Provident New York Bancorp Announces First Quarter 2013

Provident New York Bancorp Announces First Quarter 2013 Earnings of
$0.16 per Diluted Share 
MONTEBELLO, NY -- (Marketwire) -- 01/23/13 --   Provident New York
Bancorp (the "Company") (NYSE: PBNY), the parent company of Provident
Bank, today announced first quarter results for the period ended
December 31, 2012. Net income for the quarter was $7.0 million, or
$0.16 per diluted share, compared to net income of $5.7 million, or
$0.15 per diluted share for the same quarter last year; and $2.3
million, or $0.06 per diluted share for the linked quarter ended
September 30, 2012.  
President's Comments 
 Jack Kopnisky, President and CEO, commented:
"We had a strong first quarter to kick-off our year. Earnings for the
quarter were $7.0 million or $0.16 per share, a 23% increase compared
to the first quarter of 2012 and an increase of 210% over the linked
quarter, which had been significantly impacted by merger-related
expenses related to the acquisition of Gotham Bank of New York.
Earnings were driven by strong commercial loan growth, solid core
deposit growth and our continued management of expenses. We also
continue to improve our operating efficiency as our growth in
revenues outpaced expenses. Our efficiency ratio was 62.9% for the
first quarter of 2013.  
"Our credit quality continued to improve across the most important
metrics. Non-performing loans of $34 million at December 31, 2012 are
down $6.3 million compared to the linked quarter. Our ratio of
non-performing loans to total loans declined by 106 basis points to
1.53% at December 31, 2012 as compared to the year ago period. Our
allowance for loan losses to non-performing loans increased to 84% at
December 31, 2012, and the positive trend in the risk ratings of our
loan portfolio continued as well.  
"Our overall strategy of focusing primarily on middle market clients
has strong momentum. We continue to see significant opportunities for
full relationships in the market. Our pipelines of loans, deposits
and fee income opportunities continue to be at record highs. These
volumes are enabling us to diversify our loan portfolio from higher
concentrations of real estate loans to a more balanced portfolio.
Overall we are originating approximately 50% of our commercial loans
and deposits in our new markets and approximately 50% in our legacy
markets. 
"We are pleased to report that the integration of the Gotham Bank
acquisition is going as planned and is assisting us in accelerating
our growth in the New York City market area. 
"Finally we continue to maintain strong levels of capital and
liquidity. Tier 1 leverage ratio was approximately 8.2% at the Bank
level and our total risk-based capital ratio was approximately
13.5%." 
Key highlights for the quarter 


 
--  Total loan originations were $291.1 million compared to $205.7 million
    in the linked quarter, and $231.6 million for the first fiscal quarter
    of 2012.
--  Total loans reached $2.2 billion at December 31, 2012, a $73.7 million
    increase compared to September 30, 2012.
--  Our allowance for loan losses remained relatively unchanged at $28.1
    million at December 31, 2012, in large part due to the growth in our
    loan portfolio. The allowance for loan losses as a percentage of total
    loans was 1.28% at December 31, 2012, compared to 1.33% 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 December
    31, 2012 or September 30, 2012.
--  Non-performing loans decreased from $39.8 million at September 30,
    2012, to $33.6 million at December 31, 2012. The reduction in
    non-performing loans improved the allowance for loan losses to
    non-performing loans ratio to 84% at December 31, 2012.
--  Provision for loan losses was $3.0 million and decreased by $550
    thousand compared to the linked quarter. For the first quarter of
    fiscal 2012, our provision for loan losses was $2.0 million.
--  Net interest margin was 3.37% for the first quarter of fiscal 2013
    compared to 3.38% in the linked quarter and 3.54% in the first quarter
    of fiscal 2012.

