SOURCE: Provident New York Bancorp

Provident New York Bancorp

October 31, 2011 07:30 ET

Provident New York Bancorp Announces Fourth Quarter and Fiscal 2011 Results

MONTEBELLO, NY--(Marketwire - Oct 31, 2011) - Provident New York Bancorp (NASDAQ: PBNY), the parent company of Provident Bank, today announced fourth-quarter and fiscal year results for the period ended September 30, 2011. Net loss for the quarter was $493,000, or $(0.01) per diluted share, compared to net income of $5.4 million, or $0.14 per diluted share for same quarter last year and net income of $1.9 million, or $0.05 per diluted share for the linked quarter ended June 30, 2011. Net income for fiscal 2011 year-to-date was $11.7 million, or $0.31 per diluted share compared to $20.5 million or $0.54 per diluted share for year-to-date fiscal 2010. As described in more detail below gains on sales of securities and net charge-offs on loans affected results in the current quarter to a greater extent than comparative quarters and in the linked quarter (discussed in more detail in the credit quality section of this release).

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