SOURCE: Provident NY Bancorp

Provident NY Bancorp

April 22, 2013 19:28 ET

Provident New York Bancorp Announces Second Quarter 2013 Earnings of $0.15 per Diluted Share

MONTEBELLO, NY--(Marketwired - Apr 22, 2013) - Provident New York Bancorp (NYSE: PBNY), the parent company of Provident Bank, today announced second quarter results for the period ended March 31, 2013. Net income for the quarter was $6.5 million, or $0.15 per diluted share, compared to net income of $5.7 million, or $0.15 per diluted share for the same quarter last year; and $7.0 million, or $0.16 per diluted share for the linked quarter ended December 31, 2012.

President's Comments
Jack Kopnisky, President and CEO, commented: "We had a solid second quarter. Earnings for the quarter were $6.5 million, a 15% increase compared to the second quarter of 2012. Earnings declined $491 thousand or $0.01 per share compared to the linked quarter, which was mainly the result of merger-related expense and an increase in foreclosed property expense as we continue to reduce non-performing assets.

We continue to focus primarily on serving small-to-middle market clients through a differentiated, team-based distribution strategy. Our pipelines of loans, deposits and fee income opportunities continue to be strong, which is allowing us to diversify our balance sheet and revenue streams and maintain strong momentum in our new and legacy markets.

Our credit quality improved again in the second quarter. Non-performing loans of $31 million at March 31, 2013 decreased $2.3 million compared to the linked quarter. Our ratio of non-performing loans to total loans declined by 147 basis points to 1.42% at March 31, 2013 as compared to the year ago period. Our allowance for loan losses to non-performing loans increased to 88% at March 31, 2013, and the positive trend in the risk ratings of our loan portfolio continued as well.

Our capital and liquidity position remain strong. Our Tier 1 leverage ratio was approximately 8.6% at Provident Bank and our consolidated tangible equity to tangible assets ratio was 9.2%.

We are looking forward to our pending merger with Sterling Bancorp (NYSE: STL), which we announced on April 4, 2013. This merger presents a tremendous opportunity to continue building a high performing institution and is a significant step in our strategy of expanding within the greater New York metropolitan area. We expect the merger will create a larger, more diversified company and will allow us to accelerate the build-out of our differentiated strategy targeting small-to-middle market commercial and consumer clients. The combined business will be a more effective competitor in the marketplace than either company on its own. Sterling Bancorp's established record of growth and profitability will be additive to Provident's growth strategy as we provide continued value for shareholders of both organizations."

 Key Highlights for the Quarter

  • Total loan originations were $253.2 million compared to $291.1 million in the linked quarter, and $166.6 million for the second fiscal quarter of 2012.
  • Total loans reached $2.2 billion at March 31, 2013, an $85.1 million increase compared to September 30, 2012.
  • Tax equivalent net interest margin was 3.41% for the second quarter of fiscal 2013 compared to 3.37% in the linked quarter and 3.57% in the second quarter of fiscal 2012.
  • The allowance for loan losses declined to $27.5 million at March 31, 2013; however, the allowance as a percentage of non-performing loans increased to 88% from 84% at December 31, 2012. The allowance for loan losses as a percentage of total loans was 1.25% at March 31, 2013, compared to 1.28% in the linked quarter. The allowance ratios are inclusive of acquired Gotham loans that were recorded at fair value at acquisition date and for which there is no additional allowance for loan losses at either March 31, 2013 or December 31, 2012.
  • Non-performing loans decreased from $39.8 million at September 30, 2012, to $31.3 million at March 31, 2013.
  • Provision for loan losses was $2.6 million and decreased by $350 thousand compared to the linked quarter. For the second quarter of fiscal 2012, the provision for loan losses was $2.9 million.
  • The core efficiency ratio was 64.6% compared to 62.9% in the linked quarter and 67.9% for the second fiscal quarter of 2012. See the reconciliation of this non-GAAP financial measure on page 10. The efficiency ratio was impacted by lower non-interest income in the second fiscal quarter as compared to the first fiscal quarter.