  
Net Interest Income and Margin 
 First quarter fiscal 2013 compared
with first quarter fiscal 2012
 Net interest income was $27.9 million
for the first quarter of fiscal 2013, up $4.7 million compared to the
first quarter of fiscal 2012 due to higher average loan volumes.
Reflecting the current interest rate environment, the tax-equivalent
yield on investments decreased 67 basis points and loan yields
declined nine basis points compared to the first quarter of fiscal
2012. As a result, the yield on interest-earning assets declined 28
basis points to 3.98% on a tax equivalent basis for the first quarter
of fiscal 2013. The cost of deposits increased five basis points to
28 basis points from the year ago quarter, while the cost of
borrowings decreased by seven basis points to 3.58%. The resulting
net interest margin on a tax-equivalent basis was 3.37% for the first
quarter of fiscal 2013 compared to 3.54% for the same period a year
ago.  
First quarter fiscal 2013 compared with linked quarter ended
September 30, 2012
 Net interest income for the quarter ended
December 31, 2012 increased $2.7 million to $27.9 million, compared
to $25.2 million for the linked quarter ended September 30, 2012.
This was primarily due to higher volumes. The tax-equivalent net
interest margin decreased to 3.37% from 3.38% in the linked quarter.
Yield on loans increased seven basis points and was 5.04%. Yield on
interest earning assets declined three basis points to 3.98% from
4.01% at September 30, 2012. Deposit costs increased by one basis
point, while the cost of borrowings decreased seven basis points. 
Non-interest Income
 First quarter fiscal 2013 compared with first
quarter fiscal 2012
 Non-interest income increased $483 thousand to
$7.7 million for the first quarter of fiscal 2013 compared with first
quarter of fiscal 2012. The increase was mainly driven by an increase
in gain on sale of loans of $306 thousand given strong residential
loan origination volume during the quarter and increases in other
loan fees included in other non-interest income of $744 thousand. Net
gain on sales of securities decreased by $573 thousand to $1.4
million. 
First quarter fiscal 2013 compared with linked quarter ended
September 30, 2012
 Non-interest income decreased $1.4 million to
$7.7 million for the first fiscal quarter of 2013 compared to the
linked quarter ended September 30, 2012. Net gain on sales of
securities declined by $1.7 million to $1.4 million for the first
quarter of fiscal 2013 compared to $3.2 million for the linked
quarter. Partially offsetting this decline were higher gain on sale
of loans and other loan fees included in other non-interest income. 
Non-interest Expense
 First quarter fiscal 2013 compared with first
quarter fiscal 2012
 Non-interest expense increased $1.8 million to
$22.5 million, when compared to the first quarter of fiscal 2012.
This was principally attributed to an increase in personnel
associated with the continued growth in the number of our commercial
banking teams.  
First quarter fiscal 2013 compared with the linked quarter ended
September 30, 2012
 Non-interest expense decreased $6.2 million, or
21.7% over the linked quarter. The decrease was mainly related to the
$4.9 million in merger related costs associated with the Gotham
acquisition in the quarter ended September 30, 2012.  
Income Taxes
 The Company recorded income tax expense for the first
quarter of fiscal 2013 at an effective tax rate of 30.4% compared to
26.2% for the same period in fiscal 2012. The increase in the tax
rate is the result of increased operating revenue which causes the
proportional impact of tax-exempt municipal securities interest and
bank owned life insurance income to decline.  
Credit Quality
 Non-performing loans decreased to $33.6 million at
December 31, 2012 compared to $39.8 million at September 30, 2012. We
exited a large credit relationship in our Acquisition, Development
and Construction ("ADC") portfolio that contributed to the decline.
Net charge-offs for the quarter were $3.1 million compared to $2.8
million in the linked quarter. The allowance for loan losses at
December 31, 2012 was $28.1 million, which represented 83.8% of
non-performing loans and 1.28% of our total loan portfolio. This
compares to the linked quarter, in which the allowance for loan
losses was $28.3 million, which represented 71.0% of non-performing
loans and 1.33% 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 1.41% and 1.47%, at December
31, 2012 and September 30, 2012, respectively. Please refer to the
Company's reconciliation of this non-GAAP measure on page 9.  
During the quarter, foreclosed properties increased $650 thousand to
$7.1 million. Contributing to the increase were foreclosed ADC loans
that totaled $1.3 million and one residential loan with a balance of
$121 thousand. This was offset by sales and write-downs that totaled
$731 thousand. 
Key Balance Sheet Changes  


 
--  Assets at December 31, 2012, decreased $233.5 million or 5.80%
    compared to September 30, 2012, mainly related to decreases in our
    cash balances of $277.7 million. Our cash balance at September 30,
    2012 was elevated due to municipal tax collections that were
    subsequently drawn down during the quarter.
--  Loans increased $73.7 million in the first fiscal quarter of 2013 and
    reached $2.2 billion.
--  Deposits decreased $206.8 million between September 30, 2012 and
    December 31, 2012. Municipal deposits decreased $363.5 million
    compared to September 30, 2012, as a result of seasonal tax deposits,
    offset by increases in our commercial deposits of $91.7 million.
--  Securities at December 31, 2012 decreased $22.1 million as compared to
    September 30, 2012. Purchases for the first fiscal quarter of 2013
    were $109.0 million, which were offset by sales of $41.3 million and
    $85.5 million in calls, maturities and principal pay downs.

