SOURCE: Provident NY Bancorp

Provident NY Bancorp

October 29, 2013 19:09 ET

Provident New York Bancorp Announces Fourth Quarter and Fiscal Year 2013 Earnings

2013 Performance Reflects Strong Loan Volume, Improved Efficiency and Positive Credit Quality Trends

MONTEBELLO, NY--(Marketwired - Oct 29, 2013) - Provident New York Bancorp (NYSE: PBNY), the parent company of Provident Bank, today announced fourth quarter and full year results for the period ended September 30, 2013. Net income for the quarter was $5.3 million, or $0.12 per diluted share, compared to net income of $2.3 million, or $0.06 per diluted share for the same quarter last year; and $6.4 million, or $0.15 per diluted share for the linked quarter ended June 30, 2013. For the year ended September 30, 2013 net income was $25.3 million, or $0.58 per diluted share, compared to net income of $19.9 million, or $0.52 per diluted share for the fiscal year ended September 30, 2012.

Net income for the fourth quarter and fiscal year 2013 was impacted by merger-related expenses associated with the Sterling Bancorp transaction and a charge for asset write-downs which totaled $1.3 million and $3.3 million, respectively. Excluding the impact of these expenses, net income for the fourth quarter was $6.1 million, or $0.14 per diluted share; and net income for fiscal 2013 was $27.6 million, or $0.63 per diluted share. See the reconciliation of these non-GAAP measures on page 12.

Results for the fourth quarter and fiscal year 2013 include an increase in interest expense due to the $100 million senior notes offering completed on July 2, 2013. The senior notes offering was completed in connection with the pending merger with Sterling Bancorp. Interest expense on the senior notes was $1.4 million in the fourth fiscal quarter.

President's Comments
Jack Kopnisky, President and CEO, commented: "We continued to successfully execute our strategy and deliver results in fiscal 2013. For the year, excluding the impact of merger-related expenses and a charge for asset write-downs, our net income reached $27.6 million and our diluted earnings per share were $0.63. These results represent growth in net income of 12.9% as compared to fiscal 2012. Year-over-year, net gains on sale of securities decreased by $2.9 million, net of tax, further demonstrating the positive momentum in our growth and profitability.

Our commercial banking teams continued to deliver results as demonstrated by our strong origination volumes. For fiscal 2013, our relationship teams generated $1.2 billion of new loan volume, which represents growth of 48.2% over fiscal 2012. Total outstanding loan balances grew by $293 million reaching $2.4 billion at September 30, 2013, which represents year-over-year growth of 13.8%. We continued to focus on growing our commercial loans; in fiscal 2013, our commercial and industrial and commercial real estate portfolios grew by $301.0 million, which represents growth of 21% over prior year balances.

Our core operating efficiency is improving as we continue to make progress towards achieving the long-term efficiency goals we have previously outlined. For the fiscal year 2013, our core total revenues grew by 11.5% while our core non-interest expense grew by 2.0%. Our core operating efficiency ratio was 62.6% for the fiscal year 2013, which represents an improvement of 579 basis points relative to 2012.

Our credit quality has continued to show positive trends across all of our portfolios. Year-over-year, our non-performing loans decreased $12.9 million to $26.9 million and our criticized and classified loans decreased by $56.3 million to $74.8 million. Our credit quality ratios improved significantly during the year; our ratio of non-performing loans to total loans declined by 76 basis points to 1.12% and our allowance for loan losses to non-performing loans increased to 107.3%. The trends in the overall risk ratings of our commercial loan portfolio continued to improve.

Our capital and liquidity position remain strong. Our Tier 1 leverage ratio was approximately 9.33% at Provident Bank and our consolidated tangible equity to tangible assets ratio was 8.09%. We have ample capital and liquidity to support our growth and execute our strategy.

As we announced on October 21, we have received all required regulatory and shareholder approvals for our merger with Sterling Bancorp and anticipate we will complete the merger after the close of business on October 31, 2013. We will have completed the transaction in approximately six months from the announcement date, which is a significant accomplishment. We are ready to move forward in building a high performing combined institution that focuses on delivering superior service to commercial and consumer clients and accelerates the growth, profitability and execution of our strategy."