Net Interest Income and Margin 
Second quarter fiscal 2013 compared with second quarter fiscal 2012
Net interest income was $27.8 million for the second quarter of fiscal 2013, up $3.9 million compared to the second quarter of fiscal 2012 due to higher average loan volumes. Reflecting the current interest rate environment, the tax-equivalent yield on investments decreased 49 basis points and yield on loans declined 10 basis points compared to the second quarter of fiscal 2012. As a result, the yield on interest-earning assets declined 26 basis points to 3.96% on a tax equivalent basis for the second quarter of fiscal 2013. The cost of deposits increased one basis point to 22 basis points from the year ago quarter, while the cost of borrowings decreased three basis points to 3.49%. The resulting net interest margin on a tax-equivalent basis was 3.41% for the second quarter of fiscal 2013 compared to 3.57% for the same period a year ago.

Second quarter fiscal 2013 compared with linked quarter ended December 31, 2012
Net interest income for the quarter ended March 31, 2013 declined $104 thousand to $27.8 million, compared to $27.9 million for the linked quarter ended December 31, 2012. This was primarily due to two fewer days in the second fiscal quarter. The tax-equivalent net interest margin increased to 3.41% from 3.37% in the linked quarter, which was principally the result of a decline in our average interest bearing cash balance of $37.0 million. Yield on loans decreased 11 basis points and was 4.93%. Yield on interest earning assets declined two basis points to 3.96% from 3.98% in the linked quarter. Deposit costs decreased by six basis points, as certain deposit relationships were re-priced to current market rates and the maturity of higher cost deposits matured.

Non-interest Income
Second quarter fiscal 2013 compared with second quarter fiscal 2012
Non-interest income declined $1.1 million to $6.9 million for the second quarter of fiscal 2013 compared with the second quarter of fiscal 2012. The decrease was mainly due to lower net gain on sale of securities of $670 thousand, and a decrease in title insurance fees and other management fees of $643 thousand. We sold the assets of our former subsidiaries that were active in title insurance and investment management businesses. During the second quarter of fiscal 2013 we reinvested in a new title insurance joint venture and deployed a new wealth management strategy. We expect both of these initiatives will contribute to non-interest income going forward.

Second quarter fiscal 2013 compared with linked quarter ended December 31, 2012
Non-interest income decreased $807 thousand to $6.9 million for the second fiscal quarter of 2013 compared to the linked quarter ended December 31, 2012. Title insurance fees and other management fees declined by $542 thousand, gain on sale of loans declined $239 thousand, and other non-interest income declined $798 thousand. Partially offsetting these declines was an increase in net gain on sale of securities of $813 thousand.

Non-interest Expense
Second quarter fiscal 2013 compared with second quarter fiscal 2012
Non-interest expense increased $2.0 million to $23.3 million relative to the second quarter of fiscal 2012. This is the result of an increase in personnel expense associated with the continued growth in the number of our commercial banking teams and related occupancy expense. Foreclosed property expense increased to $915 thousand from $412 thousand over the same period a year ago.

Second quarter fiscal 2013 compared with the linked quarter ended December 31, 2012
Non-interest expense increased $793 thousand compared to the linked quarter. The increase was mainly related to $542 thousand in merger-related expense associated with our pending merger with Sterling Bancorp, as well as an increase in foreclosed property expense of $630 thousand. These increases were partially offset by lower compensation and benefits expense and professional fees expense.

Income Taxes
In the second quarter of fiscal 2013, the Company recorded income tax expense at 25.2% compared to an estimated effective tax rate of 30.4% in the linked quarter and 26.3% for the same period in fiscal 2012. The decrease in the estimated effective tax rate is the result of an increase in the current and anticipated merger-related expense as well as the proportion of tax-exempt earnings as a percentage of total earnings.

Credit Quality
Non-performing loans decreased to $31.3 million at March 31, 2013 compared to $39.8 million at September 30, 2012. During the first half of the fiscal year we exited several large credit relationships, which contributed to the decline. Net charge-offs for the second quarter were $3.2 million compared to $3.1 million in the linked quarter. The allowance for loan losses at March 31, 2013 was $27.5 million, which represented 88.1% of non-performing loans and 1.25% of our total loan portfolio. This compares to the linked quarter, in which the allowance for loan losses was $28.1 million, which represented 83.8% of non-performing loans and 1.28% of our total loan portfolio. 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 1.36% and 1.41%, at March 31, 2013 and December 31, 2012, respectively. Please refer to the Company's reconciliation of this non-GAAP measure on page 10.

