal controls; and

                  b)       any fraud, whether or not material, that involves
                           management or other employees who have a significant
                           role in the registrant's internal controls; and

        6.        The registrant's other certifying officer and I have indicated
                  in this quarterly report whether or not there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.

Date: May 13, 2003                            /s/ Thomas E. Hales
      --------------------------------------------------------------------------
                                              Thomas E. Hales
                                              Chairman of the Board, President &
                                              Chief Executive Officer


                                       29
<PAGE>




                                  CERTIFICATION

        I, Steven T. Sabatini, Senior Executive Vice President and Chief
        Financial Officer, certify that:

        1.        I have reviewed this Quarterly Report on Form 10-Q of U.S.B.
                  Holding Co., Inc. (the "Company").

        2.        Based on my knowledge, this Quarterly Report does not contain
                  any untrue statement of a material fact or omit to state a
                  material fact necessary to make the statements made, in light
                  of the circumstances under which such statements were made,
                  not misleading with respect to the period covered by this
                  quarterly report;

        3.        Based on my knowledge, the financial statements, and other
                  financial information included in this quarterly report,
                  fairly present in all material respects the financial
                  condition, results of operations and cash flows of the
                  registrant as of, and for, the periods presented in this
                  quarterly report;

        4.        The registrant's other certifying officers and I are
                  responsible for establishing and maintaining disclosure
                  controls and procedures (as defined in Exchange Act Rules
                  13a-14 and 15d-14) for the registrant and we have:

                  a)       designed such disclosure controls and procedures to
                           ensure that material information relating to the
                           registrant, including its consolidated subsidiaries,
                           is made known to us by others within those entities,
                           particularly during the period in which this
                           quarterly report is being prepared;

                  b)       evaluated the effectiveness of the registrant's
                           disclosure controls and procedures as of a date
                           within 90 days prior to the filing date of this
                           quarterly report (the "Evaluation Date"); and

                  c)       presented in this quarterly report our conclusions
                           about the effectiveness of the disclosure controls
                           and procedures based on our evaluation as of the
                           Evaluation Date;

        5.        The registrant's other certifying officer and I have
                  disclosed, based on our most recent evaluation, to the
                  registrant's auditors and the Audit Committee of the
                  registrant's Board of Directors (or persons performing the
                  equivalent function):

                  a)       all significant deficiencies in the design or
                           operation of internal controls which could adversely
                           affect the registrants ability to record, process,
                           summarize and report financial data and have
                           identified for the registrant's auditors any material
                           weaknesses in internal controls; and

                  b)       any fraud, whether or not material, that involves
                           management or other employees who have a significant
                           role in the registrant's internal controls; and

        6.        The registrant's other certifying officer and I have indicated
                  in this quarterly report whether or not there were significant
                  changes in internal controls or in other factors that could
                  significantly affect internal controls subsequent to the date
                  of our most recent evaluation, including any corrective
                  actions with regard to significant deficiencies and material
                  weaknesses.

Date: May 13, 2003                             /s/ Steven T. Sabatini
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                                               Steven T. Sabatini
                                               Senior Executive Vice President &
                                               Chief Financial Officer


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