  
Capital and Liquidity
 Provident Bank remained well capitalized at
December 31, 2012 with a Tier 1 Leverage ratio of 8.21% based on
period end assets. Total capital increased $2.8 million from
September 30, 2012, to $493.9 million at December 31, 2012. Tangible
book value per share increased by $0.04 to $7.30 at December 31, 2012
from $7.26 at September 30, 2012, due to retained earnings. For the
quarter ended December 31, 2012, the weighted average common shares
outstanding increased to 43.6 million and 43.7 million, basic shares
and diluted shares, respectively, compared to 41.1 million basic and
diluted shares for the quarter ended September 30, 2012. This
increase includes shares issued in our August 2012 $46 million
capital raise.  
About Provident New York Bancorp
 Headquartered in Montebello, N.Y.,
Provident Bank, with $3.8 billion in assets, is a growing financial
services firm 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. 
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 December 31, 2012. 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.  


 
                                                                            
                                                                            
Provident New York Bancorp and Subsidiaries                                 
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION                    
(unaudited, in thousands, except share and per share data)                  
                                                                            
                                                           As of            
                                               ---------------------------- 
                                                  12/31/12       9/30/12    
                                               -------------  ------------- 
Assets:                                                                     
Cash and due from banks                        $     160,241  $     437,982 
Total securities                                   1,131,172      1,153,248 
HVIA assets held for sale                                  -          4,550 
Loans held for sale                                    5,423          7,505 
Loans:                                                                      
   One- to four-family residential mortgage                                 
    loans                                            352,014        350,022 
   Commercial real estate loans                    1,136,965      1,072,504 
   Commercial and industrial loans                   376,052        343,307 
   Acquisition, development and construction                                
    loans                                            122,518        144,061 
   Consumer loans                                    205,580        209,578 
                                               -------------  ------------- 
           Total loans, gross                      2,193,129      2,119,472 
   Allowance for loan losses                         (28,114)       (28,282)
                                               -------------  ------------- 
           Total loans, net                        2,165,015      2,091,190 
Federal Home Loan Bank stock, at cost                 19,246         19,249 
Premises and equipment, net                           38,086         38,483 
Goodwill                                             163,247        163,247 
Other amortizable intangibles                          6,926          7,164 
Bank owned life insurance                             59,526         59,017 
Foreclosed properties                                  7,053          6,403 
Other assets                                          33,579         34,944 
                                               -------------  ------------- 
           Total assets                        $   3,789,514  $   4,022,982 
                                               =============  ============= 
Liabilities:                                                                
   Deposits                                                                 
       Retail                                  $     167,369  $     167,050 
       Commercial                                    501,667        412,630 
       Municipal                                      15,779        367,624 
       Personal NOW deposits                         250,345        213,755 
       Business NOW deposits                          41,164         38,486 
       Municipal NOW deposits                        168,771        195,882 
                                               -------------  ------------- 
           Total transaction accounts              1,145,095      1,395,427 
       Savings                                       560,039        506,538 
       Money market deposits                         834,544        821,704 
       Certificates of deposit                       364,706        387,482 
                                               -------------  ------------- 
           Total deposits                          2,904,384      3,111,151 
   Borrowings                                        345,411        345,176 
   Mortgage escrow funds and other liabilities        45,836         75,533 
                                               -------------  ------------- 
           Total liabilities                       3,295,631      3,531,860 
Stockholders' equity                                 493,883        491,122 
                                               -------------  ------------- 
           Total liabilities and stockholders'                              
            equity                             $   3,789,514  $   4,022,982 
                                               =============  ============= 
                                                                            
Shares of common stock outstanding at period                                
 end                                              44,348,787     44,173,470 
Book value per share                           $       11.14  $       11.12 
                                                                            
