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 June 30, 2000 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

               CLASS                      OUTSTANDING AT AUGUST 4, 2000
               -----                      -----------------------------

      Common stock, par value                      16,672,043

         $0.01 per share

<PAGE>

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

                                TABLE OF CONTENTS

                                                                        PAGE NO.
                                                                        --------

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         CONDENSED CONSOLIDATED STATEMENTS OF
         CONDITION AS OF JUNE 30, 2000 (UNAUDITED)
         AND DECEMBER 31, 1999                                                 1

         CONDENSED CONSOLIDATED STATEMENTS OF
         INCOME FOR THE THREE MONTHS ENDED
         JUNE 30, 2000 AND 1999 (UNAUDITED)                                    2

         CONDENSED CONSOLIDATED STATEMENTS OF
         INCOME FOR THE SIX MONTHS ENDED JUNE 30,
         2000 AND 1999 (UNAUDITED)                                             3

         CONDENSED CONSOLIDATED STATEMENTS OF
         CASH FLOWS FOR THE SIX MONTHS ENDED
         JUNE 30, 2000 AND 1999 (UNAUDITED)                                    4

         CONDENSED CONSOLIDATED STATEMENTS OF
         CHANGES IN COMMON STOCKHOLDERS' EQUITY
         FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND
         1999 (UNAUDITED)                                                      6

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL
         STATEMENTS (UNAUDITED)                                                8

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        17

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES
         ABOUT MARKET RISK                                                    24

PART II. OTHER INFORMATION AND SIGNATURES

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
         HOLDERS                                                              25

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                     25


                                      - i -
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
U.S.B. HOLDING CO., INC.                                     (Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION                June 30,        December 31,
                                                                2000             1999
                                                             -----------      -----------
ASSETS                                                        (000's, except share data)
<S>                                                          <C>              <C>
Cash and due from banks                                      $    35,518      $    40,111
Federal funds sold                                                29,500           28,200
                                                             -----------      -----------
Cash and cash equivalents                                         65,018           68,311
Interest bearing deposits in other banks                             643              543
Securities:
    Available for sale (at estimated fair value)                 424,132          398,939
    Held to maturity (estimated fair value
       $192,274 in 2000 and $181,458 in 1999)                    197,610          187,411
Loans, net of allowance for loan losses of
    $11,458 in 2000 and $10,687 in 1999                        1,023,670          916,816
Premises and equipment, net                                       11,269           10,624
Accrued interest receivable                                       12,283           10,194
Other real estate owned (OREO)                                        34               34
Federal Home Loan Bank of New York stock                          34,139           34,139
Other assets                                                      21,179           19,360
                                                             -----------      -----------
TOTAL ASSETS                                                 $ 1,789,977      $ 1,646,371
                                                             ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits                                $   173,945      $   169,361
Interest bearing deposits:
    NOW accounts                                                  72,150           68,863
    Money market accounts                                         73,676           50,098
    Savings deposits                                             326,200          347,901
    Time deposits                                                749,166          505,526
                                                             -----------      -----------
Total deposits                                                 1,395,137        1,141,749
Accrued interest payable                                           6,701            6,166
Accrued expenses and other liabilities                             8,535            8,135
Securities sold under agreements to repurchase                   177,780          285,780
Federal Home Loan Bank of New York  advances                      78,713           87,995
                                                             -----------      -----------
Total                                                          1,666,866        1,529,825
Corporation-Obligated mandatory redeemable capital
     securities of subsidiary trust                               20,000           20,000
Minority interest-junior preferred stock of consolidated
     subsidiary                                                      134              135
Commitments and contingencies (Note 10)
Stockholders' equity:
    Common stock, $0.01 par value; authorized shares
    50,000,000; issued shares of 17,444,889 in 2000 and
    16,383,980 in 1999                                               174              164
    Additional paid-in capital                                   111,715           98,926
    Retained earnings                                             10,265           13,875
    Treasury stock at cost, 773,008 shares
       in 2000 and 499,707 shares in 1999                         (9,877)          (6,464)
    Common stock held for benefit plans                           (1,476)          (1,490)
    Deferred compensation obligation                                 818              748
    Accumulated other comprehensive loss                          (8,642)          (9,348)
                                                             -----------      -----------
Total stockholders' equity                                       102,977           96,411
                                                             -----------      -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $ 1,789,977      $ 1,646,371
                                                             ===========      ===========
</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
                                                                 June 30,         June 30,
                                                                   2000             1999
                                                                 --------         --------
                                                                (000's, except share data)
<S>                                                              <C>              <C>
INTEREST INCOME:
Interest and fees on loans                                       $ 21,732         $ 16,363
Interest on federal funds sold                                        474              344
Interest and dividends on securities:
         Mortgage-backed securities                                 6,487            6,012
         U.S. Treasury and government agencies                      3,557            1,793
         Obligations of states and political subdivisions             735              754
         Corporate and other                                            8               21
Interest on deposits in other banks                                     3               10
Dividends on Federal Home Loan Bank of New York stock                 572              363
                                                                 --------         --------
Total interest income                                              33,568           25,660
                                                                 --------         --------

INTEREST EXPENSE:
Interest on deposits                                               13,646            8,997
Interest on borrowings                                              4,317            3,469
Interest on Corporation - Obligated mandatory redeemable
         capital securities of subsidiary trust                       488              488
                                                                 --------         --------
Total interest expense                                             18,451           12,954
                                                                 --------         --------

NET INTEREST INCOME                                                15,117           12,706
Provision for loan losses                                             500              302
                                                                 --------         --------
Net interest income after provision for loan losses                14,617           12,404
                                                                 --------         --------

NON-INTEREST INCOME:
Service charges and fees                                              842              766
Other income                                                          334              306
(Losses) gains on securities transactions - net                      (105)             201
                                                                 --------         --------
Total non-interest income                                           1,071            1,273
                                                                 --------         --------

NON-INTEREST EXPENSE:
Salaries and employee benefits                                      4,697            4,275
Occupancy and equipment expense                                     1,444            1,340
Advertising and business development                                  559              463
Professional fees                                                     169              247
Communications                                                        259              187
Stationery and printing                                               159              146
FDIC insurance                                                         59               44
Other expenses                                                        624              601
                                                                 --------         --------
Total non-interest expense                                          7,970            7,303
                                                                 --------         --------
Income before income taxes                                          7,718            6,374
Provision for income taxes                                          2,685            2,391
                                                                 --------         --------
NET INCOME                                                       $  5,033         $  3,983
                                                                 ========         ========

BASIC EARNINGS PER COMMON SHARE                                  $   0.30         $   0.24
                                                                 ========         ========

DILUTED EARNINGS PER COMMON SHARE                                $   0.29         $   0.23
                                                                 ========         ========
</TABLE>

See notes to condensed consolidated financial statements.


