MONTEBELLO, NY--(Marketwire - Oct 31, 2011) - Provident New York Bancorp (
President's Comments
Jack Kopnisky, President and CEO, commented, "We have substantially completed a comprehensive review of operations and opportunities at Provident, and new strategies designed to drive growth in revenues and earnings have been implemented. Achieving these longer-range goals comes at a current cost, however, including fourth quarter charges of $2.1 million associated with the relocation of two branches and $1.1 million of severance expense associated with workforce realignment. Credit costs also impacted the quarter. We charged off $6.7 million on two ADC relationships and $1.2 million as we sold a $2.5 million pool of non-performing residential mortgages. I am encouraged by our commercial loan originations, which were $147.3 million for the fourth quarter, up $21.8 million over the linked quarter. The commercial loan approved pipeline is up 31 percent over the linked quarter and up 111 percent over the same quarter of the previous year. During the quarter we opened two new commercial banking centers in Bergen County, New Jersey, as part of our revenue enhancement strategies. These locations already have loans in our pipeline. While fiscal 2011 was challenging on many fronts, we have taken necessary steps to position the Company for growth as well as risk mitigation in the upcoming fiscal year."
As a reminder, Provident New York Bancorp will host a conference call on October 31, 2011, at 11:00 AM EDT to discuss the Company's fourth quarter results. Interested parties are invited to listen in by dialing 1-866-551-3680 and entering PIN number 88613469#. Accompanying slides will be available on the Company's website.
Key items for the quarter
- Provisions for loan losses were $8.8 million for the quarter compared to $3.6 million for the linked quarter, and $2.3 million for the same quarter last year.
- Commercial loan originations were $147.3 million compared to $125.5 million for the linked quarter and $97.9 million for the same quarter last year.
- Net charge-offs of $10.3 million are up $5.9 million from the linked quarter and up $7.8 million from the same quarter last year, primarily due to the ADC credit mentioned above. Charge-offs during the quarter included loans with $1.4 million previously provisioned for as of June 30, 2011.
- Non-performing loans, a subset of substandard loans, decreased to $40.6 million, down $7.5 million from the linked quarter and are up $13.7 million over the same quarter in the prior year.
- Restructuring charges in the fourth quarter of 2011 included $1.1 million in severances and $2.1 million in branch relocation or an after tax effect of $0.06 on diluted earnings per share.
Net Interest Income and Margin
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Net interest income was $22.8 million for the fourth quarter of fiscal 2011, a decrease of $525,000 from the same quarter of fiscal 2010 as funding costs declined at a slower pace than interest income. The current quarter was also negatively effected by non-performing loans net of prepayment fees, reducing interest income on loans by $630,000 in the fourth quarter of 2011 and $68,000 in the fourth quarter of 2010. The tax-equivalent yield on investments decreased 35 basis points and loan yields were down 26 basis points compared to the fourth quarter fiscal 2010. As a result, the yield on interest-earning assets declined 34 basis points. For the same period, the cost of deposits decreased 8 basis points to 0.26 percent, and the cost of borrowings increased by 16 basis points to 3.69 percent. The resulting net interest margin on a tax-equivalent basis was 3.58 percent for the fourth quarter of fiscal 2011, compared to 3.75 percent for the same period a year ago.
Fourth quarter fiscal 2011 compared with linked quarter ended June 30, 2011
Net interest income for the quarter ended September 30, 2011 remained relatively unchanged compared to the linked quarter ended June 30, 2011. The tax-equivalent net interest margin decreased 12 basis points from 3.70 percent in the linked quarter. The overall yield on loans decreased 19 basis point to 5.22 percent. The current quarter was negatively effected by non-performing loans net of prepayment fees to a greater extent than the linked quarter, $630,000 and $65,000 respectively. The yield on the investment portfolio decreased 6 basis points. Further, the cash balance increase at the federal reserve from municipal deposit collection depressed net interest margin by a further 2 basis points. The overall yield on earning assets decreased 17 basis points to 4.33 percent. The cost of deposits declined 3 basis points, reflecting the already low level of deposit pricing. The average cost of borrowing increased 2 basis points as a result of a change in the mix of short and long term advances.
Fiscal 2011 compared with fiscal 2010
Net interest income for fiscal 2011 was $91.3 million a decrease of $2.0 million over 2010 levels.
The net interest margin on a tax-equivalent basis was 3.65 percent for fiscal 2011, compared to 3.78 percent for 2010. The decrease was due to a decline in investment portfolio yields of 58 basis points and loan yields of 22 basis points offset in part by lower cost of deposits (14 basis points) and borrowings (7 basis points).
Noninterest Income
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Noninterest income totaled $9.1 million for the fourth quarter, an increase of $1.3 million over the fourth quarter of fiscal 2010. Higher gains on sales of securities of $4.5 million compared to $2.9 million as well as a lower fair value loss on interest rate caps of $170,000 were offset in part by an other than temporary impairment on investments securities of $251,000.