Key Highlights

  • Total loan originations were $1.2 billion for fiscal 2013. In the fourth quarter originations were $317.9 million compared to $347.7 million in the linked quarter, and $205.7 million for the fourth fiscal quarter of 2012.
  • Total loans reached $2.4 billion at September 30, 2013, a $76.4 million increase compared to June 30, 2013, and a $293.4 million year-over-year increase.
  • Tax equivalent net interest margin was 3.23% for the fourth quarter of fiscal 2013 compared to 3.46% in the linked quarter and 3.38% in the fourth quarter of fiscal 2012. The decline in net interest margin was principally due to interest expense on the senior notes. For the fiscal year 2013, tax equivalent net interest margin was 3.37%.
  • The allowance for loan losses increased to $28.9 million at September 30, 2013 and the allowance as a percentage of non-performing loans increased to 107.3% from 90.2% at June 30, 2013. The allowance for loan losses as a percentage of total loans was 1.20% at September 30, 2013, compared to 1.21% in the linked quarter. The allowance ratios are inclusive of acquired Gotham loans that were recorded at fair value at acquisition date.
  • Non-performing loans decreased from $39.8 million at September 30, 2012, to $26.9 million at September 30, 2013. 
  • Provision for loan losses for the quarter was $2.7 million and decreased by $1.2 million compared to the linked quarter. For the fourth quarter of fiscal 2012, the provision for loan losses was $3.5 million.
  • For the fiscal year 2013, the core operating efficiency ratio was 62.6%. The core operating efficiency ratio in the fourth fiscal quarter of 2013 was 63.6% compared to 59.1% in the linked quarter and 72.0% for the fourth fiscal quarter of 2012. See the reconciliation of this non-GAAP financial measure on page 11.

Net Interest Income and Margin
Fourth quarter fiscal 2013 compared to the fourth quarter fiscal 2012
Net interest income was $28.1 million for the fourth quarter of fiscal 2013, up $2.9 million compared to the fourth quarter of fiscal 2012 due mainly to higher average loan volumes. Reflecting the current interest rate environment, the tax-equivalent yield on investments decreased nine basis points and yield on loans declined 27 basis points. As a result, the yield on interest-earning assets declined 12 basis points to 3.89% on a tax equivalent basis for the fourth quarter of fiscal 2013. The cost of total deposits decreased 12 basis points to 15 basis points from the year ago quarter, mainly due to the maturity of higher priced certificates of deposit, which ran-off or re-priced to current market interest rates. The cost of borrowings decreased 77 basis points to 2.88%, as a higher portion of borrowings were overnight borrowings in the fourth quarter of 2013; however, total interest expense on borrowings increased by $1.7 million, mainly as a result of the senior notes offering. The net interest margin on a tax-equivalent basis was 3.23% compared to 3.38% for the same period a year ago. 

Fourth quarter fiscal 2013 compared with linked quarter ended June 30, 2013
Net interest income for the quarter ended September 30, 2013 declined $209 thousand to $28.1 million, compared to $28.3 million for the linked quarter ended June 30, 2013. The decline in net interest income for the fourth quarter was due to a $1.4 million increase in interest expense incurred in connection with the senior notes. Interest income on loans increased $1.1 million as a result of strong loan growth during the quarter. Interest expense on deposits continued to decline; inclusive of non-interest bearing deposits, cost of deposits on total deposits was 15 basis points, compared to 17 basis points for the third fiscal quarter of 2013. Yield on loans decreased 10 basis points to 4.70% reflecting current market conditions and a reduction of $273 thousand, or four basis points, in the accretion of the Gotham loan discount. The yield on interest-earning assets decreased eight basis points to 3.89% from 3.97% in the linked quarter. Tax-equivalent net interest margin decreased to 3.23% from 3.46% in the linked quarter.

Non-interest Income
Fourth quarter fiscal 2013 compared with fourth quarter fiscal 2012
Non-interest income declined $2.4 million to $6.6 million for the fourth quarter of fiscal 2013 driven by a decrease in net gain on sales of securities of $1.4 million and an aggregate decrease in investment management fees and title insurance fees of $364 thousand. In fiscal 2012 we decided to sell the assets of our former subsidiaries that were active in title insurance and investment management businesses.

Fourth quarter fiscal 2013 compared with linked quarter ended June 30, 2013
Non-interest income increased $19 thousand to $6.6 million for the fourth fiscal quarter of 2013 mainly due to an increase in deposit fees and service charges. Partially offsetting this increase was lower net gain on sales of securities, which declined $144 thousand. In addition, gain on sale of loans decreased by $132 thousand. During fiscal 2013 we invested in a new title insurance joint venture and deployed an investment management initiative which gained momentum during the year. As a result, aggregate title insurance and investment management fees increased $66 thousand on aggregate compared to the linked quarter results.

Non-interest Expense
Fourth quarter fiscal 2013 compared with fourth quarter fiscal 2012
Non-interest expense decreased $5.4 million to $23.4 million relative to the fourth quarter of fiscal 2012, principally the result of a decrease of $4.2 million in merger-related expenses and a decrease of $464 thousand in compensation and benefits. The merger-related expenses recorded in the fourth fiscal quarter of 2012 were incurred in connection with the acquisition of Gotham Bank.