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                    Six Months Ended
                                                                June 30,         June 30,
                                                                  2000             1999
                                                                --------         --------
                                                                (000's, except share data)
<S>                                                             <C>              <C>
INTEREST INCOME:
Interest and fees on loans                                      $ 41,647         $ 31,995
Interest on federal funds sold                                       819              728
Interest and dividends on securities:
     Mortgage-backed securities                                   12,966           11,244
     U.S. Treasury and government agencies                         6,816            2,709
     Obligations of states and political subdivisions              1,492            1,523
     Corporate and other                                              15               34
Interest on deposits in other banks                                    5               29
Dividends on Federal Home Loan Bank of New York stock              1,145              659
                                                                --------         --------
Total interest income                                             64,905           48,921
                                                                --------         --------

INTEREST EXPENSE:
Interest on deposits                                              24,725           17,491
Interest on borrowings                                             9,200            6,153
Interest on Corporation - Obligated mandatory redeemable
     capital securities of subsidiary trust                          976              976
                                                                --------         --------
Total interest expense                                            34,901           24,620
                                                                --------         --------

NET INTEREST INCOME                                               30,004           24,301
Provision for loan losses                                            950              910
                                                                --------         --------
Net interest income after provision for loan losses               29,054           23,391
                                                                --------         --------

NON-INTEREST INCOME:
Service charges and fees                                           1,739            1,551
Other income                                                         726              672
(Losses) gains on securities transactions - net                     (105)             527
                                                                --------         --------
Total non-interest income                                          2,360            2,750
                                                                --------         --------

NON-INTEREST EXPENSE:
Salaries and employee benefits                                     9,393            8,320
Occupancy and equipment expense                                    2,922            2,638
Advertising and business development                                 946              797
Professional fees                                                    439              444
Communications                                                       505              395
Stationery and printing                                              349              308
FDIC insurance                                                       119               94
Other expenses                                                     1,238            1,259
                                                                --------         --------
Total non-interest expense                                        15,911           14,255
                                                                --------         --------
Income before income taxes                                        15,503           11,886
Provision for income taxes                                         5,410            4,428
                                                                --------         --------
NET INCOME                                                      $ 10,093         $  7,458
                                                                ========         ========

BASIC EARNINGS PER COMMON SHARE                                 $   0.61         $   0.45
                                                                ========         ========

DILUTED EARNINGS PER COMMON SHARE                               $   0.59         $   0.43
                                                                ========         ========
</TABLE>

See notes to condensed consolidated financial statements.


                                       3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                  Six Months Ended
                                                                              June 30,          June 30,
                                                                                2000              1999
                                                                             ---------         ---------
OPERATING ACTIVITIES                                                                   (000's)
<S>                                                                          <C>               <C>
Net income                                                                   $  10,093         $   7,458
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Provision for loan losses                                                       950               910
   Depreciation and amortization                                                   995               967
   Amortization/accretion of premiums (discounts) on securities - net              484               780
   Noncash benefit plan expense                                                    134               148
   Deferred income taxes                                                          (406)             (600)
   Losses (gains) on securities transactions - net                                 105              (527)
 Origination of loans held for sale                                                 --              (481)
 Losses on sale of loans                                                            13                --
 Proceeds from sale of loans                                                       352                --
 Increase in accrued interest receivable                                        (2,089)           (1,928)
Other - net                                                                       (995)            1,325
                                                                             ---------         ---------
Net cash provided by operating activities                                        9,636             8,052
                                                                             ---------         ---------

INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale                            12,976            38,291
Proceeds from principal paydowns, redemptions and maturities of:
   Securities available for sale                                                17,250            69,537
   Securities held to maturity                                                   5,930             4,782
Purchases of securities available for sale                                     (54,752)         (149,736)
Purchases of securities held to maturity                                       (16,168)         (113,994)
Net (increase) decrease in interest bearing deposits in other banks               (100)            1,480
Loans originated, net of principal collections and charge-offs                (108,169)          (88,098)
Purchases of Federal Home Loan Bank of New York stock                               --            (7,893)
Purchases of premises and equipment - net                                       (1,634)             (597)
Proceeds from sales of OREO                                                         --               505
                                                                             ---------         ---------
Net cash used for investing activities                                        (144,667)         (245,723)
                                                                             ---------         ---------

FINANCING ACTIVITIES:
Net increase in non-interest bearing deposits,
   NOW, money market and savings accounts                                        9,748            53,355
Increase in time deposits, net of withdrawals and maturities                   243,640            51,826
Net (decrease) increase in securities sold under agreements
   to repurchase -  short-term                                                 (78,000)           73,000
Net decrease in Federal Home Loan Bank of New York
   advances - short-term                                                        (7,355)               --
Proceeds from securities sold under agreements to
   repurchase - long-term                                                           --            50,000
Repayment of securities sold under agreements to
   repurchase - long-term                                                      (30,000)               --
Repayment of Federal Home Loan Bank of New York
   advances - long-term                                                         (1,927)           (5,821)
Cash dividends paid                                                             (2,421)           (2,093)
(Redemption of) proceeds from sale of junior preferred stock of
   consolidated subsidiary                                                          (1)              137
Proceeds from issuance of common stock and tax benefit of
   exercised stock options                                                       1,467               934
Purchases of treasury stock                                                     (3,413)           (1,459)
                                                                             ---------         ---------
Net cash provided by financing activities                                      131,738           219,879
                                                                             ---------         ---------
</TABLE>

            -Continued-


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                          Six Months Ended
                                                                      June 30,         June 30,
                                                                        2000             1999
                                                                      --------         --------
                                                                               (000's)
<S>                                                                   <C>              <C>
Decrease  in Cash and Cash Equivalents                                $ (3,293)        $(17,792)
Cash and Cash Equivalents, Beginning of Period                          68,311           69,160
                                                                      --------         --------
Cash and Cash Equivalents, End of Period                              $ 65,018         $ 51,368
                                                                      ========         ========

Supplemental Disclosures:
   Interest paid                                                      $ 34,366         $ 24,397
                                                                      --------         --------
   Income tax payments                                                $  6,877         $  2,030
                                                                      --------         --------
   Transfer of loans to OREO - net                                    $     --         $    175
                                                                      --------         --------
   Transfer of loans held for sale to loans held to
       maturity at the lower of cost or fair value                    $     --         $  3,764
                                                                      --------         --------
   Change in shares held in trust for deferred compensation           $    (70)        $    (20)
                                                                      --------         --------
   Change in deferred compensation obligation                         $     70         $     20
                                                                      --------         --------
   Decrease (increase) in accumulated other comprehensive loss        $    706         $ (6,298)
                                                                      --------         --------
</TABLE>

See notes to condensed consolidated financial statements.


                                       5
<PAGE>

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

                     FOR THE SIX MONTHS ENDED JUNE 30, 2000
                           (000's, except share data)

<TABLE>
<CAPTION>

                                                     COMMON STOCK   Additional
                                                   Shares     Par      Paid-in     Retained     Treasury
                                              Outstanding   Value      Capital     Earnings        Stock
                                              -----------   -----   ----------     --------     --------
<S>                                            <C>          <C>      <C>         <C>          <C>
Balance at  January 1, 2000                    15,884,273   $ 164    $  98,926   $   13,875   $  (6,464)

Net income                                                                           10,093

Other comprehensive income:
   Net unrealized securities
     gain arising during the
     period, net of taxes of $469
   Reclassification adjustment for
     net losses included in net income,
     net of taxes of $39

Other comprehensive income
Total comprehensive income



Cash dividends:
   Common $0.15 per share                                                            (2,403)
   Junior preferred stock                                                               (11)

Five percent stock dividend                       819,975       8       11,274      (11,289)

Common stock options exercised
   and related tax benefit                        240,934       2        1,465

Purchases of treasury stock                      (273,301)                                       (3,413)

Amortization of RRP awards

ESOP shares committed to
   be released                                                              50

Deferred compensation obligation
                                               ----------   -----    ---------   ----------   ---------
Balance at June 30, 2000                       16,671,881   $ 174    $ 111,715   $   10,265   $  (9,877)
                                               ==========   =====    =========   ==========   =========

<CAPTION>
                                                                                  Accumulated
                                                Common Stock        Deferred            Other    Total Common
                                                    Held For    Compensation    Comprehensive   Stockholders'
                                               Benefit Plans      Obligation    Income (Loss)          Equity
                                               -------------    ------------    -------------   -------------
<S>                                                 <C>           <C>            <C>                 <C>
Balance at  January 1, 2000                         $ (1,490)     $      748     $    (9,348)        $ 96,411

Net income                                                                                             10,093

Other comprehensive income:
   Net unrealized securities
     gain arising during the
     period, net of taxes of $469                                                        652              652
   Reclassification adjustment for
     net losses included in net income,
     net of taxes of $39                                                                  54               54
                                                                                 -----------         --------
Other comprehensive income                                                               706              706
                                                                                                     --------
Total comprehensive income                                                                             10,799

Cash dividends:
   Common $0.15 per share                                                                              (2,403)
   Junior preferred stock                                                                                 (11)

Five percent stock dividend                                                                                (7)