                                                                            
                                                                            
Provident New York Bancorp and Subsidiaries                                 
CONSOLIDATED CONDENSED STATEMENTS OF INCOME                                 
(unaudited, in thousands, except share and per share data)                  
                                                                            
                                            For the Quarters Ended          
                                   ---------------------------------------- 
                                     12/31/12      12/31/11       9/30/12   
                                   ------------  ------------  ------------ 
Interest and dividend income:                                               
  Loans and loan fees              $     27,071  $     22,149  $     24,396 
  Securities taxable                      4,284         3,990         3,909 
  Securities non-taxable                  1,457         1,774         1,543 
  Other earning assets                      333           255           265 
                                   ------------  ------------  ------------ 
Total interest income                    33,145        28,168        30,113 
Interest expense:                                                           
  Deposits                                2,097         1,313         1,789 
  Borrowings                              3,125         3,617         3,085 
                                   ------------  ------------  ------------ 
Total interest expense                    5,222         4,930         4,874 
                                   ------------  ------------  ------------ 
Net interest income                      27,923        23,238        25,239 
Provision for loan losses                 2,950         1,950         3,500 
                                   ------------  ------------  ------------ 
Net interest income after                                                   
 provision for loan losses               24,973        21,288        21,739 
Non-interest income:                                                        
  Deposit fees and service charges $      2,778  $      2,790  $      3,065 
  Net gain on sales of securities         1,416         1,989         3,152 
  Other than temporary loss on                                              
   securities                               (25)          (38)           (3)
  Title insurance fees                      259           260           332 
  Bank owned life insurance                 509           518           512 
  Gain on sale of loans                     746           440           429 
  Gain on sale of premises and                                              
   equipment                                  5             -            70 
  Loss on sale of HVIA                        -             -          (135)
  Investment management fees                705           765           776 
  Fair value loss on interest rate                                          
   caps                                      (1)           (3)           (6)
  Other                                   1,267           455           834 
                                   ------------  ------------  ------------ 
Total non-interest income                 7,659         7,176         9,026 
Non-interest expense:                                                       
  Compensation and benefits              12,299        10,549        12,873 
  Stock-based compensation plans            500           275           302 
  Merger related expenses                     -           247         4,928 
  Restructuring charge                                                      
   (severance/branch relocation)              -           376             - 
  Occupancy and office operations         3,810         3,701         3,959 
  Advertising and promotion                 244           613           369 
  Professional fees                       1,215           927         1,136 
  Data and check processing                 649           672           715 
  Amortization of intangible                                                
   assets                                   261           323           334 
  FDIC insurance and regulatory                                             
   assessments                              718           728           843 
  ATM/debit card expense                    442           411           438 
  Foreclosed property expense               285           205           573 
  Other                                   2,123         1,694         2,314 
                                   ------------  ------------  ------------ 
Total non-interest expense               22,546        20,721        28,784 
                                   ------------  ------------  ------------ 
Income before income tax expense         10,086         7,743         1,981 
Income tax expense (benefit)              3,066         2,026          (280)
                                   ------------  ------------  ------------ 
Net income                         $      7,020  $      5,717  $      2,261 
                                   ============  ============  ============ 
  Basic earnings per common share  $       0.16  $       0.15  $       0.06 
  Diluted earnings per common                                               
   share                                   0.16          0.15          0.06 
  Dividends declared                       0.06          0.06          0.06 
Weighted average common shares:                                             
  Basic                              43,637,315    37,252,464    41,054,458 
  Diluted                            43,721,091    37,252,464    41,099,237 
                                                                            
                                                                            
                                                                            