Fourth quarter fiscal 2013 compared with the linked quarter ended June 30, 2013
Non-interest expense increased $1.6 million compared to the linked quarter to $23.4 million. Compensation and benefits increased $1.1 million due to several factors, which included an increase in the accrual for bonus compensation, an increase in temporary personnel and overtime expense associated with merger and non-merger related projects and a decrease in the amount of deferred loan origination costs, which are recognized as an adjustment to yield over the life of the loan. Other real estate owned expenses increased by $418 thousand due to write-downs to fair value upon receipt of updated property appraisals. In addition, other expense increased $672 thousand in the period due principally to a write-down of $228 thousand on two branch properties, a charge of $152 thousand to increase the reserve for off-balance sheet commitments and a $134 thousand write-down associated with the transfer of loan servicing to an outside vendor. 

Income Taxes
In the fourth quarter of fiscal 2013, the Company recorded income tax expense at 38.3% compared to an estimated effective tax rate of 30.8% in the linked quarter and (14.1)% for the same period in fiscal 2012. The increase in the estimated effective tax rate in the fourth quarter of fiscal 2013 was due to an increase in merger-related expenses incurred in fiscal 2013 that will be fully non-tax deductible. The effective tax rate for fiscal 2013 was 31.1%.

Credit Quality
Non-performing loans decreased $12.9 million to $26.9 million at September 30, 2013 compared to $39.8 million at September 30, 2012. During the fiscal year we exited several large credit relationships which contributed to the decline. Net charge-offs for the fourth quarter were $2.2 million compared to $3.1 million in the linked quarter. Non-performing loans at September 30, 2013 were $4.6 million lower than the prior quarter end. The allowance for loan losses at September 30, 2013 was $28.9 million, which represented 107.3% of non-performing loans and 1.20% of our total loan portfolio. This compares to the linked quarter, in which the allowance for loan losses was $28.4 million, which represented 90.2% of non-performing loans and 1.21% of our total loan portfolio. The increase in the allowance for loan losses was related to the higher balance of loans outstanding at September 30, 2013. The allowance for loan losses to total loans, excluding loans acquired in the Gotham transaction that were recorded at fair value at the acquisition date and continue to carry no allowance was 1.27% and 1.30%, at September 30, 2013 and June 30, 2013, respectively. Please refer to the Company's reconciliation of this non-GAAP measure on page 10.

During the quarter, several properties were transferred to other real estate owned ("OREO") which increased the balance by $1.6 million to $6.0 million. In addition, there were two branch properties that were formerly held as premises and equipment that were transferred to OREO as discussed above in non-interest expense.

Key Balance Sheet Changes Year-to-Date

  • Total assets at September 30, 2013 were a record at $4.05 billion, increasing $26.2 million or 0.7% compared to September 30, 2012.
  • Loans at September 30, 2013 increased $293.4 million or 13.8% on an annual basis compared to September 30, 2012.
  • Commercial real estate and commercial and industrial loans increased $301.0 million or 21.3% compared to September 30, 2012.
  • Acquisition development and construction loans declined to $102.5 million at September 30, 2013 from $144.1 million at September 30, 2012.
  • Securities, excluding FHLB Stock, at September 30, 2013 increased $55.1 million as compared to September 30, 2012. As of September 30, 2013, securities represented 29.8% of total assets compared to 28.7% at September 30, 2012. The increase in securities was the result of investing the net proceeds raised in the senior notes offering.
  • Deposits decreased $148.9 million between September 30, 2012 and September 30, 2013, mainly the result of a decrease in municipal deposits of $144.7 million compared to September 30, 2012. Non-municipal deposits were relatively unchanged between September 30, 2013 and 2012; however, non-interest bearing and interest bearing demand deposits increased $80.1 million, which represents year-over-year growth of approximately 10%.

Capital
Provident Bank remained well capitalized at September 30, 2013 with a Tier 1 leverage ratio of 9.3% based on period end assets. The Company's stockholders' equity decreased $8.3 million from September 30, 2012, to $482.9 million at September 30, 2013. The decline in stockholders' equity was the result of a net $26.5 million decline in the fair value of available for sale securities during the fiscal year. The two principal offsetting factors to this decline were net earnings less dividends declared of $13.3 million and an increase in accumulated other comprehensive income associated with benefit plans of $4.3 million. Dividends declared were $0.12 per common share for the fourth fiscal quarter of 2013 and $0.30 per common share for the fiscal year ended September 30, 2013. On September 26, 2013, due to the pending merger with Sterling, we declared a quarterly dividend of $0.06 per common share that would have been regularly declared and paid in in the calendar fourth quarter. 

Tangible book value per share decreased by $0.18 to $7.08 at September 30, 2013 from $7.26 at September 30, 2012. For the quarter ended September 30, 2013, the basic and diluted weighted average common shares outstanding increased to 43.7 million and 43.9 million, respectively, compared to 41.1 million, basic and diluted shares, for the quarter ended September 30, 2012. The increase in basic and diluted shares is mainly the result of the issuance of 6.2 million shares of common stock in August 2012 in connection with the acquisition of Gotham Bank. These shares were outstanding for the entire fourth quarter ended September 30, 2013 and partially in the quarter ended September 30, 2012.