Fourth quarter fiscal 2011 compared with linked quarter ended June 30, 2011
Noninterest income increased $3.9 million on a linked quarter basis, mainly due to higher gains on the sale of securities of $4.5 million compared $542,000 for the linked quarter.
Fiscal 2011 compared with fiscal 2010
Non-interest income increased by $2.8 million for fiscal 2011 as compared to 2010. Increases were seen in gains on securities sales and loans of $1.9 million and $160,000, respectively, as well as a lower loss on fair value of interest rate caps of $909,000 offset in part by declines in deposit fees of $417,000.
Noninterest Expense
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Noninterest expense increased $3.0 million, when compared to the fourth quarter fiscal 2010. The increase is primarily due to charges of $3.2 million related to branch relocations and employee severances. In addition, increased expenses associated with foreclosed property were offset in part by lower incentive compensation and regulatory fees from FDIC insurance.
Fourth quarter fiscal 2011 compared with the linked quarter ended June 30, 2011
On a linked quarter basis, noninterest expense increased $1.7 million. Increases were due to the aforementioned restructuring charge offset in part by costs associated with the transition in CEO in the prior quarter.
Fiscal 2011 compared with fiscal 2010
Non interest expense increased $6.9 million in fiscal 2011 over 2010. Expenses associated with defined benefit settlement, restructuring charges, transition in CEO, a full year of operations in Nyack and Yonkers, and additional REO expense were offset in part by declines in intangible amortization and FDIC assessments.
Income Taxes
The Company recorded an income tax credit for the fourth quarter of $826,000 compared to an effective tax rate of 27 percent for the same period in fiscal 2010 (increased effect of BOLI income and tax-exempt municipal security interest relative to pre-tax income). On a year-to-date basis the effective tax rate was 19 percent for fiscal 2011 and 25 percent for 2010.
Credit Quality
Nonperforming loans decreased to $40.6 million at September 30, 2011 from $48.1 million at June 30, 2011, as the Company executed a sale of non-performing residential mortgages as well as charging off of non-performing loans in the quarter. Net charge offs for the quarter ended September 30, 2011 were $10.3 million compared to $4.3 million for the linked quarter and $2.4 million for the quarter ended September 30, 2010. The increase was caused primarily by an additional $5.5 million charge related to one ADC relationship due to lack of sales and the related drop in appraised value for which we had previously charged off $2.0 million in the third quarter. Our provision was $8.8 million for the current quarter, resulting in an allowance for loan losses of $27.9 million, or 69 percent of non-performing loans at September 30, 2011. This compares to 61 percent at June 30, 2011 and 115 percent at September 30, 2010. Substandard loans at September 30, 2011 were $94.0 million, down from $103.8 million at June 30, 2011, and $132.1 million at September 30, 2010. Special mention loans were $23.0 million compared to $24.1 million at June 30, 2011 and $37.9 million at September 30, 2010.
Key Balance Sheet Changes
- The balance sheet grew $161.3 million or 5.4 percent compared to June 30, 2011 due to an increase cash and due from banks resulting from deposits of municipal tax collections.
- Deposits increased $41.2 million compared to June 30, 2011, excluding municipal and wholesale deposits. Transaction accounts, excluding municipal deposits increased $53.1 million compared to June 30, 2011. Deposits as of September 30, 2011, included approximately $280 million in municipal tax deposits.
- Total loan originations during fourth quarter fiscal 2011 were $180.6 million compared to $148.3 million from the linked quarter. Commercial real estate balances increased by $49.9 million over June 30, 2011 levels. Residential 1-4 family mortgages declined over the same period by $12.3 million.
- Securities decreased $95.3 million over June 30, 2011 levels, primarily due to sales of $242.7 million in securities during the fourth quarter with associated gains of $4.5 million as well as $54.7 million in called bonds which were partially offset by new purchases of investments of $203.8 million.
- Borrowings decreased over June 30, 2011 levels by $26.8 million as year end cash and municipal transaction account levels resulted in paying off Federal Home Loan Bank of New York overnight borrowings.
Capital and Liquidity
Provident Bank remained well-capitalized at September 30, 2011 with the Bank's Tier 1 leverage ratio at 8.14 percent. The Company's tangible capital as a percent of tangible assets decreased 43 basis points from June 30, 2011 levels to 8.94 percent at September 30, 2011, while tangible book value per share increased to $7.02 from $6.93 at June 30, 2011 (a reconciliation of these Non-GAAP equity ratios are included with the ratios listed on the last page). Total capital increased $2.1 million from June 30, 2011, to $431.1 million at September 30, 2011, due to a net decrease of $2.9 million in the Company's retained earnings, a $870,000 increase in treasury stock, a decrease of $45,000 due to stock based compensation items, offset by a $5.9 million improvement in accumulated other comprehensive income. The Company repurchased 183,000 shares in the open market during the fourth fiscal quarter. The remaining authorization for share repurchases is 776,713 shares.