Selected Financial                                                          
 Condition Data:                  As of and for the Quarter Ended           
                      ------------------------------------------------------
(in thousands except                                                        
 share and per share                                                        
 data)                 12/31/12    9/30/12    6/30/12    3/31/12   12/31/11 
                      ---------- ---------- ---------- ---------- ----------
End of Period                                                               
Total assets          $3,789,514 $4,022,982 $3,150,040 $3,210,871 $3,084,166
Loans, gross 1         2,193,129  2,119,472  1,851,027  1,799,112  1,775,893
Securities available                                                        
 for sale                991,298  1,010,872    714,200    852,717    785,462
Securities held to                                                          
 maturity                139,874    142,376    171,233    174,824    182,076
Bank owned life                                                             
 insurance                59,526     59,017     58,506     57,987     57,485
Goodwill                 163,247    163,247    160,861    160,861    160,861
Other amortizable                                                           
 intangibles               6,926      7,164      3,718      4,001      4,306
Other non - earning                                                         
 assets                   78,718     79,830     83,106     80,020     78,710
Deposits               2,904,384  3,111,151  2,332,091  2,368,988  2,135,555
Borrowings               345,411    345,176    314,154    313,849    468,543
Equity                   493,883    491,122    444,670    439,699    437,682
Other comprehensive                                                         
 income related to                                                          
 investment securities                                                      
 reflected in                                                               
 stockholders' equity     12,548     15,066     14,141     13,780     15,823
Average Balances                                                            
Total assets          $3,792,201 $3,451,055 $3,133,958 $3,131,854 $3,062,520
Loans, gross:                                                               
  One-to-four-family                                                        
   residential                                                              
   mortgage loans        344,064    352,724    360,487    374,498    385,269
  Commercial real                                                           
   estate loans        1,107,779    989,349    868,963    838,935    752,325
  Acquisition,                                                              
   development and                                                          
   construction loans    138,881    156,726    165,442    163,116    172,155
  Commercial and                                                            
   industrial loans      354,137    263,922    205,051    197,507    203,929
  Consumer loans         208,064    210,650    215,555    220,537    224,422
Loans total (1)        2,152,925  1,973,371  1,815,498  1,794,593  1,738,100
Securities (taxable)     954,372    841,373    778,782    799,753    696,293
Securities (non-                                                            
 taxable)                174,201    181,540    182,003    185,062    205,366
Total earning assets   3,380,875  3,070,315  2,797,093  2,792,042  2,715,027
Non earning assets       411,326    380,740    336,865    339,812    347,493
Non-interest bearing                                                        
 checking                649,077    592,962    483,589    503,539    500,621
Interest bearing NOW                                                        
 accounts                469,180    398,493    412,072    389,846    398,885
Total transaction                                                           
 accounts              1,118,257    991,455    895,661    893,385    899,506
Savings (including                                                          
 mortgage escrow                                                            
 funds)                  531,107    539,904    493,234    463,971    445,236
Money market deposits    908,262    756,655    697,342    654,013    577,387
Certificates of                                                             
 deposit                 380,244    303,788    265,375    284,737    302,713
Total deposits and                                                          
 mortgage escrow       2,937,870  2,591,802  2,351,612  2,296,106  2,224,842
Total interest bearing                                                      
 deposits (including                                                        
 escrow)               2,288,793  1,998,840  1,868,023  1,792,567  1,724,221
Borrowings               345,951    336,217    320,237    375,766    392,785
Equity                   492,506    475,652    441,956    439,384    431,129
Selected Operating                                                          
 Data:                                                                      
Condensed Tax                                                               
 Equivalent Income                                                          
 Statement                                                                  
Interest and dividend                                                       
 income               $   33,145 $   30,113 $   28,345 $   28,411 $   28,168
Tax equivalent                                                              
 adjustment*                 785        830        852        861        955
Interest expense           5,222      4,874      4,263      4,506      4,930
                      ---------- ---------- ---------- ---------- ----------
    Net interest                                                            
     income (tax                                                            
     equivalent)          28,708     26,069     24,934     24,766     24,193
Provision for loan                                                          
 losses                    2,950      3,500      2,312      2,850      1,950
                      ---------- ---------- ---------- ---------- ----------
    Net interest                                                            
     income after                                                           
     provision for                                                          
     loan losses          25,758     22,569     22,622     21,916     22,243
Non-interest income        7,659      9,026      7,979      7,971      7,176
Non-interest expense      22,546     28,784     21,162     21,290     20,721
                      ---------- ---------- ---------- ---------- ----------
Income before income                                                        
 tax expense              10,871      2,811      9,439      8,597      8,698
Income tax expense                                                          
 (tax equivalent)*         3,851        550      3,230      2,896      2,981
                      ---------- ---------- ---------- ---------- ----------
    Net income        $    7,020 $    2,261 $    6,209 $    5,701 $    5,717
                      ========== ========== ========== ========== ==========
                                                                            