During the quarter, the balance of foreclosed properties decreased $1.6 million to $5.5 million, the result of the sale of four properties. During the second quarter we acquired four properties with a balance of $602 thousand, and we incurred $606 thousand of foreclosed property write downs.

Subsequent to March 31, 2013, we exited an additional non-performing relationship with a loan a balance of $3.1 million at our carrying value.

Key Balance Sheet Changes

  • Total assets at March 31, 2013 decreased $312.5 million or 7.8% compared to September 30, 2012, mainly related to a decrease in our cash balance of $364.6 million. Our cash balance at September 30, 2012 was elevated due to a seasonal increase in municipal deposits due to municipal tax collections that were subsequently drawn down.
  • Loans at March 31, 2013 increased $85.1 million or 8.0% on an annual basis compared to September 30, 2012.
  • Commercial real estate and commercial and industrial loans increased $103.9 million or 15% on an annual basis compared to September 30, 2012.
  • Acquisition development and construction loans declined to $118.1 million at March 31, 2013 from $144.1 million at September 30, 2012.
  • Securities at March 31, 2013 decreased $24.0 million as compared to September 30, 2012. As of March 31, 2013, securities represented 30.4% of total assets compared to 28.7% at September 30, 2012.
  • Deposits decreased $311.5 million between September 30, 2012 and March 31, 2013. Municipal deposits decreased $364.7 million compared to September 30, 2012, as a result of seasonal tax deposits; this was offset by increases in other deposits of $53.2 million.

Capital and Liquidity
Provident Bank remained well capitalized at March 31, 2013with a Tier 1 leverage ratio of 8.62% based on period end assets. Stockholders' equity increased $3.6 million from September 30, 2012, to $494.7 million at March 31, 2013. Tangible book value per share increased by $0.07 to $7.33 at March 31, 2013 from $7.26 at September 30, 2012, due to retained earnings. For the quarter ended March 31, 2013, the weighted average common shares outstanding increased to 43.7 million and 43.8 million, basic shares and diluted shares, respectively, compared to 41.1 million basic and diluted shares for 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 $3.7 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: changes in market interest rates and general and regional economic conditions; changes in government regulations and regulatory oversight; changes in the value of goodwill and intangible assets; changes in the quality or composition of the loan and investment portfolios; potential breaches of information security; competition from banks and non-banking companies; ability to obtain regulatory approvals and meet other closing conditions to the merger (the "Merger") between Provident New York Bancorp ("Provident") and Sterling Bancorp ("Sterling), including approval by Provident and Sterling shareholders, on the expected terms and schedule; delay in closing the Merger; difficulties and delays in integrating the Provident and Sterling businesses or fully realizing cost savings and other benefits; business disruption following the proposed Merger; 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; changes in Provident's stock price before the completion of the Merger, 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 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-Q 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.

Additional Information for Stockholders
In connection with the proposed merger, Provident will file with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4 that will include a joint proxy statement of Provident and Sterling and a prospectus of Provident, as well as other relevant documents concerning the proposed transaction. Provident and Sterling will mail the joint proxy statement/prospectus to their stockholders. STOCKHOLDERS OF PROVIDENT AND STERLING ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the proxy statement/prospectus (when available) and other filings containing information about Provident and Sterling at the SEC's website at www.sec.gov. The joint proxy statement/prospectus (when available) and the other filings may also be obtained free of charge at Provident's website at www.providentbanking.com under the tab "Investor Relations," and then under the heading "SEC Filings" or at Sterling's website at www.snb.com under the tab "Investor Relations," and then under the heading "SEC Filings."

Provident, Sterling and certain of their respective directors and executive officers, under the SEC's rules, may be deemed to be participants in the solicitation of proxies of Provident's and Sterling's shareholders in connection with the proposed merger. Information about the directors and executive officers of Provident and their ownership of Provident common stock is set forth in the proxy statement for Provident's 2013 annual meeting of shareholders, as filed with the SEC on Schedule 14A on January 10, 2013. Information about the directors and executive officers of Sterling and their ownership of Sterling common stock is set forth in the proxy statement for Sterling's 2012 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on April 3, 2012. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

   
   