Other Information
The Company holds four private label mortgage backed securities with an amortized cost of $5.4 million and an estimated fair value of $4.9 million. One security included within these amounts has a carrying value of $1.7 million after recording an other than temporary impairment charge of $75,000. The amortized cost of this security is $1.9 million. Additionally, at September 30, 2011 an equity security was held with a carrying amount of $837,000 after recording an impairment charge of $203,000 due to other than temporary impairment being recognized. It is not likely that the Company will be required to sell these two securities prior to recovery of its amortized cost basis less any applicable current-period credit loss.
About Provident New York Bancorp
Headquartered in Montebello, New York, Provident New York Bancorp is the parent company of Provident Bank, an independent full-service community bank. Provident Bank operates 36 branches that serve the Hudson Valley region. The Bank offers a complete line of commercial, retail and investment management services. For more information, visit the Company's web site at www.providentbanking.com.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company's actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
Financial information contained in this release should be considered to be an estimate pending completion of the annual audit of the Company's financial statements and the filing of its fiscal 2011 Annual Report on Form 10-K with the Securities and Exchange Commission. While the Company is not aware of any need to revise the results disclosed in this release, the Company's auditors currently are reviewing the Company's testing of the carrying amount of goodwill on its financial statements in view of the relationship between the Company's book value per share and the market price of its common stock at the end of the fiscal year. Moreover, accounting literature may require adverse information received by management between the date of this release and the filing of the 10-K to be reflected in the results of fiscal 2011, even though the new information was received by management in fiscal 2012 subsequent to the date of this release.
| Reconciliation of Non GAAP Adjusted Earnings: | ||||||||||||||||||||||
| Quarter Ended | Twelve Months Ended | |||||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||||
| 2011 | 2010 | 2011 | 2011 | 2010 | ||||||||||||||||||
| Net Income (loss) | ||||||||||||||||||||||
| Net Income (loss) | $ | (493 | ) | $ | 5,403 | $ | 1,939 | $ | 11,739 | $ | 20,492 | |||||||||||
| Securities net gains and credit losses(1) | (2,535 | ) | (1,746 | ) | (306 | ) | (5,780 | ) | (4,844 | ) | ||||||||||||
| Defined benefit settlement charge/CEO transition(1) | - | - | 887 | 1,052 | - | |||||||||||||||||
| Restructuring charges(1) (2) | 2,243 | 2,243 | ||||||||||||||||||||
| Fair value loss on interest rate caps(1) | 101 | 163 | 154 | 117 | 657 | |||||||||||||||||
| Net adjusted income (loss) | $ | (684 | ) | $ | 3,820 | $ | 2,674 | $ | 9,371 | $ | 16,305 | |||||||||||
| Earnings per common share | ||||||||||||||||||||||
| Diluted Earnings per common share | $ | (0.01 | ) | $ | 0.14 | $ | 0.05 | $ | 0.31 | $ | 0.54 | |||||||||||
| Securities net gains and credit losses(1) | (0.07 | ) | (0.05 | ) | (0.01 | ) | (0.15 | ) | (0.13 | ) | ||||||||||||
| Defined benefit settlement charge/CEO transition (1) | - | - | 0.02 | 0.03 | - | |||||||||||||||||
| Restructuring charges(1) (2) | 0.06 | - | 0.06 | - | ||||||||||||||||||
| Fair value loss on interest rate caps(1) | - | - | - | - | 0.02 | |||||||||||||||||
| Diluted adjusted earnings per common share | $ | (0.02 | ) | $ | 0.10 | * | $ | 0.07 | * | $ | 0.25 | $ | 0.43 | |||||||||
| Non-interest income | ||||||||||||||||||||||
| Total non-interest income | $ | 9,056 | $ | 7,714 | $ | 5,217 | $ | 29,951 | $ | 27,201 | ||||||||||||
| Securities net gains and credit losses | (4,268 | ) | (2,940 | ) | (515 | ) | (9,733 | ) | (8,157 | ) | ||||||||||||