(1) Does not reflect allowance for loan losses of $28,114, $28,282, $27,587,
 $27,787, and $28,245.                                                      
* Tax exempt income assumed at a statutory 35% federal rate.                
                                                                            
                                                                            
                                                                            

 
                                 For the Quarter Ended                      
            --------------------------------------------------------------- 
              12/31/12        9/30/12     6/30/12     3/31/12     12/31/11  
            -----------     ----------- ----------- ----------- ----------- 
Performance                                                                 
 Ratios                                                                     
 (annualized)                                                                   
       
Return on                                                                   
 average                                                                    
 assets            0.73%           0.26%       0.80%       0.73%       0.74%
Return on                                                                   
 average                                                                    
 stockholders' 
 equity            5.65%           1.89%       5.65%       5.22%       5.26%
Return on                                                                   
 average                                                                    
 tangible                                                                   
 equity (1)        8.71%           2.92%       9.01%       8.36%       8.53%
Non-interest                                                                
 income to                                                                  
 average                                                                    
 assets            0.80%           1.04%       1.02%       1.02%       0.93%
Non-interest                                                                
 expense to                                                                 
 average                                                                    
 assets            2.36%           3.32%       2.72%       2.73%       2.68%
GAAP                                                                        
 operating                                                                  
 efficiency        63.4%           84.0%       66.0%       66.8%       68.1%
Core                                                                        
 operating                                                                  
 efficiency                                                                 
 (1)               62.9%           72.0%       65.5%       67.9%       67.8%
Analysis of                                                                 
 Net                                                                        
 Interest                                                                   
 Income                                                                     
Yield on                                                                    
 loans             5.04%           4.97%       5.01%       5.03%       5.13%
Yield on                                                                    
 investment                                                                 
 securities                                                                 
 - tax                                                                      
 equivalent                                                                
 (2)               2.29%           2.44%       2.79%       2.81%       2.96%
Yield on                                                                    
 earning                                                                    
 assets -                                                                   
 tax                                                                        
 equivalent                                                                
 (2)               3.98%           4.01%       4.20%       4.22%       4.26%
Cost of                                                                     
 deposits          0.28%           0.27%       0.22%       0.21%       0.23%
Cost of                                                                     
 borrowings        3.58%           3.65%       3.77%       3.52%       3.65%
Cost of                                                                     
 interest                                                                   
 bearing                                                                    
 liabilities       0.79%           0.83%       0.78%       0.84%       0.92%
Net interest                                                                
 rate spread                                                                
 - tax                                                                      
 equivalent                                                                 
 basis(2)          3.19%           3.18%       3.42%       3.38%       3.34%
Net interest                                                                
 margin- tax                                                                
 equivalent                                                                 
 basis(2)          3.37%           3.38%       3.59%       3.57%       3.54%
Capital                                                                     
 Information                                                                
 Data                                                                       
Tier 1                                                                      
 leverage                                                                   
 ratio -                                                                    
 Bank only         8.21%           7.49%       8.67%       8.32%       8.51%
Tier 1 risk-                                                                
 based                                                                      
 capital -                                                                  
 Bank only  $   297,090 (3) $   289,441 $   257,621 $   252,586 $   247,433 
Total risk-                                                                 
 based                                                                      
 capital -                                                                  
 Bank only      325,411 (3)     317,929     283,033     277,614     273,911 
Tangible                                                                    
 capital                                                                    
 consolidated                                                                
 (1)            323,710         320,711     280,091     274,837     272,515 
Tangible                                                                    
 capital as                                                                 
 a % of                                                                     
 tangible                                                                   
 assets                                                                     
 consolidated                                                                
 (1)               8.94%           8.32%       9.38%       9.02%       9.34%
Shares of                                                                   
 common                                                                     
 stock                                                                      
 outstanding 44,348,787      44,173,470  37,899,007  37,899,007  37,883,008 
Shares                                                                      
 repurchased                                                                
 during qtr                                                                 
 (open                                                                      
 market)              -               -           -           -           - 
Basic                                                                       
 weighted                                                                   
 average                                                                    
 common                                                                     
 shares                                                                     
 outstanding 43,637,315      41,054,458  37,302,693  37,280,651  37,252,464 
Diluted                                                                     
 weighted                                                                   
 average                                                                    
 common                                                                     
 shares                                                                     
 outstanding 43,721,091      41,099,237  37,330,467  37,316,778  37,252,464 
Basic                                                                       
 earnings                                                                   
 per common                                                                 
 share      $      0.16     $      0.06 $      0.17 $      0.15 $      0.15 
Diluted                                                                     
 earnings                                                                   
 per common                                                                 
 share             0.16            0.06        0.17        0.15        0.15 
Dividends                                                                   
 declared                                                                   
 per common                                                                 
 share             0.06            0.06        0.06        0.06        0.06 
Book value                                                                  
 per share        11.14           11.12       11.73       11.60       11.55 
Tangible                                                                    
 book value                                                                 
 per common                                                                 
 share (1)         7.30            7.26        7.39        7.25        7.19 
Asset                                                                       
 Quality                                                                    
 Measurements                                                                   
       