About Provident New York Bancorp
Headquartered in Montebello, N.Y., Provident New York Bancorp is the holding company for Provident Bank, a growing financial services firm with $4.0 billion in assets that specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City area through teams of dedicated and experienced relationship managers. Provident Bank offers a complete line of commercial, business, and consumer banking products and services.
For more information, visit the Provident Bank 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.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. In addition to factors previously disclosed in reports filed with the Securities and Exchange Commission, the following factors, among others, could cause actual results to differ materially from forward-looking statements: difficulties and delays in integrating the Provident and Sterling businesses or fully realizing cost savings and other benefits; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; including as a result of the financial performance of Sterling prior to closing; the reaction to the Merger of the companies' customers, employees and counterparties; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Actual results or future events could differ, possibly materially, from those that we anticipated in our forward-looking statements, and future results could differ materially from our historical performance. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2013. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the 10-K to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.

   
Provident New York Bancorp and Subsidiaries  
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION  
(unaudited, in thousands, except share and per share data)  
                   
    9/30/2013     9/30/2012     6/30/2013  
Assets:                        
Cash and due from banks   $ 113,090     $ 437,982     $ 109,166  
Investment securities     1,208,392       1,153,248       1,065,724  
HVIA assets held for sale     --       4,550       --  
Loans held for sale     1,011       7,505       1,539  
Loans:                        
  Residential mortgage     400,009       350,022       369,613  
  Commercial real estate     1,277,037       1,072,504       1,210,248  
  Commercial and industrial     439,787       343,307       453,145  
  Acquisition, development and construction     102,494       144,061       106,198  
  Consumer     193,571       209,578       197,330  
    Total loans, gross     2,412,898       2,119,472       2,336,534  
  Allowance for loan losses     (28,877 )     (28,282 )     (28,374 )
    Total loans, net     2,384,021       2,091,190       2,308,160  
Federal Home Loan Bank stock, at cost     24,312       19,249       28,368  
Premises and equipment, net     36,520       38,483       37,473  
Goodwill     163,117       163,247       163,117  
Other amortizable intangibles     5,891       7,164       6,201  
Bank owned life insurance     60,914       59,017       60,412  
Other real estate owned     6,022       6,403       4,376  
Other assets     45,882       34,944       39,893  
    Total assets   $ 4,049,172     $ 4,022,982     $ 3,824,429  
Liabilities:                        
Deposits   $ 2,962,294     $ 3,111,151     $ 2,739,214  
Borrowings     560,986       345,176       552,805  
Mortgage escrow funds     12,646       11,919       25,915  
Other liabilities     30,380       63,614       26,330  
    Total liabilities     3,566,306       3,531,860       3,344,264  
Stockholders' equity     482,866       491,122       480,165  
    Total liabilities and stockholders' equity   $ 4,049,172     $ 4,022,982     $ 3,824,429  
                         
Shares of common stock outstanding at period end     44,351,046       44,173,470       44,353,276  
Book value per share   $ 10.89     $ 11.12     $ 10.83  
Tangible book value per share     7.08       7.26       7.01  
                         
                         
                         
Provident New York Bancorp and Subsidiaries  
CONSOLIDATED CONDENSED STATEMENTS OF INCOME  
(unaudited, in thousands, except share and per share data)  
           