| Fair value loss on interest rate caps | 170 | 275 | 259 | 197 | 1,106 | |||||||||||||||||
| Adjusted non interest-income | $ | 4,958 | $ | 5,049 | $ | 4,961 | $ | 20,415 | $ | 20,150 | ||||||||||||
| Non-interest expense | ||||||||||||||||||||||
| Total non-interest expense | $ | 24,382 | $ | 21,362 | $ | 22,669 | $ | 90,111 | $ | 83,170 | ||||||||||||
| Restructuring charges | (3,201 | ) | - | - | (3,201 | ) | - | |||||||||||||||
| Defined benefit settlement charge/CEO transaition1 | - | - | (1,494 | ) | (1,772 | ) | - | |||||||||||||||
| Adjusted non interest-expense | $ | 21,181 | $ | 21,362 | $ | 21,175 | $ | 85,138 | $ | 83,170 | ||||||||||||
| (1)After marginal tax effect 40.61% | ||||||||||||||||||||||
| *Rounding | ||||||||||||||||||||||
| (2)A valuation allowance for $342,000 was established for capital losses related to certain asset write-offs | ||||||||||||||||||||||
| Provident New York Bancorp and Subsidiaries | |||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION | |||||||||||||||
| (unaudited, in thousands, except share and per share data) | |||||||||||||||
| September 30, | September 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | |||||||||||||
| Assets: | |||||||||||||||
| Cash and due from banks | $ | 281,512 | $ | 90,872 | $ | 45,530 | |||||||||
| Total securities | 849,884 | 934,860 | 945,230 | ||||||||||||
| Loans held for sale | 4,176 | 5,890 | - | ||||||||||||
| Loans:(1) | |||||||||||||||
| One- to four-family residential mortgage loans | 389,765 | 434,900 | 402,072 | ||||||||||||
| Commercial real estate, commercial business | 913,279 | 797,159 | 863,370 | ||||||||||||
| Acquisition, development and construction loans | 175,931 | 231,258 | 193,312 | ||||||||||||
| Consumer loans | 224,824 | 238,224 | 226,518 | ||||||||||||
| Total loans, gross | 1,703,799 | 1,701,541 | 1,685,272 | ||||||||||||
| Allowance for loan losses | (27,917 | ) | (30,843 | ) | (29,385 | ) | |||||||||
| Total loans, net | 1,675,882 | 1,670,698 | 1,655,887 | ||||||||||||
| Federal Home Loan Bank stock, at cost | 17,584 | 19,572 | 18,807 | ||||||||||||
| Premises and equipment, net | 40,886 | 43,598 | 42,249 | ||||||||||||
| Goodwill | 160,861 | 160,861 | 160,861 | ||||||||||||
| Other amortizable intangibles | 4,629 | 3,640 | 4,967 | ||||||||||||
| Bank owned life insurance | 56,967 | 50,938 | 56,454 | ||||||||||||
| Other assets | 45,021 | 40,096 | 46,072 | ||||||||||||
| Total assets | $ | 3,137,402 | $ | 3,021,025 | $ | 2,976,057 | |||||||||
| Liabilities: | |||||||||||||||
| Deposits | |||||||||||||||
| Retail | $ | 194,299 | $ | 174,731 | $ | 174,652 | |||||||||
| Commercial | 296,505 | 277,217 | 279,659 | ||||||||||||
| Municipal | 160,422 | 77,909 | 15,559 | ||||||||||||
| Personal NOW deposits | 164,637 | 139,517 | 155,141 | ||||||||||||
| Business NOW deposits | 37,092 | 34,105 | 29,892 | ||||||||||||
| Municipal NOW deposits | 200,773 | 241,995 | 113,876 | ||||||||||||
| Total transaction accounts | 1,053,728 | 945,474 | 768,779 | ||||||||||||
| Savings | 429,825 | 392,321 | 428,120 | ||||||||||||
| Money market deposits | 509,483 | 427,334 | 512,478 | ||||||||||||
| Certificates of deposit | 303,659 | 377,573 | 388,696 | ||||||||||||
| Total deposits | 2,296,695 | 2,142,702 | 2,098,073 | ||||||||||||
| Borrowings | 323,522 | 363,751 | 350,333 | ||||||||||||
| Borrowings Senior Note | 51,499 | 51,496 | 51,498 | ||||||||||||
| Mortgage escrow funds and other liabilities | 34,552 | 32,121 | 47,116 | ||||||||||||
| Total liabilities | 2,706,268 | 2,590,070 | 2,547,020 | ||||||||||||
| Stockholders' equity | 431,134 | 430,955 | 429,037 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 3,137,402 | $ | 3,021,025 | $ | 2,976,057 | |||||||||
| Shares of common stock outstanding at period end | 37,864,008 | 38,262,288 | 38,005,866 | ||||||||||||
| Book value per share | $ | 11.39 | $ | 11.26 | $ | 11.29 | |||||||||
| (1) Certain amounts from prior periods have been reclassed to conform to current fiscal year presentation | |||||||||||||||