Common stock options exercised
   and related tax benefit                                                                              1,467

Purchases of treasury stock                                                                            (3,413)

Amortization of RRP awards                                19                                               19

ESOP shares committed to
   be released                                            65                                              115

Deferred compensation obligation                         (70)             70                               --
                                                    --------      ----------     -----------         --------
Balance at June 30, 2000                            $ (1,476)     $      818     $    (8,642)        $102,977
                                                    ========      ==========     ===========         ========
</TABLE>

See notes to condensed consolidated financial statements


                                       6
<PAGE>

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

                     FOR THE SIX MONTHS ENDED JUNE 30, 1999
                           (000's, except share data)

<TABLE>
<CAPTION>

                                              COMMON STOCK        Additional
                                            Shares         Par       Paid-in       Retained    Treasury
                                       Outstanding       Value       Capital       Earnings       Stock
                                       -----------   ---------   -----------       --------    --------
<S>                                     <C>          <C>         <C>           <C>            <C>
Balance at  January 1, 1999             15,963,547   $     162   $    96,919   $      1,513   $ (2,223)

Net income                                                                            7,458

Other comprehensive loss:
   Net unrealized securities
     loss arising during the
     period, net of taxes of $4,167
   Reclassification adjustment
     for net gain included in
     net income, net of taxes
     of $210

   Other comprehensive loss

Total comprehensive income

Cash dividends:
   Common $0.12 per share                                                            (2,082)
   Junior preferred stock                                                               (11)

Common stock options exercised
   and related tax benefit                 160,753           1           933

Purchases of treasury stock               (102,479)                                             (1,459)

Amortization  of RRP awards

ESOP shares committed to
   be released                                                            39

Deferred compensation obligation
                                        ----------   ---------   -----------   ------------   --------
Balance at June 30, 1999                16,021,821   $     163   $    97,891   $      6,878   $ (3,682)
                                        ==========   =========   ===========   ============   ========

<CAPTION>
                                                                             Accumulated
                                            Common Stock       Deferred            Other    Total Common
                                                Held For   Compensation    Comprehensive   Stockholders'
                                           Benefit Plans     Obligation     Income (Loss)         Equity
                                           -------------   ------------    --------------  -------------
<S>                                        <C>               <C>            <C>                 <C>
Balance at  January 1, 1999                $     (1,628)     $      675     $      2,021        $ 97,439

Net income                                                                                         7,458

Other comprehensive loss:
   Net unrealized securities
     loss arising during the
     period, net of taxes of $4,167                                               (5,996)         (5,996)
   Reclassification adjustment
     for net gain included in
     net income, net of taxes
     of $210                                                                        (302)           (302)
                                                                            ------------        --------
   Other comprehensive loss                                                       (6,298)         (6,298)
                                                                                                --------
Total comprehensive income                                                                         1,160

Cash dividends:
   Common $0.12 per share                                                                         (2,082)
   Junior preferred stock                                                                            (11)

Common stock options exercised
   and related tax benefit                                                                           934

Purchases of treasury stock                                                                       (1,459)

Amortization  of RRP awards                          39                                               39

ESOP shares committed to
   be released                                       70                                              109

Deferred compensation obligation                    (20)             20                               --
                                           ------------      ----------     ------------        --------
Balance at June 30, 1999                   $     (1,539)     $      695     $     (4,277)       $ 96,129
                                           ============      ==========     ============        ========
</TABLE>

See notes to condensed consolidated financial statements.


                                       7
<PAGE>

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

1.    Principles of Consolidation

      The 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") (since April 30, 1999)], Tarrytowns Bank, FSB
      ("Tarrytowns") through April 30, 1999, the date of its merger with and
      into the Bank (including its wholly-owned subsidiary, TPNZ, through that
      date), Union State Capital Trust I and Ad Con, Inc. Intercompany accounts
      and transactions are eliminated in consolidation.

2.    Acquisition of La Jolla Bank Branches

      On May 25, 2000, the Bank and La Jolla Bank, La Jolla, California signed a
      definitive agreement pursuant to which the Bank will acquire the Stamford,
      Connecticut and Manhattan branches of La Jolla Bank ("La Jolla"). The two
      branches to be acquired have approximately $100 million in deposits that
      will be assumed by the Bank in the transaction. A premium of 6.8% will be
      paid by the Bank for the assumption of such deposits, and $150,000 will be
      paid for furniture and fixtures. The branch offices will be leased from a
      company owned by the principal stockholder of La Jolla. La Jolla will
      retain its loan portfolio and lending operations in the New York area.
      Upon completion of this transaction, the branches will become Bank
      branches. The parties anticipate that the transaction, which is subject to
      regulator approval, will be consummated in the latter part of 2000.

3.    Basis of Presentation

      In the opinion of management, the accompanying unaudited condensed
      consolidated financial statements include all adjustments (comprising of
      only normal recurring accruals) necessary to present fairly the financial
      position of the Company as of June 30, 2000 and December 31, 1999, and its
      operations, for the three and six months ended June 30, 2000 and 1999, and
      its cash flows and changes in common stockholders' equity for the six
      month periods ended June 30, 2000 and 1999. 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 1999 Annual Report to
      Stockholders.

      The 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.


                                       8
<PAGE>

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

      Estimates that are particularly susceptible to significant change relate
      to the determination of the allowance for loan losses and the valuation of
      other real estate acquired in connection with foreclosures or in
      satisfaction of loan receivables. In connection with the determination of
      the allowance for loan losses and OREO, management obtains independent
      appraisals for significant properties.

4.    Reclassifications

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

5.    Pending Accounting Pronouncements

      Revenue Recognition in Financial Statements In December 1999, the
      Securities and Exchange Commission ("SEC") issued Staff Accounting
      Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
      Statements." SAB 101 summarizes certain of the SEC's views in applying
      generally accepted accounting principles to revenue recognition in
      financial statements. On June 26, 2000, the SEC issued SAB 101B to defer
      the effective date of implementation of SAB 101 until no later than the
      fourth fiscal quarter of fiscal years beginning after December 31, 1999.
      The Company is required to adopt SAB 101 by December 31, 2000. The Company
      does not expect the adoption of SAB 101 to have a material impact on the
      consolidated financial statements.

      Accounting for Derivative Instruments and Hedging Activities

      In June 1998, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
      for Derivative Instruments and Hedging Activities," as amended in June
      1999 by SFAS No. 137, "Accounting for Derivative Instruments and Hedging
      Activities - Deferral of the Effective Date of FASB Statement No. 133" and
      SFAS No. 138 "Accounting for Derivative Instruments and Hedging
      Activities, an Amendment of FASB Statement No. 133 (collectively, "SFAS
      No. 133)". SFAS No. 133 establishes accounting and reporting standards for
      derivative instruments and hedging activities. It requires that all
      derivatives be recognized in the statement of condition, either as assets
      or as liabilities, and measured at fair value. This statement requires
      that changes in a derivative's fair value be recognized in current
      earnings unless specific hedge accounting criteria are met. Hedge
      accounting for qualifying hedges permits a derivative's gains and losses
      to offset the related results on the hedged item. An entity that elects to
      apply hedge accounting is required to establish at the inception of the
      hedge the method it will use for assessing the effectiveness of the
      hedging derivative and the measurement approach for determining the
      ineffective aspect of the hedge. Those methods must be consistent with the
      entity's approach to managing risk.

      For the Company, SFAS No. 133 is effective January 1, 2001. The Company
      does not anticipate that the statement will have a material impact on its
      consolidated financial position or results of operations.