    For the Quarter Ended   For the Twelve Months Ended  
    9/30/2013   6/30/2013   9/30/2012   9/30/2013   9/30/2012  
Interest and dividend income:                                
  Loans and loan fees   $ 27,723   $ 26,638   $ 24,396   $ 107,810   $ 91,010  
  Securities taxable     4,748     4,189     3,909     17,509     16,538  
  Securities non-taxable     1,235     1,500     1,543     5,682     6,497  
  Other earning assets     197     266     265     1,060     992  
  Total interest income     33,903     32,593     30,113     132,061     115,037  
Interest expense:                                
  Deposits     1,051     1,151     1,789     5,923     5,581  
  Borrowings     4,744     3,125     3,085     13,971     12,992  
Total interest expense     5,795     4,276     4,874     19,894     18,573  
Net interest income     28,108     28,317     25,239     112,167     96,464  
Provision for loan losses     2,700     3,900     3,500     12,150     10,612  
Net interest income after provision for loan losses     25,408     24,417     21,739     100,017     85,852  
Non-interest income:                                
  Deposit fees and service charges     2,835     2,615     3,065     10,964     11,377  
  Net gain on sales of securities     1,801     1,945     3,152     7,391     10,452  
  Other than temporary loss on securities     --     --     (3 )   (32 )   (47 )
  Investment management fees     673     613     776     2,413     3,143  
  Title insurance fees     71     65     332     395     1,106  
  Bank owned life insurance     502     496     512     1,998     2,050  
  Gain on sale of loans     297     429     429     1,979     1,897  
  Loss on sale of HVIA     --     --     (135 )   --     (135 )
  Other     421     418     898     2,584     2,309  
Total non-interest income     6,600     6,581     9,026     27,692     32,152  
Non-interest expense:                                
  Compensation and benefits     12,409     11,320     12,873     47,833     46,038  
  Stock-based compensation plans     513     547     302     2,239     1,187  
  Occupancy and office operations     3,766     3,423     3,959     14,953     14,457  
  Merger-related expenses     714     1,516     4,928     2,772     5,925  
  Advertising and promotion     416     307     369     1,502     1,849  
  Professional fees     740     526     1,136     3,393     4,247  
  Data and check processing     460     588     715     2,520     2,802  
  Amortization of intangible assets     310     337     334     1,296     1,245  
  FDIC insurance and regulatory assessments     664     875     843     3,010     3,096  
  ATM/debit card expense     400     465     438     1,722     1,711  
  Other real estate owned expense     390     (28 )   573     1,562     1,618  
  Other     2,585     1,913     2,314     8,239     7,782  
Total non-interest expense     23,367     21,789     28,784     91,041     91,957  
Income before income tax expense     8,641     9,209     1,981     36,668     26,047  
Income tax expense     3,312     2,833     (280 )   11,414     6,159  
Net income   $ 5,329   $ 6,376   $ 2,261   $ 25,254   $ 19,888  
  Basic earnings per share   $ 0.12   $ 0.15   $ 0.06   $ 0.58   $ 0.52  
  Diluted earnings per share     0.12     0.15     0.06     0.58     0.52  
  Dividends declared per share     0.12     0.06     0.06     0.30     0.24  
Weighted average common shares:                                
  Basic     43,742,903     43,801,867     41,054,458     43,722,313     38,227,653  
  Diluted     43,859,834     43,906,158     41,099,237     43,763,628     38,248,046  
                                   
                                   
                                   
Provident New York Bancorp and Subsidiaries
SELECTED FINANCIAL DATA
(unaudited, in thousands, except share and per share data)
     
    As of and for the Quarter Ended
End of Period   9/30/2013   6/30/2013   3/31/2013   12/31/2012   9/30/2012
Total assets   $ 4,049,172   $ 3,824,429   $ 3,710,440   $ 3,789,514   $ 4,022,982
Securities available for sale     954,393     889,747     945,678     991,298     1,010,872
Securities held to maturity     253,999     175,977     183,535     139,874     142,376
Loans, gross 1     2,412,898     2,336,534     2,204,555     2,193,129     2,119,472
Goodwill     163,117     163,117     163,117     163,247     163,247
Other amortizable intangibles     5,891     6,201     6,538     6,926     7,164
Deposits     2,962,294     2,739,214     2,799,658     2,904,384     3,111,151
Municipal deposits (included above)     757,066     465,566     537,070     538,212     901,739
Borrowings     560,986     552,805     367,976     345,411     345,176
Stockholders' equity     482,866     480,165     494,711     493,883     491,122
Tangible equity     313,858     310,847     325,056     323,710     320,711
Average Balances                              
Total assets   $ 3,907,960   $ 3,745,356   $ 3,804,660   $ 3,792,201   $ 3,451,055
Loans, gross:                              
Residential mortgage     379,640     366,823     360,840     344,064     352,724
Commercial real estate     1,247,055     1,175,094     1,138,333     1,107,779     989,349
Commercial and industrial     443,349     398,622     368,896     354,137     263,922
Acquisition, development and construction     104,856     114,286     122,937     138,881     156,726
Consumer     194,718     199,861     203,492     208,064     210,650
Loans, total 1     2,369,618     2,254,686     2,194,498     2,152,925     1,973,371
Securities (taxable)     963,949     909,312     967,889     954,372     841,373
Securities (non-taxable)     157,480     184,325     181,803     174,201     181,540
Total earning assets     3,529,321     3,378,655     3,403,209     3,380,875     3,070,315
Deposits:                              
Non-interest bearing demand     669,067     625,684     641,194     649,077     592,962
Interest bearing demand     426,602     461,390     508,129     469,180     398,493
Savings (including mortgage escrow funds)     601,272     581,106     575,380     531,107     539,904
Money market     715,351     777,857     877,101     908,262     756,655
Certificates of deposit     335,616     338,017     355,917     380,244     303,788
Total deposits and mortgage escrow     2,747,908     2,784,054     2,957,721     2,937,870     2,591,802
Borrowings     653,147     440,579     345,717     345,951     336,217
Equity     478,491     494,049     492,725     492,506     475,652
Tangible equity     309,327     324,540     322,683     319,783     308,029
Condensed Tax Equivalent Income Statement                              
Interest and dividend income   $ 33,903   $ 32,593   $ 32,420   $ 33,145   $ 30,113
Tax equivalent adjustment*     666     808     802     785     830
Interest expense     5,795     4,276     4,601     5,222     4,874
Net interest income (tax equivalent)     28,774     29,125     28,621     28,708     26,069
Provision for loan losses     2,700     3,900     2,600     2,950     3,500
Net interest income after provision for loan losses     26,074     25,225     26,021     25,758     22,569
Non-interest income     6,600     6,581     6,852     7,659     9,026
Non-interest expense     23,367     21,789     23,339     22,546     28,784
Income before income tax expense     9,307     10,017     9,534     10,871     2,811
Income tax expense (tax equivalent)*     3,978     3,641     3,005     3,851     550
Net income   $ 5,329   $ 6,376   $ 6,529   $ 7,020   $ 2,261
 