| Provident New York Bancorp and Subsidiaries | |||||||||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) | |||||||||||||||||||||
| (unaudited, in thousands, except share and per share data) | |||||||||||||||||||||
| Quarter | |||||||||||||||||||||
| Quarter Ended | Ended | Twelve Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||||||||
| 2011 | 2010 | 2011 | 2011 | 2010 | |||||||||||||||||
| Interest and dividend income: | |||||||||||||||||||||
| Loans and loan fees | $ | 21,995 | $ | 23,094 | $ | 22,261 | $ | 89,500 | $ | 92,542 | |||||||||||
| Securities taxable | 3,825 | 4,016 | 3,607 | 14,493 | 18,208 | ||||||||||||||||
| Securities non-taxable | 1,786 | 1,941 | 1,829 | 7,441 | 7,774 | ||||||||||||||||
| Other earning assets | 211 | 270 | 237 | 1,180 | 1,250 | ||||||||||||||||
| 27,817 | 29,321 | 27,934 | 112,614 | 119,774 | |||||||||||||||||
| Interest expense: | |||||||||||||||||||||
| Deposits | 1,384 | 1,677 | 1,493 | 6,104 | 8,517 | ||||||||||||||||
| Borrowings | 3,642 | 4,328 | 3,637 | 15,220 | 17,923 | ||||||||||||||||
| Total interest expense | 5,026 | 6,005 | 5,130 | 21,324 | 26,440 | ||||||||||||||||
| Net interest income | 22,791 | 23,316 | 22,804 | 91,290 | 93,334 | ||||||||||||||||
| Provision for loan losses | 8,784 | 2,250 | 3,600 | 16,584 | 10,000 | ||||||||||||||||
| Net interest income after provision for loan losses | 14,007 | 21,066 | 19,204 | 74,706 | 83,334 | ||||||||||||||||
| Non-interest income: | |||||||||||||||||||||
| Deposit fees and service charges | $ | 2,727 | $ | 2,695 | $ | 2,674 | $ | 10,811 | $ | 11,228 | |||||||||||
| Net gain on sales of securities | 4,519 | 2,940 | 542 | 10,011 | 8,157 | ||||||||||||||||
| Other than temporary loss on securities | (251 | ) | - | (27 | ) | (278 | ) | - | |||||||||||||
| Title insurance fees | 275 | 273 | 312 | 1,224 | 1,157 | ||||||||||||||||
| Bank owned life insurance | 514 | 491 | 488 | 2,049 | 2,044 | ||||||||||||||||
| Gain on sale of loans | 166 | 422 | 9 | 1,027 | 867 | ||||||||||||||||
| Investment management fees | 733 | 759 | 815 | 3,080 | 3,070 | ||||||||||||||||
| Fair value loss on interest rate caps | (170 | ) | (275 | ) | (259 | ) | (197 | ) | (1,106 | ) | |||||||||||
| Other | 543 | 409 | 663 | 2,224 | 1,784 | ||||||||||||||||
| Total non-interest income | 9,056 | 7,714 | 5,217 | 29,951 | 27,201 | ||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||
| Compensation and benefits | 10,129 | 11,440 | 11,122 | 43,662 | 43,589 | ||||||||||||||||
| Defined benefit settlement charge/CEO transition | - | - | 1,494 | 1,772 | - | ||||||||||||||||
| Restructuring charge (severance/branch relocation) | 3,201 | - | - | 3,201 | - | ||||||||||||||||
| Stock-based compensation plans | 303 | 338 | 284 | 1,162 | 1,543 | ||||||||||||||||
| Occupancy and office operations | 3,693 | 3,403 | 3,423 | 14,508 | 13,434 | ||||||||||||||||
| Advertising and promotion | 677 | 675 | 855 | 3,328 | 3,252 | ||||||||||||||||
| Professional fees | 1,147 | 1,208 | 1,137 | 4,389 | 4,019 | ||||||||||||||||
| Data and check processing | 718 | 587 | 712 | 2,763 | 2,285 | ||||||||||||||||
| Amortization of intangible assets | 338 | 432 | 305 | 1,426 | 1,849 | ||||||||||||||||
| FDIC insurance and regulatory assessments | 636 | 1,033 | 587 | 2,910 | 3,675 | ||||||||||||||||
| ATM/debit card expense | 425 | 347 | 400 | 1,584 | 1,601 | ||||||||||||||||
| Foreclosed property expense | 677 | 21 | 461 | 1,171 | 137 | ||||||||||||||||
| Other | 2,438 | 1,878 | 1,889 | 8,235 | 7,786 | ||||||||||||||||
| Total non-interest expense | 24,382 | 21,362 | 22,669 | 90,111 | 83,170 | ||||||||||||||||
| Income (Loss) before income tax expense | (1,319 | ) | 7,418 | 1,752 | 14,546 | 27,365 | |||||||||||||||
| Income tax (benefit) expense | (826 | ) | 2,015 | (187 | ) | 2,807 | 6,873 | ||||||||||||||
| Net income | $ | (493 | ) | $ | 5,403 | $ | 1,939 | $ | 11,739 | $ | 20,492 | ||||||||||
| Per common share: | |||||||||||||||||||||
| Basic (loss) earnings | $ | (0.01 | ) | $ | 0.14 | $ | 0.05 | $ | 0.31 | $ | 0.54 | ||||||||||