                                       9
<PAGE>

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

6.    Earnings Per Common Share ("EPS")

      The Company computes EPS based upon the provisions of SFAS No. 128,
      "Earning per Share." SFAS No. 128 establishes standards for computing and
      presenting "Basic" and "Diluted" EPS. Basic EPS excludes dilution and is
      computed by dividing net income available to common stockholders (net
      income after preferred stock dividend requirements) by the
      weighted-average number of common shares outstanding for the period.
      Diluted EPS reflects the potential dilution that could occur if securities
      or other contracts to issue common stock were exercised or converted into
      common stock or resulted in the issuance of common stock that would then
      share in the earnings of the entity, reduced by common stock that could be
      repurchased by the Company with the assumed proceeds of such exercise or
      conversion. Diluted EPS is based on net income available to common
      stockholders divided by the weighted average number of common shares
      outstanding and common equivalent shares ("adjusted weighted average
      shares"). Stock options granted, but not yet exercised under the Company's
      stock option plans and restricted stock issued under the Company's
      recognition and retention stock plans but not yet vested, are considered
      common stock equivalents for Diluted EPS calculations.

      The computations of basic and diluted earnings per common share for the
      three and six months ended June 30 are as follows:

<TABLE>
<CAPTION>
                                                   Three Months Ended           Six Months Ended
                                                  June 30,     June 30,      June 30,      June 30,
                                                    2000         1999          2000          1999
                                                -----------   -----------   -----------   -----------
       Numerator:                                            (000's, except share data)
       <S>                                      <C>           <C>           <C>           <C>
         Net income                             $     5,033   $     3,983   $    10,093   $     7,458
         Less preferred stock dividends                  11            11            11            11
                                                -----------   -----------   -----------   -----------
         Net income for basic and diluted
            earnings per common share - net
            income available to common
            stockholders                        $     5,022   $     3,972   $    10,082   $     7,447
                                                ===========   ===========   ===========   ===========
       Denominator:
         Denominator for basic earnings
            per common share - weighted
            average shares                       16,516,349    16,734,977    16,543,393    16,708,757

         Effects of dilutive securities:
            Director and employee
               stock options                        559,669       699,727       610,312       709,061
            Restricted stock not vested               4,193        12,633         4,223        12,689
                                                -----------   -----------   -----------   -----------
         Total effects of dilutive securities       563,862       712,360       614,535       721,750
                                                -----------   -----------   -----------   -----------
         Denominator for diluted earnings
            per common share - adjusted
            weighted average shares              17,080,211    17,447,337    17,157,928    17,430,507
                                                ===========   ===========   ===========   ===========
       Basic earnings per common share          $      0.30   $      0.24   $      0.61   $      0.45
                                                ===========   ===========   ===========   ===========
       Diluted earnings per common share        $      0.29   $      0.23   $      0.59   $      0.43
                                                ===========   ===========   ===========   ===========
</TABLE>

Weighted average common shares outstanding and common per share amounts for the
three and six months ended June 30, 2000 and 1999 have been adjusted to reflect
the five percent stock dividend distributed May 15, 2000.


                                       10
<PAGE>

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

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 loss.

      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. The Company does not acquire securities for the purpose of
      engaging in trading activities.

      For both the three and six month periods ended June 30, 2000 and 1999,
      there were gross losses on sales of securities of $105,000 and $25,000,
      respectively. For the three and six month periods ended June 30, 1999,
      there were gross gains of $226,000 and $552,000, respectively.

      A summary of the amortized cost, estimated fair values, and related gross
      unrealized gains and losses on securities at June 30, 2000 and December
      31, 1999, is as follows:

<TABLE>
<CAPTION>
      =======================================================================================
                                                              Gross        Gross    Estimated
                                             Amortized   Unrealized   Unrealized         Fair
      June 30, 2000:                              Cost        Gains       Losses        Value
                                             ---------   ----------   ----------    ---------
      Available for Sale:                                          (000's)
      <S>                                     <C>          <C>          <C>          <C>
      U.S. government agencies                $101,443     $     87     $  3,721     $ 97,809
      Mortgage-backed securities               335,290          401       11,664      324,027
      Obligations of states and
          political subdivisions                 1,536           21           --        1,557
      Other                                        721           66           48          739
                                              --------     --------     --------     --------
      Total securities available for sale     $438,990     $    575     $ 15,433     $424,132
                                              ========     ========     ========     ========

      Held to Maturity:
      U.S. government agencies                $ 95,746     $     --     $  5,145     $ 90,601
      Mortgage-backed securities                44,385          220        1,021       43,584
      Obligations of states and
          political subdivisions                57,479          696           86       58,089
                                              --------     --------     --------     --------
      Total securities held to maturity       $197,610     $    916     $  6,252     $192,274
                                              ========     ========     ========     ========
</TABLE>


                                       11
<PAGE>

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

<TABLE>
<CAPTION>
                                                              Gross        Gross    Estimated
                                             Amortized   Unrealized   Unrealized         Fair
                                                  Cost        Gains       Losses        Value
      December 31, 1999:                     ---------   ----------   ----------    ---------
      Available for Sale:                                         (000's)
      <S>                                     <C>          <C>          <C>          <C>
      U.S. Treasury and
          government agencies                 $ 79,459     $     --     $  4,143     $ 75,316
      Mortgage-backed securities               333,202          331       12,299      321,234
      Obligations of states and
          political subdivisions                 1,539           21           --        1,560
      Corporate securities                          93           --           --           93
      Other                                        721           34           19          736
                                              --------     --------     --------     --------
      Total securities available for sale     $415,014     $    386     $ 16,461     $398,939
                                              ========     ========     ========     ========

      Held to Maturity:
      U.S. Treasury and
          government agencies                 $ 85,750     $     --     $  5,784     $ 79,966
      Mortgage-backed securities                44,543          244        1,262       43,525
      Obligations of states and
          political subdivisions                57,118          924           75       57,967
                                              --------     --------     --------     --------
      Total securities held to maturity       $187,411     $  1,168     $  7,121     $181,458
                                              ========     ========     ========     ========
</TABLE>

8.    Loans

      Nonaccrual loans were $1.6 million at June 30, 2000 and $2.6 million at
      December 31, 1999. Restructured loans were $0.2 million at June 30, 2000
      and $0.6 million at December 31, 1999.

      Substantially all of the nonaccruing and restructured loans are
      collateralized by real estate or lease receivables. At June 30, 2000, the
      Company has no commitments to lend additional funds to any customers with
      nonaccrual or restructured loan balances.

      At June 30, 2000, there are loans aggregating approximately $0.3 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.

      At June 30, 2000 and December 31, 1999, 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 $0.9 million and $2.1
      million, of which $0.7 million and $1.6 million at June 30, 2000 and
      December 31, 1999 were in nonaccrual status, respectively. Where
      warranted, each impaired loan has a related allowance for loan losses
      determined in accordance with SFAS No. 114. The total allowance for loan
      losses related to impaired loans was $0.2 million at both June 30, 2000
      and December 31, 1999. The average recorded investment in impaired loans
      for both the six months ended June 30, 2000 and year ended December 31,
      1999 was approximately $1.5 million. For the six months ended June 30,
      2000 and 1999, interest income recognized by the Company on impaired loans
      was not material.


                                       12
<PAGE>

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

      Restructured loans in the amounts of $0.2 million for both June 30, 2000
      and December 31, 1999, respectively, that are considered to be impaired
      due to a reduction in the contractual interest rate, are on accrual status
      because the collateral securing these loans is sufficient to protect the
      contractual principal and interest of the restructured loans. These loans
      have been performing for a reasonable period of time. Interest accrued on
      these loans and not yet collected as of June 30, 2000 is immaterial.

      At June 30, 2000, the Bank had $0.3 million of outstanding loans,
      collateralized by cash and lease receivables, to Bennett Funding Group
      ("Bennett") a lease finance company, which filed for bankruptcy protection
      during the first quarter of 1996. Collection of the Bank's loans continues
      to be delayed by the bankruptcy proceedings. However, as a result of a
      favorable ruling in the second quarter of 1998 by the Bankruptcy Court
      with jurisdiction over Bennett, the Bank has collected payments of $2.6
      million, reducing the original balance of $3.3 million to $0.7 million.
      The ruling by the Bankruptcy Court is subject to appeal by the Trustee. A
      total of $0.4 million was charged-off in 1999 and 1998, further reducing
      the recorded balance of the loans to $0.3 million at June 30, 2000. The
      Bennett loans are on nonaccrual status and a specific allocation is
      included in the allowance for loan losses, which includes an amount to
      provide for potential losses in the event the Trustee is successful in its
      appeal. In addition, the Trustee contends that the Bank received payments
      from Bennett under the theory of fraudulent conveyance. If the Trustee is
      successful, the Bank would be liable for loan payments aggregating $9.5
      million received from Bennett for the six year period preceding the
      bankruptcy filing date of March 1996. The Bankruptcy Court recently
      dismissed a significant portion of the Trustee's fraudulent conveyance
      claims. The Company believes, based on advice of legal counsel, that it
      will also prevail with regard to the remaining fraudulent conveyance
      claims.