Non-                                                                        
 performing                                                                 
 loans                                                                      
 (NPLs):                                                                    
 non-accrual$    27,730     $    35,444 $    41,048 $    47,269 $    40,777 
Non-                                                                        
 performing                                                                 
 loans                                                                      
 (NPLs):                                                                    
 still                                                                      
 accruing         5,823           4,370       3,450       4,693       5,136 
Other real                                                                  
 estate                                                                     
 owned            7,053           6,403       7,292       5,828       5,625 
Non-                                                                        
 performing                                                                 
 assets                                                                     
 (NPAs)          40,606          46,217      51,790      57,790      51,538 
Net charge-                                                                 
 offs             3,118           2,805       2,512       3,308       1,622 
Net charge-                                                                 
 offs as %                                                                  
 of average                                                                 
 loans                                                                      
 (annualized)      0.58%           0.57%       0.55%       0.74%       0.37%
NPLs as % of                                                                
 total loans       1.53%           1.88%       2.40%       2.89%       2.59%
NPAs as % of                                                                
 total                                                                      
 assets            1.07%           1.15%       1.64%       1.80%       1.67%
Allowance                                                                   
 for loan                                                                   
 losses as %                                                                
 of NPLs           83.8%           71.0%       62.0%       53.5%       61.5%
Allowance                                                                   
 for loan                                                                   
 losses as %                                                                
 of total                                                                   
 loans             1.28%           1.33%       1.49%       1.54%       1.59%
Allowance                                                                   
 for loan                                                                   
 losses as %                                                                
 of total,                                                                  
 excluding                                                                  
 Gotham(1)         1.41%           1.47%       1.49%       1.54%       1.59%
Special                                                                     
 mention                                                                    
 loans      $    29,755     $    42,422 $    37,555 $    37,379 $    18,424 
Substandard                                                                 
 / doubtful                                                                 
 loans           83,109          88,674      88,395      89,135      99,383 
            ----------- --------------- ----------- ----------- ----------- 
(1) See reconciliation of GAAP measure to 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 December 31, 2012. 
                                                                            
                                                                            
                                                                            
Non GAAP                                                                    
 Financial                                                                  
 Measures                     As of and for the Quarter Ended               
                ----------------------------------------------------------- 
(in thousands                                                               
 except share                                                               
 and per share                                                              
 data)            12/31/12    9/30/12     6/30/12     3/31/12     12/31/11  
                ----------- ----------- ----------- ----------- ----------- 
                                                                            
