KeyCorp and U.S.B. Holding Co., Inc. Sign Merger Agreement -- Key will add 31 branches, approximately $3.0 billion in assets in high-

growth, affluent, suburban New York State counties

-- Expanded services for U.S.B. clients

-- Significant expansion for Key in lower Hudson Valley, N.Y., area



    CLEVELAND and ORANGEBURG, N.Y., July 27 /PRNewswire-FirstCall/ --
 KeyCorp (NYSE:   KEY), the holding company for KeyBank N.A., and U.S.B.
 Holding Co., Inc. (NYSE:   UBH), the holding company for Union State Bank, a
 state-chartered commercial bank, today announced the signing of a
 definitive agreement under which Key would acquire U.S.B. Holding Co., Inc.
 Union State Bank, one of the leading community banks serving southern New
 York State, has assets of approximately $3 billion, loans of $1.6 billion
 and $2 billion in deposits.
     Based on the July 26, 2007 closing price for KeyCorp common stock, the
 transaction would be valued at approximately $575 million. The
 consideration that a U.S.B. Holding Co., Inc. shareholder will receive is a
 combination that includes cash and KeyCorp common stock. Each share of
 U.S.B. Holding Co., Inc. common stock will be exchanged at the closing for
 .455 shares of KeyCorp common stock and $8.925 in cash. The actual value of
 the purchase consideration to be paid upon closing to each U.S.B. Holding
 Co., Inc. shareholder will vary based upon the market price of KeyCorp
 common shares. Options not exercised by the closing date will convert to
 KeyCorp options.
     "This is an important strategic acquisition that will significantly
 enhance our presence in attractive markets within and contiguous to our
 current operations," said Beth Mooney, a KeyCorp vice chair and head of Key
 Community Banking. "We believe our specialties in small business, middle
 market banking, private banking and wealth management will be an excellent
 fit in these markets."
     Thomas E. Hales, U.S.B. Holding Co., Inc. chairman and CEO, said: "This
 transaction provides an opportunity for U.S.B. Holding Co., Inc.
 shareholders to receive an attractive value for their shares, and it brings
 Key's high commitment to service and world-class products to our
 communities. While we explored many alternatives, including remaining
 independent, we feel that our combination with Key is best for our clients
 and employees. Like Union State Bank, Key also has a long and established
 history of commitment to its communities."
     "Union State Bank clients will be able to take advantage of Key's
 extensive range of products, including private banking, small business
 banking, commercial and real estate lending, and equipment leasing," said
 Key's Northeast Regional President Thomas Geisel. Geisel also noted that
 Union State Bank clients would gain access to Key's 1,500 ATMs and one of
 the top-ranked online banking sites in the industry.
     "We expect this transaction to be accretive to KeyCorp earnings in 2009
 and to achieve an estimated internal rate of return of approximately 14%,"
 said KeyCorp's Chief Financial Officer Jeff Weeden. "We also expect to
 incur an after-tax charge of approximately $26 million in connection with
 the closing of the transaction."
     The transaction, which has been approved by the boards of directors of
 both companies, is expected to close within the next six months, subject to
 approval by U.S.B. Holding Co., Inc. shareholders and banking regulators.
     When completed, the acquisition will add 31 branches to Key's 32
 branches in the Hudson Valley, and create one of the largest financial
 institutions serving the area. Union State Bank branches are located in
 Westchester, Rockland, Orange and New York counties in New York State, and
 Fairfield County, Connecticut.
     KeyCorp was advised by Sullivan & Cromwell LLP. U.S.B. Holding Co.,
 Inc. was advised by Keefe, Bruyette & Woods, Inc., and its legal counsel
 was Thacher Proffitt & Wood LLP, Washington, D.C.
     About KeyCorp
     Cleveland-based KeyCorp is one of the nation's largest bank-based
 financial services companies, with assets of approximately $94 billion. Key
 companies provide investment management, retail and commercial banking,
 consumer finance, and investment banking products and services to
 individuals and companies throughout the United States and, for certain
 businesses, internationally. For more information, visit
 https://www.Key.com/.
     About U.S.B. Holding Company, Inc.
     U.S.B. Holding Company, Inc. is headquartered in Orangeburg, New York and
 is the holding company for Union State Bank, a full service, state-chartered
 commercial bank that operates 31 banking offices serving the Lower Hudson
 Valley Region of New York.  Founded in 1969, the company has assets of
 approximately $2.9 billion, and provides financial services for individuals,
 professionals, and businesses operating from offices in Rockland, Orange, and
 Westchester counties, New York, as well as in Stamford, Connecticut and New
 York City.
 