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 $50.0 million (of
      which $9.8 million was long- term and outstanding at June 30, 2000) from
      two primary investment firms under master security sale and repurchase
      agreements. 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 June 30, 2000 and December 31, 1999, the
      Bank had $33.0 million at an interest rate of 6.57 percent and $111.0
      million at interest rates between 5.38 percent and 6.00 percent of such
      short-term borrowings outstanding, respectively. At June 30, 2000 and
      December 31, 1999, these borrowings were collateralized by securities with
      an aggregate amortized cost of $34.5 million and $117.5 million and
      estimated fair value of $33.7 million and $112.7 million, respectively.


                                       13
<PAGE>

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

      Federal funds purchased represent overnight funds. The Bank has federal
      funds purchase lines available with five financial institutions for a
      total of $46.0 million. At June 30, 2000 and December 31, 1999, the Bank
      had no federal funds purchased balances outstanding.

      Short-term FHLB advances are borrowings with original maturities between
      one and 365 days. At June 30, 2000 and December 31, 1999, the Bank had
      short-term FHLB advances of $59.0 million at an interest rate of 6.68
      percent and $66.4 million at interest rates ranging from 5.74 percent to
      5.92 percent, respectively. The Bank had collateralized these borrowings
      by pledging to the FHLB a security interest in certain mortgage-related
      assets having an aggregate book value of $81.1 million at June 30, 2000
      and $91.2 million at December 31, 1999.

      Additional information with respect to short-term borrowings as of and for
      the six months ended June 30, 2000 and 1999 is presented in the table
      below.

      --------------------------------------------------------------------------

      Short-Term Borrowings                      2000                 1999
      --------------------------------------------------------------------------
                                                 (000's except percentages)
      Balance at June 30                     $    92,000          $    74,000
      Average balance outstanding                142,492               18,685
      Weighted-average interest rate
           As of June 30                            6.64%                5.20%
           Paid during period                       5.96%                5.14%
      ==========================================================================

      The Bank had long-term borrowings, which have original maturities of over
      one year, of $144.8 million and $174.8 million in securities sold under
      agreements to repurchase as of June 30, 2000 and December 31, 1999,
      respectively. At June 30, 2000, these borrowings included $9.8 million
      having an original term of three years at an interest rate of 6.08
      percent, and $135.0 million having original terms of ten years at interest
      rates between 4.52 percent and 5.67 percent that are callable on certain
      dates after an initial noncall period at the option of the counterparty to
      the repurchase agreement. As of June 30, 2000 and December 31, 1999, these
      borrowings are collateralized by securities with an aggregate amortized
      cost of $161.6 million and $185.0 million, respectively, and estimated
      fair value of $153.8 million and $174.9 million, respectively.

      At June 30, 2000 and December 31, 1999, long-term FHLB advances totaled
      $19.7 million and $21.6 million, respectively. These borrowings are
      amortizing advances having scheduled payments and may not be repaid in
      full prior to maturity without penalty.

      A summary of long-term, fixed-rate debt distributed based upon remaining
      contractual payment date and expected option call date at June 30, 2000,
      with comparative totals for December 31, 1999, is as follows:


                                       14
<PAGE>

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

<TABLE>
<CAPTION>
      ------------------------------------------------------------------------------------------------------------------
                                                             After 1
                                              Within      But Within            After             2000             1999
      Long-Term Debt                          1 Year         5 Years          5 Years            Total            Total
      ------------------------------------------------------------------------------------------------------------------
      Contractual Payment Date:                                   (000's, except percentages)
      <S>                                 <C>             <C>              <C>              <C>              <C>
      Total long-term debt               $    13,573     $    14,084      $   136,836      $   164,493      $   196,420
      Weighted-average interest rate            5.97%           5.64%            5.29%            5.38%            5.33%
      ==================================================================================================================
      Expected Call Date:
      Total long-term debt               $    33,573     $   129,084      $     1,836      $   164,493      $   196,420
      Weighted-average interest rate            5.61%           5.31%            5.99%            5.38%            5.33%
      ==================================================================================================================
</TABLE>

      At June 30, 2000 and December 31, 1999, the Bank held 341,395 shares of
      capital stock of the FHLB with a carrying value of $34.1 million, 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 shares of FHLB stock. Any advances made from the
      FHLB are required to be collateralized by the FHLB stock purchased and
      certain other assets.

      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 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 June 30, 2000, the Bank could
      pay dividends of $27.1 million to the Company without having to obtain
      prior regulatory approval.

      On April 13, 2000, the Company's Board of Directors authorized a five
      percent common stock dividend, which was distributed on May 15, 2000 to
      stockholders of record as of May 1, 2000. The weighted average common
      shares outstanding and per common share amounts for the three and six
      months ended June 30, 2000 and 1999 have been adjusted to reflect the five
      percent stock dividend.

10.   Commitments and Contingencies

      In the normal course of business, various commitments to extend credit are
      made which are not reflected in the accompanying consolidated financial
      statements. At June 30, 2000, formal credit line and loan commitments,
      which are primarily loans collateralized by real estate and credit card
      lines, approximated $332.5 million and outstanding letters of credit
      totaled $23.2 million. Such amounts represent the maximum risk of loss on
      these commitments.

      In connection with the Bank's asset/liability program, the Bank may enter
      into derivative contracts to manage interest rate risk. In addition, the
      Bank, from time to time, enters into


                                       15
<PAGE>

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

      forward commitments to sell residential first mortgage loans to reduce
      market risk associated with originating and holding loans for sale. No
      such contracts were outstanding at June 30, 2000.

      Commitments regarding employment contracts are described in Note 16 to the
      consolidated financial statements of the Company for the year ended
      December 31, 1999, which is included in the Company's 1999 Annual Report
      on Form 10-K.

      In the ordinary course of business, the Company is party to various legal
      proceedings, none of which, in the opinion of management, based on advice
      from legal counsel, will have a material adverse effect on the Company's
      consolidated financial position or results of operations.

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 loans with retail 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.

      General information required by SFAS No. 131 is disclosed in the
      consolidated financial statements and accompanying notes. 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 six months
      ended June 30, 2000 and 1999, there is no customer that accounted for more
      than ten percent of the Company's revenue.


                                       16
<PAGE>

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

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

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 June 30, 2000. 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.

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; the extent and timing of actions of the
Federal Reserve Board and other regulatory agencies; customer deposit
disintermediation; changes in customers' acceptance of the Company's products
and services; increase in Federal and state income taxes; and the extent and
timing of legislative and regulatory actions and reform, including the recently
enacted Gramm-Leach Bliley act.

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.

FINANCIAL CONDITION

At June 30, 2000, the Company had total assets of $1,790.0 million, an increase
of $143.6 million or 8.7 percent from December 31, 1999.

The securities portfolio, including investments in Federal Home Loan Bank of New
York ("FHLB") stock, of $655.9 million and $620.5 million at June 30, 2000 and
December 31, 1999, respectively, consists of securities held to maturity at
amortized cost of $197.6 million and $187.4 million, securities available for
sale at estimated fair value totaling $424.1 million and $398.9 million at June
30, 2000 and December 31, 1999, respectively, and FHLB stock of $34.1 million at
both June 30, 2000 and December 31, 1999.