1 Does not reflect allowance for loan losses of $28,877, $28,374, $27,544, $28,114 and $28,282.
*Tax exempt income assumed at a statutory 35% federal tax rate.
 
 
 
Provident New York Bancorp and Subsidiaries  
SELECTED FINANCIAL RATIOS  
(unaudited, in thousands, except share and per share data)  
   
    For the Quarter Ended  
Per Share Data   9/30/2013       6/30/2013       3/31/2013     12/31/2012     9/30/2012  
Basic earnings per share   $ 0.12       $ 0.15       $ 0.15     $ 0.16     $ 0.06  
Diluted earnings per share     0.12         0.15         0.15       0.16       0.06  
Dividends declared per share     0.12         0.06         0.06       0.06       0.06  
Tangible book value per share     7.08         7.01         7.33       7.30       7.26  
Shares of common stock outstanding     44,351,046         44,353,276         44,353,276       44,348,787       44,173,470  
Basic weighted average common shares outstanding     43,742,903         43,801,867         43,743,640       43,637,315       41,054,458  
Diluted weighted average common shares outstanding     43,859,834         43,906,158         43,848,486       43,721,091       41,099,237  
Performance Ratios (annualized)                                            
Return on average assets     0.54 %       0.68 %       0.70 %     0.73 %     0.26 %
Return on average equity     4.42 %       5.18 %       5.37 %     5.65 %     1.89 %
Return on average tangible equity 1     6.83 %       7.88 %       8.21 %     8.71 %     2.92 %
Core operating efficiency 1     63.6 %       59.1 %       64.6 %     62.9 %     72.0 %
Analysis of Net Interest Income                                            
Yield on loans     4.70 %       4.80 %       4.93 %     5.04 %     4.97 %
Yield on investment securities - tax equivalent2     2.35 %       2.38 %       2.32 %     2.29 %     2.44 %
Yield on earning assets - tax equivalent2     3.89 %       3.97 %       3.96 %     3.98 %     4.01 %
Cost of deposits     0.15 %       0.17 %       0.22 %     0.28 %     0.27 %
Cost of borrowings     2.88 %       2.84 %       3.49 %     3.58 %     3.65 %
Cost of interest bearing liabilities     0.84 %       0.66 %       0.70 %     0.79 %     0.83 %
Net interest rate spread - tax equivalent basis2     3.05 %       3.31 %       3.26 %     3.19 %     3.18 %
Net interest margin - tax equivalent basis2     3.23 %       3.46 %       3.41 %     3.37 %     3.38 %
Capital                                            
Tier 1 leverage ratio - Bank only     9.33 %       8.49 %       8.62 %     8.23 %     7.49 %
Tier 1 risk-based capital - Bank only   $ 363,274   3   $ 311,507   3   $ 304,696     $ 297,089     $ 289,441  
Total risk-based capital - Bank only     392,376   3     340,077   3     332,447       325,410       317,929  
Tangible equity as a % of tangible assets - consolidated 1     8.09 %       8.50 %       9.18 %     8.94 %     8.32 %
                                             
Asset Quality                                            
Non-performing loans (NPLs) non-accrual   $ 22,807       $ 27,244       $ 27,019     $ 27,730     $ 35,444  
Non-performing loans (NPLs) still accruing     4,099         4,216         4,257       5,823       4,370  
Other real estate owned     6,022         4,376         5,486       7,053       6,403  
Non-performing assets (NPAs)     32,928         35,836         36,762       40,606       46,217  
Net charge-offs     2,197         3,070         3,170       3,118       2,805  
Net charge-offs as a % of average loans (annualized)     0.37 %       0.54 %       0.58 %     0.58 %     0.57 %
NPLs as a % of total loans     1.12 %       1.35 %       1.42 %     1.53 %     1.88 %
NPAs as a % of total assets     0.81 %       0.94 %       0.99 %     1.07 %     1.15 %
Allowance for loan losses as a % of NPLs     107.3 %       90.2 %       88.1 %     83.8 %     71.0 %
Allowance for loan losses as a % of total loans     1.20 %       1.21 %       1.25 %     1.28 %     1.33 %
Allowance for loan losses as a % of total loans, excluding Gotham loans1     1.27 %       1.30 %       1.36 %     1.41 %     1.47 %
Special mention loans   $ 13,530       $ 24,327       $ 41,778     $ 29,755     $ 42,422  
Substandard / doubtful loans     61,230         62,165         70,688       83,109       88,674  
 