Provident New York Bancorp and Subsidiaries  
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION  
(unaudited, in thousands, except share and per share data)  
    As of  
    3/31/13     9/30/12  
Assets:                
Cash and due from banks   $ 73,396     $ 437,982  
Total securities     1,129,213       1,153,248  
HVIA assets held for sale     -       4,550  
Loans held for sale     1,040       7,505  
Loans:                
  Residential mortgage     365,485       350,022  
  Commercial real estate     1,149,463       1,072,504  
  Commercial and industrial     370,246       343,307  
  Acquisition, development and construction     118,115       144,061  
  Consumer     201,246       209,578  
    Total loans, gross     2,204,555       2,119,472  
  Allowance for loan losses     (27,544 )     (28,282 )
    Total loans, net     2,177,011       2,091,190  
Federal Home Loan Bank stock, at cost     20,251       19,249  
Premises and equipment, net     37,617       38,483  
Goodwill     163,117       163,247  
Other amortizable intangibles     6,538       7,164  
Bank owned life insurance     59,916       59,017  
Foreclosed properties     5,486       6,403  
Other assets     36,855       34,944  
    Total assets   $ 3,710,440     $ 4,022,982  
Liabilities:                
Deposits   $ 2,799,658     $ 3,111,151  
Borrowings     367,976       345,176  
Mortgage escrow funds     17,582       11,919  
Other liabilities     30,513       63,614  
    Total liabilities     3,215,729       3,531,860  
Stockholders' equity     494,711       491,122  
    Total liabilities and stockholders' equity   $ 3,710,440     $ 4,022,982  
                 
Shares of common stock outstanding at period end     44,353,276       44,173,470  
Book value per share   $ 11.15     $ 11.12  
Tangible book value per share     7.33       7.26  
                 
                 
   
Provident New York Bancorp and Subsidiaries  
CONSOLIDATED CONDENSED STATEMENTS OF INCOME  
(unaudited, in thousands, except share and per share data)  
    For the Quarters Ended     For the Six Months Ended  
    3/31/13     12/31/12     3/31/12     3/31/13     3/31/12  
Interest and dividend income:                                        
  Loans and loan fees   $ 26,378     $ 27,071     $ 22,153     $ 53,449     $ 44,302  
  Securities taxable     4,288       4,284       4,415       8,572       8,405  
  Securities non-taxable     1,490       1,457       1,599       2,947       3,373  
  Other earning assets     264       333       244       597       499  
Total interest income     32,420       33,145       28,411       65,565       56,579  
Interest expense:                                        
  Deposits     1,624       2,097       1,217       3,721       2,530  
  Borrowings     2,977       3,125       3,289       6,102       6,906  
Total interest expense     4,601       5,222       4,506       9,823       9,436  
Net interest income     27,819       27,923       23,905       55,742       47,143  
Provision for loan losses     2,600       2,950       2,850       5,550       4,800  
Net interest income after provision for loan losses     25,219       24,973       21,055       50,192       42,343  
Non-interest income:                                        
  Deposit fees and service charges     2,736       2,778       2,706       5,514       5,496  
  Net gain on sales of securities     2,229       1,416       2,899       3,645       4,888  
  Other than temporary loss on securities     (7 )     (25 )     -       (32 )     (38 )
  Title insurance fees     -       259       265       259       525  
  Bank owned life insurance     491       509       502       1,000       1,020  
  Gain on sale of loans     507       746       450       1,253       890  
  Investment management fees     422       705       800       1,127       1,565  
  Fair value loss on interest rate caps     -       (1 )     (40 )     (1 )     (43 )
  Other     474       1,272       389       1,746       844  
Total non-interest income     6,852       7,659       7,971       14,511       15,147  
Non-interest expense:                                        
  Compensation and benefits     11,805       12,299       11,395       24,104       22,320  
  Stock-based compensation plans     679       500       284       1,179       559  
  Merger related expenses     542       -       299       542       546  
  Occupancy and office operations     3,954       3,810       3,409       7,764       7,110  
  Advertising and promotion     535       244       427       779       1,040  
  Professional fees     912       1,215       1,056       2,127       1,983  
  Data and check processing     823       649       710       1,472       1,382  
  Amortization of intangible assets     388       261       305       649       628  
  FDIC insurance and regulatory assessments     753       718       743       1,471       1,471  
  ATM/debit card expense     415       442       425       857       836  
  Foreclosed property expense     915       285       412       1,200       617  
  Other     1,618       2,123       1,825       3,741       3,519  
Total non-interest expense     23,339       22,546       21,290       45,885       42,011  
Income before income tax expense     8,732       10,086       7,736       18,818       15,479  
Income tax expense     2,203       3,066       2,035       5,269       4,061  
Net income   $ 6,529     $ 7,020     $ 5,701     $ 13,549     $ 11,418  
  Basic earnings per share   $ 0.15     $ 0.16     $ 0.15     $ 0.31     $ 0.31  
  Diluted earnings per share     0.15       0.16       0.15       0.31       0.31  
  Dividends declared per share     0.06       0.06       0.06       0.12       0.12  
Weighted average common shares:                                        
  Basic     43,743,640       43,637,315       37,280,651       43,704,163       37,266,480  
  Diluted     43,848,486       43,721,091       37,316,778       43,790,915       37,275,633  
                                           