During the six months ended June 30, 2000, U.S. Treasury and government agency
obligations increased $32.5 million due primarily to purchases of $45.0 million
in callable bonds, sales of $13.0 million in U.S. Treasury notes, and a net
increase in the estimated fair value of available for sale securities of $0.5
million. Mortgage-backed securities increased by $2.6 million primarily due to
purchases totaling $19.8 million and a net increase in the estimated fair value
of available for sale securities of $0.7 million, partially offset by principal
paydowns of $17.4 million

 and net premium amortization of $0.5 million. Mortgage-backed
securities purchased are fixed-rate securities having expected weighted-average
lives of less than ten years at the time of purchase. The Bank's investment in
obligations of states and political subdivisions, or municipal securities,


                                       17
<PAGE>

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

ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (cont'd)

increased by $0.4 million principally due to purchases of $6.2 million that were
partially offset by maturities of $5.8 million during the six month period ended
June 30, 2000. Municipal securities are considered core investments which are
high yielding on a tax equivalent basis and have diversified maturities.
Purchases of municipal securities are dependent upon their availability in the
marketplace and the comparative tax equivalent yield of such securities to other
securities of comparable credit risk and maturity. The Company currently has
$0.7 million of holdings in equity securities. Equity investments of other
publicly traded financial institutions and medium- term corporate debt
securities which are rated investment grade by nationally recognized credit
rating organizations will continue to be evaluated for investment in the future.
The Company continues to exercise its conservative approach to investing by
making high quality investments and controlling interest rate risk by purchasing
both fixed and floating rate securities and through the averaging of investments
in medium-term maturities.

At June 30, 2000, loans outstanding were $1,035.1 million, a net increase of
$107.6 million or 11.6 percent over December 31, 1999. The primary increases of
outstanding loan balances were $42.7 million in commercial mortgages, $38.0
million in land, acquisition and construction loans, $16.6 million in
residential mortgages, $12.9 million in time unsecured loans, $6.8 million in
home equity mortgages, and $2.2 million in other loan categories, partially
offset by reductions in time secured loans of $8.9 million, commercial
installment loans of $1.8 million, credit cards of $0.7 million and other loan
categories of $0.2 million. The Company had approximately $332.5 million in
formal credit lines and loan commitments 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 $0.8 million or 7.2 percent to
$11.5 million at June 30, 2000, from $10.7 million at December 31, 1999. The
allowance for loan losses represents 1.11 percent of gross loans outstanding at
June 30, 2000, compared to 1.15 percent at December 31, 1999. The allowance
reflects a provision of $950,000 and net charge-offs of $179,000 recorded for
the six months ended June 30, 2000.

Management believes that allowance for loan losses at June 30, 2000
appropriately reflects the risk elements inherent in the total loan portfolio at
that time. In management's judgment, the allowance is considered adequate to
absorb losses inherent in 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. During
1999, the FDIC completed an examination of the Bank and the Federal Reserve
completed an off-site examination of the Company. The regulatory agencies
concluded that the process of internal asset review and the allowance for loan
losses were adequate.

Total deposits increased $253.4 million for the six month period ended June 30,
2000 to $1,395.1 million, which represents a 22.2 percent increase from December
31, 1999. Of this increase, $51.6 million were in retail and commercial accounts
and $201.8 million were in wholesale type accounts. Demand deposits increased
$4.6 million due primarily to the opening of a new branch


                                       18
<PAGE>

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

ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (cont'd)

and increased deposits from loan related customers. NOW deposits increased $3.3
million due to normal fluctuations in this transaction type account and an
increase in the number of accounts. Money market accounts increased $23.6
million due to the introduction of a more competitive higher rate money market
product. Savings deposits decreased $21.7 million, due to temporary deposits
placed in the Bank at December 31, 1999, increased rate competition for savings
deposits, as well as money transferred into higher yielding time deposits and
the new money market product. Retail time deposits less than $100,000 and IRA
and KEOGH time deposits increased $23.1 million and $6.5 million, respectively,
due to attractive yields offered to attract additional deposits. Brokered time
deposits of $34.8 million were acquired to help fund increased loan growth. Time
deposits greater than $100,000 from local municipalities, which are obtained on
a bidding basis with maturities of 30 to 180 days, and personal time deposits
over $100,000 increased $160.3 million and $18.9 million, respectively, during
the six month period ended June 30, 2000. Depending on rate and term, the Bank
utilizes municipal, brokered and large time deposits as an alternative to
borrowed funds.

During the three months ended June 30, 2000, the Company decreased the amount of
outstanding short and long-term advances with the Federal Home Loan Bank of New
York by $9.3 million and borrowings under securities sold under agreements to
repurchase by $108.0 million as the Bank replaced such funds, primarily with
municipal and brokered deposits.

Stockholders' equity increased to $103.0 million at June 30, 2000 from the
December 31, 1999 balance of $96.4 million. The increase primarily results from:
net income of $10.1 million for the six month period ended June 30, 2000; $1.5
million of stock options exercised and related tax benefit; other comprehensive
income of $0.7 million; and other equity transactions of $0.1 million; partially
offset by common stock dividends paid of $2.4 million and treasury stock
purchases of $3.4 million.

The Company's leverage ratio at June 30, 2000 was 7.50 percent, compared to 7.73
percent at December 31, 1999. The Company's Tier I and total capital ratios
under the risk-based capital guidelines were 11.61 percent and 12.62 percent at
June 30, 2000 and 12.49 percent and 13.56 percent at December 31, 1999,
respectively. In addition, the Bank exceeds all current regulatory capital
requirements and was in the "well-capitalized" category at June 30, 2000 and
December 31, 1999.

RESULTS OF OPERATIONS

Earnings

Net income for the three and six month periods ended June 30, 2000 was $5.0
million and $10.1 million compared to $4.0 million and $7.5 million for the
three and six month periods ended June 30, 1999, an increase of 26.4 percent and
35.3 percent, respectively. Diluted earnings per common share were $0.29 and
$0.59 for the three and six month periods ended June 30, 2000, compared to $0.23
and $0.43 for the three and six month periods ended June 30, 1999, respectively,
increases of 26.1 percent and 37.2 percent, respectively.


                                       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 increase in net income for the three and six month periods ended June 30,
2000, compared to the prior year periods, reflects higher net interest income,
higher non-interest income, and a lower effective income tax rate. These
increases to net income were partially offset by losses on security sales in the
current periods compared to gains in the prior year periods, higher provisions
for loan losses and higher non-interest expenses.

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

Net Interest Income

Net interest income, the difference between interest income and interest
expense, is a significant component of the Company's consolidated earnings. For
the three and six month periods ended June 30, 2000, net interest income
increased 19.0 percent and 23.5 percent to $15.1 million and $30.0 million, from
$12.7 million and $24.3 million recorded for the three and six month periods
ended June 30, 1999, respectively. The increase in net interest income is
primarily a result of an increase in average earning assets to $1.70 billion and
$1.66 billion for the three and six months ended June 30, 2000, compared to
$1.38 billion and $1.31 billion for the three and six months ended June 30,
1999, an increase of 22.9 percent and 26.6 percent, respectively. The increases
in average earning assets for the three and six month periods ended June 30,
2000 compared to the prior year periods results primarily from increased
investment in mortgage-backed securities and U.S. government agency securities,
and origination of residential and commercial mortgages and real estate secured
land acquisition and construction loans. Net interest income for the three and
six months ended June 30, 2000 also benefited from increases in average earning
assets over average interest bearing liabilities to $250.3 million and $247.7
million, from $216.7 million and $209.9 million in the prior year periods,
reflecting increases of 15.5 percent and 18.0 percent, respectively. The
increase in net interest income was partially offset by a decline in the net
interest margin on a tax equivalent basis which was 3.67 percent for the three
months ended June 30, 2000 and 3.72 percent for the six months ended June 30,
2000, compared to 3.81 percent for the three months ended June 30, 1999 and 3.84
percent for the six months ended June 30, 1999, due to compression in the net
interest spread as the Federal Reserve Board has raised interest rates six times
since June 30, 1999.