| Diluted (loss) earnings | (0.01 | ) | 0.14 | 0.05 | 0.31 | 0.54 | |||||||||||||||
| Dividends declared | 0.06 | 0.06 | 0.06 | 0.24 | 0.24 | ||||||||||||||||
| Weighted average common shares: | |||||||||||||||||||||
| Basic | 37,332,121 | 37,793,860 | 37,368,391 | 37,452,596 | 38,161,180 | ||||||||||||||||
| Diluted | 37,332,245 | 37,793,860 | 37,370,213 | 37,453,542 | 38,185,122 | ||||||||||||||||
| Selected Financial Condition Data: | Three Months Ended | |||||||||||||||||||
| (in thousands except share and per share data) | 09/30/11 | 06/30/11 | 03/31/11 | 12/31/10 | 09/30/10 | |||||||||||||||
| End of Period | ||||||||||||||||||||
| Total assets | $ | 3,137,402 | $ | 2,976,057 | $ | 2,919,291 | $ | 2,940,513 | $ | 3,021,025 | ||||||||||
| Loans, gross (1) | 1,703,799 | 1,685,272 | 1,684,827 | 1,699,502 | 1,701,541 | |||||||||||||||
| Securities available for sale | 739,844 | 919,805 | 833,179 | 869,996 | 901,012 | |||||||||||||||
| Securities held to maturity | 110,040 | 25,425 | 28,054 | 30,425 | 33,848 | |||||||||||||||
| Bank owned life insurance | 56,967 | 56,454 | 51,985 | 51,433 | 50,938 | |||||||||||||||
| Goodwill | 160,861 | 160,861 | 160,861 | 160,861 | 160,861 | |||||||||||||||
| Other amortizable intangibles | 4,629 | 4,967 | 2,857 | 3,229 | 3,640 | |||||||||||||||
| Other non-earning assets | 85,907 | 88,321 | 96,809 | 94,933 | 83,694 | |||||||||||||||
| Deposits | 2,296,695 | 2,098,073 | 2,089,904 | 1,980,068 | 2,142,702 | |||||||||||||||
| Borrowings | 375,021 | 401,831 | 379,441 | 495,783 | 415,247 | |||||||||||||||
| Equity | 431,134 | 429,037 | 420,269 | 419,642 | 430,955 | |||||||||||||||
| Other comprehensive income related to investment securities reflected in stockholders' equity | 13,604 | 5,769 | (3,146 | ) | (2,932 | ) | 12,621 | |||||||||||||
| Average Balances | ||||||||||||||||||||
| Total assets | $ | 2,978,273 | $ | 2,915,988 | $ | 2,940,299 | $ | 2,961,458 | $ | 2,919,961 | ||||||||||
| Loans, gross: | ||||||||||||||||||||
| Real estate- residential mortgage | 398,420 | 384,582 | 386,592 | 400,229 | 417,584 | |||||||||||||||
| Real estate- commercial mortgage | 681,165 | 648,371 | 619,145 | 606,701 | 570,023 | |||||||||||||||
| Real estate- Acquisition, Development & Construction | 186,398 | 198,120 | 216,914 | 226,816 | 227,165 | |||||||||||||||
| Commercial and industrial | 208,181 | 222,128 | 229,632 | 236,390 | 243,691 | |||||||||||||||
| Consumer loans | 226,687 | 228,993 | 232,712 | 237,106 | 239,908 | |||||||||||||||
| Loans total (1) | 1,700,851 | 1,682,194 | 1,684,995 | 1,707,242 | 1,698,371 | |||||||||||||||
| Securities (taxable) | 717,893 | 688,445 | 684,834 | 692,346 | 655,794 | |||||||||||||||
| Securities (non-taxable) | 208,692 | 208,643 | 214,634 | 221,802 | 222,024 | |||||||||||||||
| Total earning assets | 2,634,941 | 2,580,429 | 2,594,131 | 2,628,815 | 2,578,024 | |||||||||||||||
| Non earning assets | 343,332 | 335,559 | 346,168 | 332,643 | 341,937 | |||||||||||||||
| Non-interest bearing checking | 486,504 | 464,197 | 468,031 | 470,873 | 449,666 | |||||||||||||||
| Interest bearing NOW accounts | 309,729 | 296,677 | 338,503 | 317,876 | 266,950 | |||||||||||||||
| Total transaction accounts | 796,233 | 760,874 | 806,534 | 788,749 | 716,616 | |||||||||||||||
| Savings (including mortgage escrow funds) | 461,566 | 444,913 | 416,777 | 405,177 | 424,012 | |||||||||||||||
| Money market deposits | 504,476 | 529,286 | 490,215 | 433,865 | 421,989 | |||||||||||||||
| Certificates of deposit | 371,907 | 346,903 | 367,099 | 406,241 | 415,059 | |||||||||||||||
| Total deposits and mortgage escrow | 2,134,182 | 2,081,976 | 2,080,625 | 2,034,032 | 1,977,676 | |||||||||||||||
| Total interest bearing deposits | 1,647,678 | 1,617,779 | 1,612,594 | 1,563,159 | 1,528,010 | |||||||||||||||
| Borrowings | 391,391 | 397,531 | 420,069 | 481,939 | 486,060 | |||||||||||||||
| Equity | 433,841 | 424,961 | 419,847 | 428,900 | 430,862 | |||||||||||||||
| Selected Operating Data: | ||||||||||||||||||||