                                           
   
Selected Financial Condition Data: As of and for the Quarter Ended
(in thousands except share and per share data) 3/31/13   12/31/12   9/30/12   6/30/12   3/31/12
End of Period                            
Total assets $ 3,710,440   $ 3,789,514   $ 4,022,982   $ 3,150,040   $ 3,210,871
Securities available for sale   945,678     991,298     1,010,872     714,200     852,717
Securities held to maturity   183,535     139,874     142,376     171,233     174,824
Loans, gross 1   2,204,555     2,193,129     2,119,472     1,851,027     1,799,112
Goodwill   163,117     163,247     163,247     160,861     160,861
Other amortizable intangibles   6,538     6,926     7,164     3,718     4,001
Deposits   2,799,658     2,904,384     3,111,151     2,332,091     2,368,988
Municipal deposits (included above)   537,070     538,212     901,739     479,772     607,158
Borrowings   367,976     345,411     345,176     314,154     313,849
Equity   494,711     493,883     491,122     444,670     439,699
Tangible Equity   325,056     323,710     320,711     280,091     274,837
Average Balances                            
Total assets $ 3,804,660   $ 3,792,201   $ 3,451,055   $ 3,133,958   $ 3,131,854
Loans, gross:                            
  Residential mortgage   360,840     344,064     352,724     360,487     374,498
  Commercial real estate   1,138,333     1,107,779     989,349     868,963     838,935
  Commercial and industrial   368,896     354,137     263,922     205,051     197,507
  Acquisition, development and construction   122,937     138,881     156,726     165,442     163,116
  Consumer   203,492     208,064     210,650     215,555     220,537
Loans total 1   2,194,498     2,152,925     1,973,371     1,815,498     1,794,593
Securities (taxable)   967,889     954,372     841,373     778,782     799,753
Securities (non-taxable)   181,803     174,201     181,540     182,003     185,062
Total earning assets   3,403,209     3,380,875     3,070,315     2,797,093     2,792,042
Deposits:                            
  Non-interest bearing demand   641,194     649,077     592,962     483,589     503,539
  Interest bearing NOW accounts   508,129     469,180     398,493     412,072     389,846
  Savings (including mortgage escrow funds)   575,380     531,107     539,904     493,234     463,971
  Money market   877,101     908,262     756,655     697,342     654,013
  Certificates of deposit   355,917     380,244     303,788     265,375     284,737
Total deposits and mortgage escrow   2,957,721     2,937,870     2,591,802     2,351,612     2,296,106
Borrowings   345,717     345,951     336,217     320,237     375,766
Equity   492,725     492,506     475,652     441,956     439,384
Tangible Equity   322,683     319,783     308,029     277,205     274,339
Selected Operating Data:                            
Condensed Tax Equivalent Income Statement                            
Interest and dividend income $ 32,420   $ 33,145   $ 30,113   $ 28,345   $ 28,411
Tax equivalent adjustment*   802     785     830     852     861
Interest expense   4,601     5,222     4,874     4,263     4,506
  Net interest income (tax equivalent)   28,621     28,708     26,069     24,934     24,766
Provision for loan losses   2,600     2,950     3,500     2,312     2,850
  Net interest income after provision for loan                            
  losses   26,021     25,758     22,569     22,622     21,916
Non-interest income   6,852     7,659     9,026     7,979     7,971
Non-interest expense   23,339     22,546     28,784     21,162     21,290
Income before income tax expense   9,534     10,871     2,811     9,439     8,597
Income tax expense (tax equivalent)*   3,005     3,851     550     3,230     2,896
  Net income $ 6,529   $ 7,020   $ 2,261   $ 6,209   $ 5,701
                               
1 Does not reflect allowance for loan losses of $27,544, $28,114, $28,282, $27,587, and $27,787.
* Tax exempt income assumed at a statutory 35% federal tax rate.
 