For the three and six month periods ended June 30, 2000, the net interest spread
(yield on earning assets less cost of funds, including demand deposits) was 3.42
percent and 3.47 percent, respectively, compared to 3.53 percent and 3.55
percent for the same periods in 1999, respectively. Yields on interest bearing
liabilities increased during the three and six month periods ended June 30, 2000
at a faster rate than the yields on interest earning assets during this period
of rising interest rates, as compared to the comparable 1999 periods. The
increase in asset yields is primarily a result of higher yields on
mortgage-backed and government agency securities purchased during the six months
ended June 30, 2000 and adjustments for floating rate securities, as well as
higher yields on loans due to the general increase in interest rates. The cost
of borrowings, which increased due to a rise in interest rates, together with
higher yields on interest bearing deposits that include brokered time deposits,
increased the overall yield on


                                       20
<PAGE>

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

ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (cont'd)

interest bearing liabilities for the three and six month periods ended June 30,
2000, compared to the prior period in 1999. The higher yields on interest
bearing liabilities and the Company's continuing leverage strategy of purchasing
government securities funded by borrowings both contributed to tighter spreads
resulting in the decline in the net interest spread. Although leverage
strategies result in decreasing net interest spreads, the strategies have the
effect of increasing net interest income while managing interest rate risk.

Provision for Loan Losses

The provision for loan losses increased $198,000 to $500,000 and $40,000 to
$950,000 for the three and six month periods ended June 30, 2000, respectively,
compared to the same periods in 1999. The increase in the provision for loan
losses reflects the significant increase in the loan portfolio. During the three
and six month periods ended June 30, 2000, net charge-offs totaled $139,000 and
$179,000, compared to net charge-offs of $65,000 and $166,000 for the three
month and six month periods ended June 30, 1999, respectively. The net
charge-offs in the three and six month periods ended June 30, 2000 primarily
relate to real estate and credit card loans, while the net charge-offs in both
1999 periods primarily relate to credit card loans. Nonaccrual loans were $1.6
million and $1.3 million, respectively, at June 30, 2000 and 1999, compared to
$2.6 million at December 31, 1999. 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. Net income is
adversely impacted by the level of non-performing assets of the Company since,
in addition to foregone revenue, the Company must increase the level of
provision for loan losses, and incur other costs associated with collections of
past due balances.

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 and
impaired loans, assessments of the expected effects of the current economic
environment and industry, geographic and customer concentrations in the loan
portfolio, and review of the 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 for loan losses at June 30, 2000 reflects the risk
elements inherent in the total loan portfolio and is considered adequate to
absorb losses inherent in the portfolio at that time. The amount of the
provision charged to income and changes in the allowance for loan losses
reflects the growth of the loan portfolio, net charge-offs and losses incurred
with respect to real estate foreclosures, time and demand loans, 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.


                                       21
<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 Income

Non-interest income for the three and six month periods ended June 30, 2000
decreased by $202,000 (15.9 percent) to $1,071,000 and decreased $390,000 (14.2
percent) to $2,360,000 compared to the same periods in 1999. The decrease for
the three and six month periods ended June 30, 2000 reflects losses on security
sales in the current periods of $105,000 compared to net gains in the prior year
periods of $201,000 and $527,000 for the three and six month periods ended June
30, 1999, respectively. The decrease was partially offset by higher service
charges and fees and other income of $104,000 and $242,000 for the three and six
months ended June 30, 2000, respectively, compared to the prior year periods.
Service charges and fees increased due to an increase in the number of deposit
accounts, restructuring of fees charged and management of waived charges. The
other income increase primarily reflects higher letter of credit fees, credit
card fee income, and U.S.B. Financial Services, Inc. commissions.

Non-Interest Expense

Non-interest expense increased $667,000 (9.1 percent) to $7,970,000 and
$1,656,000 (11.6 percent) to $15,911,000 for the three and six month periods
ended June 30, 2000 from the comparable periods in 1999, respectively. The
primary reason for these increases results from higher levels of salaries and
benefits, occupancy and equipment expense, advertising and business development
expense and communications expense necessary to expand and support increased
business volume and balance sheet growth, partially offset by estimated merger
related savings of approximately $100,000 and $300,000 for the three and six
months ended June 30, 2000, respectively, compared to the prior year periods,
resulting from the mergers of Tappan Zee in August 1998 and Tarrytowns Bank in
April 1999.

Salaries and employee benefits, the largest component of non-interest expense,
increased by $422,000, or 9.9 percent and $1,073,000 or 12.9 percent during the
three and six month periods ended June 30, 2000 compared to the prior year
periods. The increase occurred due to additional personnel employed by the
Company to accommodate the increases in deposits and loans and their related
services. In addition, salaries and employee benefits increased because of
additional expenses related to incentive compensation programs, and increases in
the cost of employee benefit programs such as retirement and stock plans,
medical coverage, and tuition reimbursement. Increases in salaries and employee
benefits expense was partially offset by estimated merger related savings of
$50,000 and $110,000 for the three and six months ended June 30, 2000,
respectively.

Significant changes in the other components of non-interest expense for the
three and six month periods ended June 30, 2000 compared to the prior periods,
were due to the following:

o     Increase of $104,000 (7.8 percent) and $284,000 (10.8 percent) in
      occupancy and equipment expense. This increase is primarily due to the
      opening of a new branch office in May 2000, higher equipment maintenance
      and utility expenses relating to the Company's facilities and computer
      related equipment, and increased rental and depreciation expense related
      to additional space for corporate and administrative offices.


                                       22
<PAGE>

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

ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (cont'd)

o     Increase of $96,000 (20.7 percent) and $149,000 (18.7 percent) in
      advertising and business development. The increase reflects additional
      emphasis on business development efforts, as well as marketing the Bank's
      products and focus on the Bank's ad campaign, "Do business with us, do
      better with us."

o     Decrease of $78,000 (31.6 percent) and $5,000 (1.1 percent) in
      professional fees. The decrease relates to lower auditing and legal fees
      primarily due to estimated merger related savings of $50,000 and $100,000
      for the three and six months ended June 30, 2000, partially offset by
      increases due to higher levels of business volume.

o     Increase of $72,000 (38.5 percent) and $110,000 (27.8 percent) in
      communications expense. The increase relates to greater telephone usage as
      a result of increased employees, office space and data lines usage.

o     Increase of $13,000 (8.9 percent) and $41,000 (13.3 percent) in stationery
      and printing. The increase reflects an increase in office supplies and
      equipment necessary to support the continuing growth of the Bank's
      business volume.

o     Increase of $15,000 (34.1 percent) and $25,000 (26.6 percent) in FDIC
      insurance. The increase is related to the higher level of total deposits
      during the first half of 2000 compared to the prior year periods.

o     Increase of $23,000 (3.8 percent) and decrease of $21,000 (1.7 percent) in
      other expenses. The increase for the three month period is primarily due
      to higher courier fees and a gain on the sale of foreclosed property in
      the 1999 quarter, partially offset by the allocation of costs related to
      loan fees. The decrease for the six month period is primarily due to
      estimated merger related savings of $80,000 and allocation of costs
      related to loan fees, partially offset by a higher level of other outside
      services to support higher levels of business.

Income Taxes

The effective income tax rates for the three and six month periods ended June
30, 2000 were 34.8 percent and 34.9 percent, respectively, compared to 37.5
percent and 37.3 percent, respectively, for the prior periods in 1999. The lower
effective tax rate for the three and six month periods ended June 30, 2000
primarily reflects lower state income taxes.


                                       23
<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, 1999
were reported in the Company's 1999 Annual Report on Form 10-K. There have been
no material changes in the Company's market risk exposures at June 30, 2000
compared to December 31, 1999. 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 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 entered into any
derivative financial instruments during the six months ended June 30, 2000.