 
                             AT-A-GLANCE STATISTICS
 
                           KeyCorp                     U.S.B. Holding
 
     Headquarters          Cleveland, OH               Orangeburg, NY
 
     Founding              1825                        1969
 
     Employees             18,888                      417
 
     Ticker Symbol         KEY (NYSE)                  UBH (NYSE)
 
     Assets                $94 billion                 $2.9 billion
 
     Retail Branches       954                         31
 
     2006 Net Income       $1.06 billion               $31.6 million
 
     Retail Branch
      Locations*           13 states                   Westchester,
                                                       Rockland, Orange
                                                       New York Counties, NY
                                                       and Fairfield County,
                                                       Conn.
 
     Specialties           Retail, Online Banking      Retail Banking
                           Small Business Banking      Commercial Real Estate
                           Wealth Management            Finance
                           Middle Market Banking       Residential Real Estate
                           Commercial Real Estate       Finance
                           Equipment Finance
                           Investment Banking
     * Key's commercial real estate, equipment finance, consumer finance,
 investment banking/capital markets and institutional asset management
 business groups operate from these and additional offices in 28 states and
 26 countries.
     Additional Information about the Merger and Where to Find It:
     In connection with the proposed merger of U.S.B. Holding Co., Inc. with
 and into KeyCorp, KeyCorp and U.S.B. Holding Co., Inc. intend to file
 relevant materials with the Securities and Exchange Commission, including a
 registration statement on Form S-4 that will contain a proxy
 statement/prospectus. INVESTORS ARE URGED TO READ THESE MATERIALS WHEN THEY
 BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
 KEYCORP, U.S.B. HOLDING CO., INC. AND THE MERGER. The proxy
 statement/prospectus and other relevant materials (when they become
 available), and any other documents filed by KeyCorp or U.S.B. Holding Co.,
 Inc. with the SEC, may be obtained free of charge at the SEC's website at
 www.sec.gov. In addition, investors may obtain free copies of the documents
 filed with the SEC by KeyCorp by directing a written request to KeyCorp,
 127 Public Square, Cleveland, Ohio 44114, Attention: Secretary, and free
 copies of the documents filed with the SEC by U.S.B. Holding Co., Inc. by
 directing a written request to U.S.B. Holding Co., Inc., 100 Dutch Hill
 Road, Orangeburg, New York 10962, Attention: Secretary.
     KeyCorp, U.S.B. Holding Co., Inc. and their respective executive
 officers and directors may be deemed to be participants in the solicitation
 of proxies from the shareholders of U.S.B. Holding Co., Inc. in connection
 with the merger. Information about the directors and executive officers of
 KeyCorp and U.S.B. Holding Co., Inc. and information about any other
 persons who may be deemed participants in this transaction will be included
 in the proxy statement/prospectus. You can find information about KeyCorp's
 directors and executive officers in the proxy statement for KeyCorp's
 annual meeting of shareholders filed with the SEC on March 21, 2007. You
 can find information about U.S.B. Holding Co., Inc.'s directors and
 executive officers in the proxy statement for U.S.B. Holding Co., Inc.'s
 annual meeting of shareholders filed with the SEC on April 27, 2007. You
 can obtain free copies of these documents from the SEC, KeyCorp or U.S.B.
 Holding Co., Inc. using the contact information above.
     This communication shall not constitute an offer to sell or the
 solicitation of an offer to sell or the solicitation of an offer to buy any
 securities.
     This news release contains forward-looking statements about issues like
 anticipated earnings outlook, asset quality trends and anticipated
 improvement in profitability and competitiveness. Forward-looking
 statements by their nature are subject to assumptions, risks and
 uncertainties. Actual results could differ materially from those contained
 in or implied by such forward- looking statements for a variety of factors
 including: changes in interest rates; failure of the economy to continue to
 improve, which could materially impact credit quality trends and the
 ability to generate loans; declines or disruptions in the stock or bond
 markets; delay in or inability to execute strategic initiatives designed to
 grow revenues and/or manage expenses; inaccurate or erroneous assumptions
 made in connection with various modeling techniques; consummation of
 significant business combinations or divestitures; new legal obligations or
 restrictions or unfavorable resolution of litigation; further disruption in
 the economy and the general business climate as a result of terrorist
 activities or military actions; and changes in accounting, tax or
 regulatory practices or requirements.
 
 

SOURCE KeyCorp
RELATED LINKS
http://www.keybank.com

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