 
 
     
    For the Quarter Ended
    3/31/13     12/31/12 9/30/12 6/30/12 3/31/12
Performance Ratios (annualized)                          
Return on average assets     0.70%       0.73%   0.26%   0.80%   0.73%
Return on average equity     5.37%       5.65%   1.89%   5.65%   5.22%
Return on average tangible equity 1     8.21%       8.71%   2.92%   9.01%   8.36%
Non-interest income to average assets     0.73%       0.80%   1.04%   1.02%   1.02%
Non-interest expense to average assets     2.49%       2.36%   3.32%   2.72%   2.73%
Core operating efficiency 1     64.6%       62.9%   72.0%   65.5%   67.9%
Analysis of Net Interest Income                          
Yield on loans     4.93%       5.04%   4.97%   5.01%   5.03%
Yield on investment securities - tax equivalent2     2.32%       2.29%   2.44%   2.79%   2.81%
Yield on earning assets - tax equivalent2     3.96%       3.98%   4.01%   4.20%   4.22%
Cost of deposits     0.22%       0.28%   0.27%   0.22%   0.21%
Cost of borrowings     3.49%       3.58%   3.65%   3.77%   3.52%
Cost of interest bearing liabilities     0.70%       0.79%   0.83%   0.78%   0.84%
Net interest rate spread - tax equivalent basis2     3.26%       3.19%   3.18%   3.42%   3.38%
Net interest margin - tax equivalent basis2     3.41%       3.37%   3.38%   3.59%   3.57%
Capital                          
Tier 1 leverage ratio - Bank only     8.62%       8.23%   7.49%   8.67%   8.32%
Tier 1 risk-based capital - Bank only   $ 304,695 3   $ 297,089 $ 289,441 $ 257,621 $ 252,586
Total risk-based capital - Bank only     329,239 3     325,410   317,929   283,033   277,614
Tangible equity - consolidated (1)     325,056       323,710   320,711   280,091   274,837
Tangible equity as a % of tangible assets - consolidated 1     9.18%       8.94%   8.32%   9.38%   9.02%
Shares of common stock outstanding     44,353,276       44,348,787   44,173,470   37,899,007   37,899,007
Shares repurchased during qtr (open market)     -       -   -   -   -
Basic weighted average common shares outstanding     43,743,640       43,637,315   41,054,458   37,302,693   37,280,651
Diluted weighted average common shares outstanding     43,848,486       43,721,091   41,099,237   37,330,467   37,316,778
Basic earnings per share   $ 0.15     $ 0.16 $ 0.06 $ 0.17 $ 0.15
Diluted earnings per share     0.15       0.16   0.06   0.17   0.15
Dividends declared per share     0.06       0.06   0.06   0.06   0.06
Book value per share     11.15       11.14   11.12   11.73   11.60
Tangible book value per share 1     7.33       7.30   7.26   7.39   7.25
Asset Quality                          
Non-performing loans (NPLs): non-accrual   $ 27,019     $ 27,730 $ 35,444 $ 41,048 $ 47,269
Non-performing loans (NPLs): still accruing     4,257       5,823   4,370   3,450   4,693
Other real estate owned     5,486       7,053   6,403   7,292   5,828
Non-performing assets (NPAs)     36,762       40,606   46,217   51,790   57,790
Net charge-offs     3,170       3,118   2,805   2,512   3,308
Net charge-offs as % of average loans (annualized)     0.58%       0.58%   0.57%   0.55%   0.74%
NPLs as % of total loans     1.42%       1.53%   1.88%   2.40%   2.89%
NPAs as % of total assets     0.99%       1.07%   1.15%   1.64%   1.80%
Allowance for loan losses as % of NPLs     88.1%       83.8%   71.0%   62.0%   53.5%
Allowance for loan losses as % of total loans     1.25%       1.28%   1.33%   1.49%   1.54%
Allowance for loan losses as % of total loans, excluding                          
Gotham loans1     1.36%       1.41%   1.47%   1.49%   1.54%
Special mention loans   $ 41,778     $ 29,755 $ 42,422 $ 37,555 $ 37,379
Substandard / doubtful loans     70,688       83,109   88,674   88,395   89,135
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 March 31, 2013.
 