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 June 30, 2000 as compared to
December 31, 1999. The Company's "Static Gap" at June 30, 2000 was a negative
$397.8 million in the one year time frame compared to a negative $302.1 million
at December 31, 1999. If interest rates were to gradually ramp up or down 200
basis points from current rates, the percentage change in estimated net interest
income for the subsequent 12 month measurement period continues to be within
the Company's policy limit of not declining by more than 5.0 percent.


                                       24
<PAGE>

                           PART II - OTHER INFORMATION

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of Shareholders of the Company was held on May 26, 2000 for
the purpose of considering and voting upon the following matters:

I.    Election of three directors, Messrs. Thomas E. Hales, Raymond J. Crotty,
      and Michael H. Fury, constituting Class III members of the Board of
      Directors, to a three-year term of office.

The results of votes for each of the items above were as follows:

                                                    ITEM I
                                -----------------------------------------------
                                T. E. Hales      R. J. Crotty        M. H. Fury
                                -----------      ------------        ----------
Votes:
      For                        14,111,949        14,112,296        14,116,756
      Against or Withheld            76,031            75,684            71,224
      Abstentions                        --                --                --

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) Exhibits

Exhibit No.     Exhibit
-----------     -------

(3) (a)         Amended and 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, 1998, 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)).


                                       25
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (cont'd)

(A) Exhibits (cont'd)

Exhibit No.     Exhibit
-----------     -------

(10) (a)        Agreement of Employment dated as of November 16, 1998 between
                the Company and the Bank and Thomas E. Hales (incorporated
                herein by reference to Registrant's Annual Report on Form 10-K
                for the year ended December 31, 1998 ("1998 10-K") Exhibit
                (10)(a)).

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

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

(10) (d)        Registrant's 1984 Incentive Stock Option Plan (incorporated
                herein by reference from Form S-8 Registration Statement (file
                No. 2-90674), Exhibit 28 (b)).

(10) (e)        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) (f)        Registrant's 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, 1993, Exhibit (10)(d )).

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

(10) (i)        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) (j)        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).

(10) (k)        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).

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


                                       26
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (cont'd)

(A) Exhibits (cont'd)

Exhibit No.     Exhibit
-----------     -------

(10) (m)        Agreement and Plan of Merger, dated as of March 6, 1998, between
                U.S.B. Holding Co., Inc. and Tappan Zee Financial, Inc.
                (incorporated herein by reference to Registrant's Current Report
                on Form 8-K dated as of March 6, 1998).

(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)        Tappan Zee Financial, Inc. 1996 Recognition and Retention Plan
                for Officers and Employees ("Employee RRP") (incorporated herein
                by reference to Exhibit B to the Tappan Zee 1996 Proxy
                Statement).

(10) (u)        Amendment No. 1 to the Employee RRP (incorporated herein by
                reference to the Tappan Zee 1997 10-K, Exhibit 10.3.1 ).

(10) (v)        Amendment No. 2 to the Employee RRP (incorporated herein by
                reference to Exhibit C to the Tappan Zee 1997 Proxy Statement).

(10) (w)        Tappan Zee Financial, Inc. 1996 Recognition and Retention Plan
                for Outside Directors ("Outside Director RRP") (incorporated
                herein by reference to Exhibit D to the Tappan Zee 1997 Proxy
                Statement).

(10) (x)        Amendment No. 1 to the Outside Director RRP (incorporated herein
                by reference to the Tappan Zee 1997 10-K, Exhibit 10.4.1).


                                       27
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (cont'd)

(A)   Exhibits (cont'd)

Exhibit No.     Exhibit
-----------     -------

(10) (y)        Amendment No. 2 to the Outside Director RRP (incorporated herein
                by reference to Exhibit D to the Tappan Zee 1997 Proxy
                Statement).

(10) (z)        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
                ("Tappan Zee 1996 10-K"), Exhibit 10.7).

(10) (aa)       Deferred Compensation Plan for Directors of Tarrytowns Bank, FSB
                (Incorporated herein by reference to the Registration Statement
                on Form S-1 filed No. 33-94128), filed on June 30, 1995, as
                amended ("Tappan Zee Registration Statement"), Exhibit 10.7).

(10) (bb)       Consulting Agreement by and between Tarrytowns Bank, FSB and
                Stephen C. Byelick, dated effective as of August 31, 1998
                (incorporated herein by reference to the Registrant's Quarterly
                Report on Form 10-Q for the quarter ended September 30, 1998
                Third Quarter 1998 10-Q"), Exhibit (10)(dd)).

(10) (cc)       Employment Agreement by and between Tarrytowns Bank, FSB and
                Harry G. Murphy, dated effective as of August 31, 1998
                (incorporated herein by reference to the 1998 Third Quarter
                10-Q, Exhibit (10)(cc)).

(10) (dd)       Employee Retention Agreement by and among Tappan Zee Financial,
                Inc. Tarrytowns Bank, FSB and Christina Vidal, effective as of
                October 5, 1995 (incorporated herein by reference to the Tappan
                Zee 1996 10-K, Exhibit 10.15).

(10) (ee)       Employee Retention Agreement by and among Tappan Zee Financial,
                Inc., Tarrytowns Bank, FSB and James D. Haralambie, effective as
                of June 23, 1997 (incorporated herein by reference to
                Registrant's 1998 10-K, Exhibit (10)(17)).

(10) (ff)       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) (gg)       Forms of Restricted Stock Award Notices to award recipients,
                pursuant to the Employee RRP and the Outside Director RRP
                (incorporated herein by reference to the Tappan Zee 1997 10-K,
                Exhibit 10.17).

(10) (hh)       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 (incorporated herein by reference to the
                Registrant's Quarterly Report on Form 10-Q for the quarter ended
                June 30, 1999, Exhibit (10)(ll)).


                                       28
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (cont'd)

(A)   Exhibits (cont'd)

Exhibit No.     Exhibit
-----------     -------

(10) (ii)       Amendment Number 1 to Registrant's Employee Stock Ownership Plan
                (with Code Section 401(k) Provisions) dated January 27, 1995
                (incorporated herein by reference to the Registrant's Annual
                Report on Form 10-K for the year ended December 31, 1999 ("1999
                10-K"), Exhibit (10)(jj)).

(10) (jj)       Amendment Number 2 to Registrant's Employee Stock Ownership Plan
                (with Code Section 401(k) Provisions) dated May 17, 1995
                (incorporated herein by reference to the Registrant's 1999 10-K,
                Exhibit (10)(kk)).

(10) (kk)       Amendment Number 3 to Registrant's Employee Stock Ownership Plan
                (with Code Section 401(k) Provisions) dated January 1, 1996
                (incorporated herein by reference to the Registrant's 1999 10-K,
                Exhibit (10)(ll)).

(10) (ll)       Amendment Number 4 to Registrant's Employee Stock Ownership Plan
                (with Code Section 401(k) Provisions) dated November 20, 1996
                (incorporated herein by reference to the Registrant's 1999 10-K,
                Exhibit (10)(mm)).

(10) (mm)       Amendment Number 5 to Registrant's Employee Stock Ownership Plan
                (with Code Section 401(k) Provisions) effective as of September
                30, 1999 (incorporated herein by reference to the Registrant's
                1999 10-K, Exhibit (10)(nn)).

(10) (nn)       Amendment Number 6 to Registrant's Employee Stock Ownership Plan
                (with Code Section 401(k) Provisions) dated August 24, 1999
                (incorporated herein by reference to the Registrant's 1999 10-K,
                Exhibit (10)(oo)).

(10) (oo)       Asset Purchase and Account Assumption Agreement by and between
                Union State Bank and La Jolla Bank dated May 25, 2000.*

(11)            Computation of earnings per share.*

(27)            Financial Data Schedule.*

*Filed Herewith.

(B)   Reports on Form 8-K

      The Company filed a report on Form 8-K on June 2, 2000 regarding a
      definitive agreement between the Bank and La Jolla Bank pursuant to which
      the Bank will acquire two La Jolla Bank branches.


                                       29
<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 August 10, 2000.

                            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 and
                                              Assistant Secretary
                                              (Principal Financial and
                                              Accounting Officer)


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