Press Release


UNITED-AMERICAN SAVINGS BANK
ANNOUNCES EARNINGS

November 15, 2010

Pittsburgh, PA


Tom P. Smith, President and Chief Executive Officer of United-American Savings Bank (OTCBB: UASB), today announced that the Bank recorded net income for the three months ended September, 30, 2010 of $134,000 ($.38 per basic and diluted share), compared to $41,000 for the same period in 2009. This is the first quarterly announcement since the Bank’s initial public offering which closed August 5, 2010. The calculation of earnings per share is calculated on the weighted-outstanding shares during the three month period. Had all shares been outstanding during the entire period, earnings per share would have been $.45 per basic and diluted share. The Bank recorded one-time credits to provisions for both state and federal income taxes during the period of $48,000 to record the benefit of loss carry-forwards from prior years. On a pre-tax basis income was $161,000 for the three months compared to $55,000 for the same period in 2009. The annualized return on assets for the quarter was .84% and the annualized return on equity was 10.69% compared to .28% and 5.16% for the same period in 2009. Excluding the one time credits, the annualized return on assets for the third quarter of 2010 would have been .54% and return on equity would have been 6.85%.

Net interest income for the quarter ended September 30, 2010 increased $129,000 to $538,000 compared to $409,000 for the same period in 2009. Yields on average earning assets for the period on a fully tax-equivalent basis declined to 5.48% from 5.89% for the third quarter of 2009. The yield on average loans declined slightly to 6.32% compared to 6.42% in 2009, while the yields on investments available for sale declined substantially to 3.36% from 4.83% in 2009 as a result of lower market rates. The decline in asset yields was more than offset by a significant decline in the total cost of interest-bearing liabilities to 2.08% in 2010 compared to 3.17% in 2009. The net result of these changes was an increase in net interest income as a percent of average earnings assets to 3.58% in the third quarter of 2010 compared to 2.91% in 2009.

Non-interest income increased $23,000 for the quarter to $54,000 from $31,000 in the prior year. The largest component was an increase in gains on sale on loans sold in the secondary market to $35,000 from $7,000 in the prior year. Non-interest expense increased by $71,000 for the quarter to $416,000 from $345,000 in the prior year. Increases were the result of higher occupancy costs associated with the Bank’s expansion into the adjacent building and renovation costs. The building was placed into service during the quarter. The Bank also had higher expenses for FDIC insurance premiums, external accounting and advertising.

The Bank made provisions to the allowance for loan loss account of $15,000 in the three month period ended September 30, 2010 compared to $40,000 for the same period in 2009.

Income tax provisions for the quarter were $28,000 for the third quarter of 2010 compared to $13,000 in 2009. The provision reflects the $48,000 credit for tax loss carry-forwards from prior year operations in 2010.

For the nine months ended September 30, 2010 net income increased by $192,000 to $294,000 or $.38 per basic and diluted share from $102,000 for the same period in 2009. The calculation of earnings per share is calculated on the weighted-outstanding shares during the nine month period. Had all shares been outstanding during the entire period, earnings per share would have been $.99 per basic and diluted share. Annualized net income as a percent of average assets increased to .64% from .23% for the same period in 2009. In addition to the $48,000 credit to the provision for state and federal taxes recorded in the third quarter the Bank recorded a $33,000 in the second quarter to reflect refunds due for overpayments of federal taxes in prior periods. Adjusting for these non-recurring items, net income for the first nine months of 2010 would have been $213,000 or $0.72 per basic and diluted share with all shares outstanding for the nine month period and the annualized return on average assets would have been .50%. On a pre-tax basis net income was $394,000 in 2010 compared to $136,000 in 2009.

Net interest income for the first nine months of 2010 was $1.6 million compared to $1.2 million in 2009. Yields on average earning assets for the period on a fully tax-equivalent basis declined to 5.67% from 5.96% for the same period in 2009. The yield on average loans increased slightly to 6.43% compared to 6.41% in 2009, while the yields on investments available for sale declined to 3.72% from 4.88% in 2009. The decline in asset yields was offset by a decline in the total cost of interest-bearing liabilities to 2.24% in 2010 compared to 3.41% in 2009. The result of these changes on a tax-equivalent basis was an increase in net interest income as a percent of average earnings assets to 3.56% in the third quarter of 2010 compared to 2.75% in 2009.

Non-interest income increased $17,000 for the nine months to $124,000 from $107,000 in the prior year. The increase was attributable to changes in gains on sale and origination fees on loans sold in the secondary market. Non-interest expense increased by $97,000 for the nine months in 2010 to $1.2 million from $1.1 million in the prior year. Increases were the result of higher occupancy costs associated with the Bank’s expansion into the adjacent building and renovation costs. The building was placed into service during the period. The Bank also had higher expenses for FDIC insurance premiums, audit and accounting expenses, consulting expenses and advertising.

The Bank made provisions to the allowance for loan loss account of $110,000 in the first nine months of 2010 compared to $42,000 for the same period in 2009.

Income tax provisions for the nine month period ended September 30, 2010 were $100,000 compared to $34,000 for the same period in 2009. The provisions in 2010 were reduced by the credits of $81,000 for prior year loss carry-forwards as previously discussed.

Total assets grew $4.5 million or 7.75% to $62.6 million at September 30, 2010 from $58.1 million at September 30, 2009. Portfolio loans during the same period decreased $428,000 to $47.1 million. The change reflects a high volume of loan pre-payments and relatively weak loan demand. Investment securities available for sale increased $4.5 million to $6.1 million year to year and mortgage-backed securities available for sale decreased from normal payments $143,000 to $1.8 million. The Bank’s cash equivalent position decreased over the twelve months by $887,000 to $2.9 million.

Non-performing assets were entirely made up of loans on non-accrual, which stood at $688,000 or 1.45% at September 30, 2010 compared to $282,000 or .59% at September 30, 2009. The increase is attributable to a single borrower with multiple one to four family investment properties. Although the loans continue in a delinquent status, the borrower is making payments and cooperating with the Bank. The Bank charged-off $85,000 to the allowance for loan losses on the write-down on the foreclosure on three properties on which the market values had declined below appraised values at loan inception.

Deposits grew $2.7 million or 5.75% to $52.0 million from September 30, 2009 to September 30, 2010. The growth came from local depositors in money market accounts and certificates of deposit. During the period, the Bank reduced reliance on brokered an internet certificates of deposit.

Capital accounts grew by $2.6 million to $5.9 million at September 30, 2010 from $3.3 million at September 30, 2009. The proceeds from the Bank’s conversion from a mutual to a stock organization and initial public offering accounted for $2.3 million of the increase. The remainder of the increase came from current earnings.

Non-GAAP Financial Measures
This release contains or references tax-equivalent net interest income, which is a non-GAAP financial measure. Tax-equivalent net interest income is derived from GAAP net interest income using an assumed tax rate of 34%. We believe the presentation of net interest income on a tax-equivalent basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. Although the Bank believes that this non-GAAP financial measure enhances investors’ understanding of our business and performance, this non-GAAP financial measure should not be considered an alternative to the GAAP measure.

Forward-Looking Statements
Statements contained in this news release which are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Bank with the Federal Deposit Insurance Corporation from time to time.

Contact: Tom P. Smith
President and Chief Executive Officer
United-American Savings Bank
412-431-9191