| Condensed Tax Equivalent Income (Loss) Statement | ||||||||||||||||||||
| Interest and dividend income | $ | 27,817 | $ | 27,934 | $ | 27,803 | $ | 29,060 | $ | 29,321 | ||||||||||
| Tax equivalent adjustment* | 962 | 985 | 1,024 | 1,036 | 1,045 | |||||||||||||||
| Interest expense | 5,026 | 5,130 | 5,292 | 5,876 | 6,005 | |||||||||||||||
| Net interest income (tax equivalent) | 23,753 | 23,789 | 23,535 | 24,220 | 24,361 | |||||||||||||||
| Provision for loan losses | 8,784 | 3,600 | 2,100 | 2,100 | 2,250 | |||||||||||||||
| Net interest income after provision for loan losses | 14,969 | 20,189 | 21,435 | 22,120 | 22,111 | |||||||||||||||
| Non-interest income | 9,056 | 5,217 | 5,795 | 9,883 | 7,714 | |||||||||||||||
| Non-interest expense | 24,382 | 22,669 | 21,791 | 21,269 | 21,362 | |||||||||||||||
| Income (loss) before income tax expense | (357 | ) | 2,737 | 5,439 | 10,734 | 8,463 | ||||||||||||||
| Income tax expense (tax equivalent)* |
136 | 798 | 1,866 | 4,014 | 3,060 | |||||||||||||||
| Net income (loss) | $ | (493 | ) | $ | 1,939 | $ | 3,573 | $ | 6,720 | $ | 5,403 | |||||||||
| (1) Does not reflect allowance for loan losses of $27,917, $29,385, $30,130, $31,036 and $30,843. | ||||||||||||||||||||
| * Tax exempt income assumed at a 35% federal rate | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| 09/30/11 | 06/30/11 | 03/31/11 | 12/31/10 | 09/30/10 | ||||||||||||||||
| Performance Ratios (annualized) | ||||||||||||||||||||
| Return on Average Assets | -0.07 | % | 0.27 | % | 0.49 | % | 0.90 | % | 0.73 | % | ||||||||||
| Return on Average Equity | -0.45 | % | 1.83 | % | 3.45 | % | 6.22 | % | 4.98 | % | ||||||||||
| Non-Interest Income to Average Assets | 1.21 | % | 0.72 | % | 0.80 | % | 1.32 | % | 1.05 | % | ||||||||||
| Non-Interest Expense to Average Assets | 3.25 | % | 3.12 | % | 3.01 | % | 2.85 | % | 2.90 | % | ||||||||||
| Operating Efficiency Adjusted (2) | 68.91 | % | 70.99 | % | 73.56 | % | 70.59 | % | 71.09 | % | ||||||||||
| Analysis of Net Interest Income | ||||||||||||||||||||
| Yield on Loans | 5.22 | % | 5.41 | % | 5.40 | % | 5.47 | % | 5.48 | % | ||||||||||
| Yield on Investment Securities- Tax Equivalent | 2.81 | % | 2.87 | % | 2.91 | % | 2.82 | % | 3.16 | % | ||||||||||
| Yield on Earning Assets- Tax Equivalent | 4.33 | % | 4.50 | % | 4.51 | % | 4.54 | % | 4.67 | % | ||||||||||
| Cost of Deposits | 0.26 | % | 0.29 | % | 0.31 | % | 0.32 | % | 0.34 | % | ||||||||||
| Cost of Borrowings | 3.69 | % | 3.67 | % | 3.58 | % | 3.49 | % | 3.53 | % | ||||||||||
| Cost of Interest Bearing Liabilities | 0.98 | % | 1.02 | % | 1.06 | % | 1.14 | % | 1.18 | % | ||||||||||
| Net Interest Rate Spread- Tax Equivalent Basis | 3.35 | % | 3.48 | % | 3.45 | % | 3.40 | % | 3.49 | % | ||||||||||
| Net Interest Margin- Tax Equivalent Basis | 3.58 | % | 3.70 | % | 3.68 | % | 3.66 | % | 3.75 | % | ||||||||||
| Capital Information Data | ||||||||||||||||||||
| Tier 1 Leverage Ratio- Bank Only | 8.14 | % | 8.77 | % | 9.10 | % | 8.89 | % | 8.43 | % | ||||||||||
| Tier 1 Risk-Based Capital- Bank Only | 241,196 | 246,291 | 251,338 | 247,503 | 240,230 | |||||||||||||||
| Total Risk-Based Capital- Bank Only | 265,307 | 271,483 | 276,303 | 272,071 | 265,148 | |||||||||||||||
| Tangible Capital Consolidated (3) | 265,644 | 263,209 | 256,551 | 255,552 | 266,454 | |||||||||||||||
| Tangible Capital as a % of Tangible Assets Consolidated (3) | 8.94 | % | 9.37 | % | 9.31 | % | 9.20 | % | 9.33 | % | ||||||||||
| Shares Outstanding | 37,864,008 | 38,005,866 | 38,072,942 | 38,198,686 | 38,262,288 | |||||||||||||||
| Shares Repurchased during qrtr (open market) | 183,000 | 66,108 | 125,744 | 82,602 | 364,000 | |||||||||||||||
| Basic weighted common shares outstanding | 37,332,121 | 37,368,391 | 37,496,395 | 37,552,245 | 37,793,860 | |||||||||||||||
| Diluted common shares outstanding | 37,332,245 | 37,370,213 | 37,497,467 | 37,552,245 | 37,793,860 | |||||||||||||||
| Basic (loss) earnings per common share | $ | (0.01 | ) | $ | 0.05 | $ | 0.10 | $ | 0.18 | $ | 0.14 | |||||||||
