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

Provident New York Bancorp Announces Second Quarter 2013 Earnings of $0.15 per 
Diluted Share 
MONTEBELLO, NY -- (Marketwired) -- 04/22/13 --   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  $    2
7,071  $    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 
   managment 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:                                                                   
  Compen-                                                                 
  sation and                                                                  
  benefits       11,805       12,299       11,395       24,104       22,320 
  Stock-                                                                    
   based                                                                    
   compen-                                                                 
   sation                                                                     
   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                                                                        
 equivalent(2)         2.32%          2.29%      2.44%      2.79%      2.81%
Yield on earning                                                            
 assets - tax                                                               
 equivalent(2)         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                                                             
 basis(2)              3.26%          3.19%      3.18%      3.42%      3.38%
Net interest                                                                
 margin - tax                                                               
 equivalent                                                                 
 basis(2)              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 loans(1)        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 asses 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.                                  

  
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 
 
 
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