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    $ 3,789,514 $ 4,022,982 $ 3,150,040 $ 3,210,871 $ 3,084,166 
Goodwill and                                                                
 other                                                                      
 amortizable                                                                
 intangibles       (170,173)   (170,411)   (164,579)   (164,862)   (165,167)
                ----------- ----------- ----------- ----------- ----------- 
Tangible assets   3,619,341   3,852,571   2,985,461   3,046,009   2,918,999 
                ----------- ----------- ----------- ----------- ----------- 
Stockholders'                                                               
 equity             493,883     491,122     444,670     439,699     437,682 
Goodwill and                                                                
 other                                                                      
 amortizable                                                                
 intangibles       (170,173)   (170,411)   (164,579)   (164,862)   (165,167)
                ----------- ----------- ----------- ----------- ----------- 
Tangible                                                                    
 stockholders'                                                              
 equity             323,710     320,711     280,091     274,837     272,515 
                ----------- ----------- ----------- ----------- ----------- 
Shares of common                                                            
 stock                                                                      
 outstanding at                                                             
 period end      44,348,787  44,173,470  37,899,007  37,899,007  37,883,008 
Tangible capital                                                            
 as a % of                                                                  
 tangible assets       8.94%       8.32%       9.38%       9.02%       9.34%
Tangible book                                                               
 value per share$      7.30 $      7.26 $      7.39 $      7.25 $      7.19 
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         $   492,506 $   475,652 $   441,956 $   439,384 $   431,129 
Average goodwill                                                            
 and other                                                                  
 amortizable                                                                
 intangibles       (172,723)   (167,623)   (164,751)   (165,045)   (165,360)
                ----------- ----------- ----------- ----------- ----------- 
Average tangible                                                            
 stockholders'                                                              
 equity             319,783     308,029     277,205     274,339     265,769 
                ----------- ----------- ----------- ----------- ----------- 
Net income            7,020       2,261       6,209       5,701       5,717 
Net income, if                                                              
 annualized          27,851       8,995      24,972      22,929      22,682 
Return on                                                                   
 average                                                                    
 tangible equity       8.71%       2.92%       9.01%       8.36%       8.53%
The Company believes that the return on average tangible stockholders'      
 equity is useful as a tool to help measure and asses a company's use of    
 equity.                                                                    
The following table shows the reconciliation of the operating efficiency    
 ratio:                                                                     
Net interest                                                                
 income         $    27,923 $    25,239 $    24,082 $    23,905 $    23,238 
Non-interest                                                                
 income               7,659       9,026       7,979       7,971       7,176 
                ----------- ----------- ----------- ----------- ----------- 
Total net                                                                   
 revenues            35,582      34,265      32,061      31,876      30,414 
Tax equivalent                                                              
 adjustment on                                                              
 securities                                                                 
 interest income        785         830         852         861         955 
Net gain on                                                                 
 sales of                                                                   
 securities          (1,416)     (3,152)     (2,412)     (2,899)     (1,989)
Other than                                                                  
 temporary loss                                                             
 on securities           25           3           6           -          38 
Other, (other                                                               
 gains and fair                                                             
 value loss on                                                              
 interest rate                                                              
 caps)                   (4)        (64)         14          40           3 
                ----------- ----------- ----------- ----------- ----------- 
Core total                                                                  
 revenues            34,972      31,882      30,521      29,878      29,421 
                ----------- ----------- ----------- ----------- ----------- 
Non-interest                                                                
 expense             22,546      28,784      21,162      21,290      20,721 
Merger related                                                              
 expense                  -      (4,928)       (451)       (299)       (247)
Foreclosed                                                                  
 property                                                                   
 expense               (285)       (573)       (428)       (412)       (205)
Amortization of                                                             
 intangible                                                                 
 assets                (261)       (334)       (283)       (305)       (323)
                ----------- ----------- ----------- ----------- ----------- 
Core non-                                                                   
 interest                                                                   
 expense             22,000      22,949      20,000      20,274      19,946 
                ----------- ----------- ----------- ----------- ----------- 
Core efficiency                                                             
 ratio                 62.9%       72.0%       65.5%       67.9%       67.8%
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     $ 2,193,129 $ 2,119,472 $ 1,851,027 $ 1,799,112 $ 1,775,893 
Gotham loans        194,518     201,794           -           -           - 
                ----------- ----------- ----------- ----------- ----------- 
Total loans,                                                                
 excluding                                                                  
 Gotham loans     1,998,611   1,917,678   1,851,027   1,799,112   1,775,893 
Allowance for                                                               
 loan losses         28,114      28,282      27,587      27,787      28,245 
Allowance for                                                               
 loan losses to                                                             
 total loans           1.28%       1.33%       1.49%       1.54%       1.59%
Allowance for                                                               
 loan losses to                                                             
 total loans,                                                               
 excluding                                                                  
 Gotham loans          1.41%       1.47%         NA          NA          NA 
As required by GAAP, the Company recorded at fair value the loans acquired  
 in the Gotham transaction. These loans contain no allowance for loan       
 losses in losses for the periods reflected above.                          

  
PROVIDENT BANK 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 
 
 
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