| Diluted (loss) earnings per common share | (0.01 | ) | 0.05 | 0.10 | 0.18 | 0.14 | ||||||||||||||
| Dividends Paid per common share | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 | |||||||||||||||
| Book Value per common share | 11.39 | 11.29 | 11.04 | 10.99 | 11.26 | |||||||||||||||
| Tangible Book Value per common share (3) | 7.02 | 6.93 | 6.74 | 6.69 | 6.96 | |||||||||||||||
| Asset Quality Measurements | ||||||||||||||||||||
| Non-performing loans (NPLs): non-accrual | $ | 36,477 | $ | 42,226 | $ | 29,765 | $ | 30,690 | $ | 21,413 | ||||||||||
| Non-performing loans (NPLs): still accruing | 4,090 | 5,837 | 7,412 | 5,536 | 5,427 | |||||||||||||||
| Other Real Estate Owned | 5,391 | 5,184 | 5,351 | 3,585 | 3,891 | |||||||||||||||
| Non-performing assets (NPAs) | 45,958 | 53,247 | 42,528 | 39,811 | 30,731 | |||||||||||||||
| Troubled Debt Restructures still accruing | 8,736 | 7,447 | 21,954 | 17,581 | 16,047 | |||||||||||||||
| Net Charge-offs | 10,252 | 4,345 | 3,006 | 1,907 | 2,428 | |||||||||||||||
| Net Charge-offs as % of average loans (annualized) | 2.41 | % | 1.03 | % | 0.71 | % | 0.45 | % | 0.57 | % | ||||||||||
| NPLs as % of total loans | 2.38 | % | 2.85 | % | 2.21 | % | 2.13 | % | 1.58 | % | ||||||||||
| NPAs as % of total assets | 1.46 | % | 1.79 | % | 1.46 | % | 1.35 | % | 1.02 | % | ||||||||||
| Allowance for loan losses as % of NPLs | 69 | % | 61 | % | 81 | % | 86 | % | 115 | % | ||||||||||
| Allowance for loan losses as % of total loans | 1.64 | % | 1.74 | % | 1.79 | % | 1.83 | % | 1.81 | % | ||||||||||
| Special mention loans | 23,026 | 24,099 | 27,050 | 63,588 | 37,901 | |||||||||||||||
| Substandard / doubtful loans | 93,989 | 103,825 | 113,927 | 114,855 | 132,053 | |||||||||||||||
| (2) The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income. As in the case of net interest income, generally, net interest income as utilized in calculating the efficiency ratio is typically expressed on a tax-equivalent basis. Moreover, most institutions, in calculating the efficiency ratio, also adjust both noninterest expense and noninterest income to exclude from these items (as calculated under generally accepted accounting principles) certain component elements, such as non-recurring charges, other real estate expense and amortization of intangibles (deducted from non interest expense) and security transactions and other non-recurring items (excluded from non interest income). We follow these practices. | ||||||||||||||||||||
| (3) Provident Bank provides supplemental reporting of Non-GAAP tangible equity ratios as management believes this information is useful to investors. | ||||||||||||||||||||
| The following table shows the reconciliation of tangible equity and the tangible equity ratio: | ||||||||||||||||||||
| 09/30/11 | 06/30/11 | 03/31/11 | 12/31/10 | 09/30/10 | ||||||||||||||||
| Total Assets | $ | 3,137,402 | $ | 2,976,057 | $ | 2,919,291 | $ | 2,940,513 | $ | 3,021,025 | ||||||||||
| Goodwill and other amortizable intangibles | (165,490 | ) | (165,828 | ) | (163,718 | ) | (164,090 | ) | (164,501 | ) | ||||||||||
| Tangible Assets | $ | 2,971,912 | $ | 2,810,229 | $ | 2,755,573 | $ | 2,776,423 | $ | 2,856,524 | ||||||||||
| Stockholders' equity | 431,134 | 429,037 | 420,269 | 419,642 | 430,955 | |||||||||||||||
| Goodwill and other amortizable intangibles | (165,490 | ) | (165,828 | ) | (163,718 | ) | (164,090 | ) | (164,501 | ) | ||||||||||
| Tangible Stockholders' equity | $ | 265,644 | $ | 263,209 | $ | 256,551 | $ | 255,552 | $ | 266,454 | ||||||||||
| Outstanding Shares | 37,864,008 | 38,005,866 | 38,072,942 | 38,198,686 | 38,262,288 | |||||||||||||||
| Tangible capital as a % of tangible assets (consolidated) | 8.94 | % | 9.37 | % | 9.31 | % | 9.20 | % | 9.33 | % | ||||||||||
| Tangible book value per share | $ | 7.02 | $ | 6.93 | $ | 6.74 | $ | 6.69 | $ | 6.96 | ||||||||||
Contact Information:
PROVIDENT BANK CONTACT:
Paul A. Maisch
EVP & Chief Financial Officer
Miranda Grimm
FVP & Controller
845.369.8040