1 See reconciliation of non-GAAP measure on following page.
2 Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate of 35% for all periods presented.
3 Represents preliminary results for the quarter ended September 30, 2013.
 
 
 
Provident New York Bancorp and Subsidiaries  
NON-GAAP FINANCIAL MEASURES  
(unaudited, in thousands, except share and per share data)  
       
    As of and for the Quarter Ended  
    9/30/2013   6/30/2013   3/31/2013   12/31/2012   9/30/2012  
The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors.  
The following table shows the reconciliation of stockholders' equity to tangible equity and the tangible equity ratio:  
Total assets   $ 4,049,172   $ 3,824,429   $ 3,710,440   $ 3,789,514   $ 4,022,982  
Goodwill and other amortizable intangibles     (169,008 )   (169,318 )   (169,655 )   (170,173 )   (170,411 )
Tangible assets     3,880,164     3,655,111     3,540,785     3,619,341     3,852,571  
Stockholders' equity     482,866     480,165     494,711     493,883     491,122  
Goodwill and other amortizable intangibles     (169,008 )   (169,318 )   (169,655 )   (170,173 )   (170,411 )
Tangible stockholders' equity     313,858     310,847     325,056     323,710     320,711  
Shares of common stock outstanding at period end     44,351,046     44,353,276     44,353,276     44,348,787     44,173,470  
Tangible equity as a % of tangible assets     8.09 %   8.50 %   9.18 %   8.94 %   8.32 %
Tangible book value per share   $ 7.08   $ 7.01   $ 7.33   $ 7.30   $ 7.26  
The Company believes that tangible equity is useful as a tool to help assess a company's capital position.  
   
The following table shows the reconciliation of return on average tangible equity:  
   
Average stockholders' equity   $ 478,491   $ 494,049   $ 492,725   $ 492,506   $ 475,652  
Average goodwill and other amortizable intangibles     (169,164 )   (169,509 )   (170,042 )   (172,723 )   (167,623 )
Average tangible stockholders' equity     309,327     324,540     322,683     319,783     308,029  
Net income     5,329     6,376     6,529     7,020     2,261  
Net income, if annualized     21,142     25,574     26,479     27,851     8,995  
Return on average tangible equity     6.83 %   7.88 %   8.21 %   8.71 %   2.92 %
The Company believes that the return on average tangible stockholders' equity is useful as a tool to help asses a company's use of tangible equity.  
   
The following table shows the reconciliation of the allowance for loan losses to total loans and to total loans excluding Gotham loans:  
   
Total loans   $ 2,412,898   $ 2,336,534   $ 2,204,555   $ 2,193,129   $ 2,119,472  
Gotham loans     (133,493 )   (152,825 )   (176,383 )   (194,518 )   (201,794 )
Total loans, excluding Gotham loans     2,279,405     2,183,709     2,028,172     1,998,611     1,917,678  
Allowance for loan losses     28,877     28,374     27,544     28,114     28,282  
Allowance for loan losses to total loans     1.20 %   1.21 %   1.25 %   1.28 %   1.33 %
Allowance for loan losses to total loans, excluding Gotham loans     1.27 %   1.30 %   1.36 %   1.41 %   1.47 %
As required by GAAP, the Company recorded at fair value the loans acquired in the Gotham transaction. These loans carry no allowance for loan losses for the periods reflected above.  
   
   
   
Provident New York Bancorp and Subsidiaries  
NON-GAAP FINANCIAL MEASURES  
(unaudited, in thousands, except share and per share data)  
       