 
     
     
Non GAAP Financial Measures As of and for the Quarter Ended  
(in thousands except share and per share data) 3/31/13   12/31/12   9/30/12   6/30/12   3/31/12  
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 $ 3,710,440   $ 3,789,514   $ 4,022,982   $ 3,150,040   $ 3,210,871  
Goodwill and other amortizable intangibles   (169,655 )   (170,173 )   (170,411 )   (164,579 )   (164,862 )
Tangible assets   3,540,785     3,619,341     3,852,571     2,985,461     3,046,009  
Stockholders' equity   494,711     493,883     491,122     444,670     439,699  
Goodwill and other amortizable intangibles   (169,655 )   (170,173 )   (170,411 )   (164,579 )   (164,862 )
Tangible stockholders' equity   325,056     323,710     320,711     280,091     274,837  
Shares of common stock outstanding at period end   44,353,276     44,348,787     44,173,470     37,899,007     37,899,007  
Tangible equity as a % of tangible assets   9.18 %   8.94 %   8.32 %   9.38 %   9.02 %
Tangible book value per share $ 7.33   $ 7.30   $ 7.26   $ 7.39   $ 7.25  
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 $ 492,725   $ 492,506   $ 475,652   $ 441,956   $ 439,384  
Average goodwill and other amortizable intangibles   (170,042 )   (172,723 )   (167,623 )   (164,751 )   (165,045 )
Average tangible stockholders' equity   322,683     319,783     308,029     277,205     274,339  
Net income   6,529     7,020     2,261     6,209     5,701  
Net income, if annualized   26,479     27,851     8,995     24,972     22,929  
Return on average tangible equity   8.21 %   8.71 %   2.92 %   9.01 %   8.36 %
The Company believes that the return on average tangible stockholders' equity is useful as a tool to help measure and assess a company's use of equity.  
The following table shows the reconciliation of the core operating efficiency ratio:  
Net interest income $ 27,819   $ 27,923   $ 25,239   $ 24,082   $ 23,905  
Non-interest income   6,852     7,659     9,026     7,979     7,971  
Total net revenues   34,671     35,582     34,265     32,061     31,876  
Tax equivalent adjustment on securities interest income   802     785     830     852     861  
Net gain on sales of securities   (2,229 )   (1,416 )   (3,152 )   (2,412 )   (2,899 )
Other than temporary loss on securities   7     25     3     6     -  
Other, (other gains and fair value loss on interest rate caps)   -     (4 )   (64 )   14     40  
Core total revenues   33,251     34,972     31,882     30,521     29,878  
Non-interest expense   23,339     22,546     28,784     21,162     21,290  
Merger related expense   (542 )   -     (4,928 )   (451 )   (299 )
Foreclosed property expense   (915 )   (285 )   (573 )   (428 )   (412 )
Amortization of intangible assets   (388 )   (261 )   (334 )   (283 )   (305 )
Core non-interest expense   21,494     22,000     22,949     20,000     20,274  
Core efficiency ratio   64.6 %   62.9 %   72.0 %   65.5 %   67.9 %
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 foreclosed property 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.  
The following table shows the reconciliation of the allowance for loan losses to total loans and to total loans excluding Gotham loans:  
Total loans $ 2,204,555   $ 2,193,129   $ 2,119,472   $ 1,851,027   $ 1,799,112  
Gotham loans   (176,383 )   (194,518 )   (201,794 )   -     -  
Total loans, excluding Gotham loans   2,380,938     2,387,647     2,321,266     1,851,027     1,799,112  
Allowance for loan losses   27,544     28,114     28,282     27,587     27,787  
Allowance for loan losses to total loans   1.25 %   1.28 %   1.33 %   1.49 %   1.54 %
Allowance for loan losses to total loans, excluding Gotham loans   1.16 %   1.41 %   1.47 %   NA     NA  
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 inlosses for the periods reflected above.  
   
   

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
    www.providentbanking.com