    As of and for the Quarter Ended  
    9/30/2013   6/30/2013   3/31/2013   12/31/2012   9/30/2012  
The following table shows the reconciliation of the quarterly core operating efficiency ratio:  
Net interest income   $ 28,108   $ 28,317   $ 27,819   $ 27,923   $ 25,239  
Non-interest income     6,600     6,581     6,852     7,659     9,026  
Total net revenues     34,708     34,898     34,671     35,582     34,265  
Tax equivalent adjustment on securities interest income     666     808     802     785     830  
Net gain on sales of securities     (1,801 )   (1,945 )   (2,229 )   (1,416 )   (3,152 )
Other than temporary loss on securities     --     --     7     25     3  
Other, (other gains and fair value loss on interest rate caps)     81     --     --     (4 )   (64 )
Core total revenues     33,654     33,761     33,251     34,972     31,882  
Non-interest expense     23,367     21,789     23,339     22,546     28,784  
Merger-related expenses     (714 )   (1,516 )   (542 )   --     (4,928 )
Charge for asset write-downs     (564 )   --     --     --     --  
Other real estate owned expense     (390 )   28     (915 )   (285 )   (573 )
Amortization of intangible assets     (310 )   (337 )   (388 )   (261 )   (334 )
Core non-interest expense     21,389     19,964     21,494     22,000     22,949  
Core efficiency ratio     63.6 %   59.1 %   64.6 %   62.9 %   72.0 %
                                 
The following table shows the reconciliation of the full year core operating efficiency ratio:  
   
    For the Twelve Months Ended  
    9/30/2013     9/30/2012  
                 
Net interest income   $ 112,167     $ 96,464  
Non-interest income     27,692       32,152  
Total net revenues     139,859       128,616  
Tax equivalent adjustment on securities interest income     3,060       3,498  
Net gain on sales of securities     (7,391 )     (10,452 )
Other than temporary loss on securities     32       47  
Other, (other gains and fair value loss on interest rate caps)     77       (12 )
Core total revenues     135,637       121,697  
Non-interest expense     91,041       91,957  
Merger-related expenses     (2,772 )     (5,925 )
Charge for asset write-downs     (564 )     --  
Other real estate owned expense     (1,562 )     (1,618 )
Amortization of intangible assets     (1,296 )     (1,245 )
Core non-interest expense     84,847       83,169  
Core efficiency ratio     62.6 %     68.3 %
                 

The core efficiency ratio reflects total revenues inclusive of the tax equivalent adjustment on municipal securities and excludes securities gains, other than temporary impairments and the other adjustments shown above. Core non-interest expense is adjusted to exclude the effect of merger-related expenses, non-recurring charges, other real estate expense and amortization of intangible assets. The Company believes this non-GAAP information provides useful information to users to assess the Company's core operations.

       
Provident New York Bancorp and Subsidiaries  
NON-GAAP FINANCIAL MEASURES  
(unaudited, in thousands, except share and per share data)  
       
    For the Quarter Ended  
    9/30/2013   6/30/2013   3/31/2013   12/31/2012   9/30/2012  
The following table shows the reconciliation of net income and earnings per share excluding merger-related expense and charge for asset write-downs:  
Income before income tax expense   $ 8,641   $ 9,209   $ 8,732   $ 10,086   $ 1,981  
Income tax expense     3,312     2,833     2,203     3,066     (280 )
Net income     5,329     6,376     6,529     7,020     2,261  
                                 
Merger-related expenses     714     1,516     542     --     4,928  
Income tax benefit     274     466     137     --     697  
After-tax merger-related expenses     440     1,050     405     --     4,231  
                                 
Charge for asset write-downs     564     --     --     --     --  
Income tax benefit     216     --     --     --     --  
After-tax charge for asset write-downs     348     --     --     --     --  
Net income excluding merger-related expense and charge for asset write-downs   $ 6,117   $ 7,426   $ 6,934   $ 7,020   $ 6,492  
                                 
Diluted weighted average common shares outstanding     43,859,834     43,906,158     43,848,486     43,721,091     41,099,237  
Diluted EPS as reported   $ 0.12   $ 0.15   $ 0.15   $ 0.16   $ 0.06  
Diluted EPS excluding merger-related expenses and charge for asset write-downs     0.14     0.17     0.16     0.16     0.16  
                                 
    For the Twelve Months Ended              
    9/30/2013   9/30/2012              
Income before income tax expense   $ 36,668   $ 26,047                    
Income tax expense     11,414     6,159                    
Net income     25,254     19,888                    
                                 
Merger-related expenses     2,772     5,925                    
Income tax benefit     863     1,401                    
After-tax merger-related expenses     1,909     4,524                    
                                 
Charge for asset write-downs     564     --                    
Income tax benefit     176     --                    
After-tax charge for asset write-downs     388     --                    
Net income excluding merger-related expenses and charge for asset write-downs   $ 27,552   $ 24,412                    
                                 
Diluted weighted average common shares outstanding     43,763,628     38,248,046                    
Diluted EPS as reported   $ 0.58   $ 0.52                    
Diluted EPS excluding merger-related expenses and charge for asset write-downs     0.63     0.64                    
                                 
                                 

Contact Information

  • PROVIDENT NEW YORK BANCORP CONTACT:
    Luis Massiani
    EVP & Chief Financial Officer
    845.369.8040

    Provident New York Bancorp
    400 Rella Boulevard
    Montebello, NY 10901-4243

    T 845.369.8040
    F 845.369.8255

    https://www.providentbanking.com