Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,477.57 60.04 0.42%
TOPIX 1,169.19 2.60 0.22%
HANG SENG 22,760.24 64.23 0.28%

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


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

MONTEBELLO, NY -- (Marketwired) -- 07/23/13 -- Provident New York Bancorp (NYSE: PBNY), the parent company of Provident Bank, today announced third quarter results for the period ended June 30, 2013. Net income for the quarter was $6.4 million, or $0.15 per diluted share, compared to net income of $6.2 million, or $0.17 per diluted share for the same quarter last year; and $6.5 million, or $0.15 per diluted share for the linked quarter ended March 31, 2013. Excluding merger-related expenses, net income for the quarter was $7.4 million or $0.17 per diluted share, compared to net income of $6.5 million, or $0.18 per diluted share for the same quarter last year; and $6.9 million, or $0.16 per diluted share for the linked quarter ended March 31, 2013. See the reconciliation of this non-GAAP financial measure.

President's Comments Jack Kopnisky, President and CEO, commented: "We continued to successfully execute our strategy. In the third quarter we earned $6.4 million, a $167 thousand increase compared to the third quarter of 2012. Earnings declined $153 thousand compared to the linked quarter, which was mainly the result of an increase in merger-related expenses to $1.5 million compared to $542 thousand in the quarter ended March 31, 2013. Absent merger-related expenses, net income for the third fiscal quarter of 2013 increased $891 thousand, or 13.6% year-over-year and grew $492 thousand, or 7.1% on a linked quarter basis.

Our commercial banking teams are delivering results as demonstrated by our strong quarter with nearly $350 million in loan originations, which represents a 69% increase over loan originations in the fiscal third quarter of 2012 and an increase of 38% over the linked quarter. We increased our outstanding loan balances by $486 million, reaching $2.34 billion at June 30, 2013, which represents 26.2% growth over outstanding loans at June 30, 2012.

We improved operating efficiency during the quarter and have continued to focus on managing expenses. For the quarter ended June 30, 2013, our core efficiency ratio was below 60%. Our year-over-year growth in core total revenues was 10.6% while we held core operating expenses at the same levels as a year ago. Our method of calculating the core efficiency ratio is illustrated.

Our credit quality continues to improve. Although our non-performing loans of $31.5 million at June 30, 2013 increased $184 thousand compared to the linked quarter, our ratio of non-performing loans to total loans declined by seven basis points to 1.35% at June 30, 2013. Our allowance for loan losses to non-performing loans increased to 90.2% at June 30, 2013, and the positive trend in the risk ratings of our commercial loan portfolio continued as well.

Our capital and liquidity position remain strong. Our Tier 1 leverage ratio was approximately 8.49% at Provident Bank and our consolidated tangible equity to tangible assets ratio was 8.50%.

On July 2, 2013 we completed the capital raise we announced in connection with our pending merger with Sterling Bancorp (NYSE: STL). We raised $100 million through an offering of Senior Notes due 2018 at an interest rate of 5.50%. We will use most of the net proceeds to fund a capital contribution to Provident Bank, which will allow us to further accelerate our growth and execute our strategy.

We continue to focus primarily on serving small-to-middle market clients through a differentiated, team-based distribution strategy. We are working closely with Sterling Bancorp and continue to see tremendous opportunities in combining the two institutions. We are diligently planning all aspects of the integration through cross-functional teams from both organizations. We anticipate the merger will close during the fourth calendar quarter of 2013 and look forward to building a high performing combined institution."

Key Highlights


 
--  Total loan originations were $347.7 million compared to $253.2 million
    in the linked quarter, and $206.2 million for the third fiscal quarter
    of 2012.
--  Total loans reached $2.34 billion at June 30, 2013, a $132 million
    increase compared to March 31, 2013, and a $486 million year-over-year
    increase.
--  Tax equivalent net interest margin was 3.46% for the third quarter of
    fiscal 2013 compared to 3.41% in the linked quarter and 3.59% in the
    third quarter of fiscal 2012.
--  The allowance for loan losses increased to $28.4 million at June 30,
    2013 and the allowance as a percentage of non-performing loans
    increased to 90.2% from 88.1% at March 31, 2013. The allowance for
    loan losses as a percentage of total loans was 1.21% at June 30, 2013,
    compared to 1.25% in the linked quarter. The allowance ratios are
    inclusive of acquired Gotham loans that were recorded at fair value at
    acquisition date for which there is no additional allowance for loan
    losses at either June 30, 2013 or March 31, 2013.
--  Non-performing loans decreased from $39.8 million at September 30,
    2012, to $31.5 million at June 30, 2013.
--  Provision for loan losses was $3.9 million and increased by $1.3
    million compared to the linked quarter. For the third quarter of
    fiscal 2012, the provision for loan losses was $2.3 million.
--  The core efficiency ratio was 59.1% compared to 64.6% in the linked
    quarter and 65.5% for the third fiscal quarter of 2012. The
    improvement in the core efficiency ratio in the third fiscal quarter
    of 2013 as compared to the other periods was due to improvements in
    our net interest income and expense reductions in professional fees
    and compensation and benefits, which are discussed further below.
    Year-over-year core total revenues have grown 10.6%, while core
    non-interest expense was unchanged. See the reconciliation of this
    non-GAAP financial measure.

Net Interest Income and Margin Third quarter fiscal 2013 compared with third quarter fiscal 2012 Net interest income was $28.3 million for the third quarter of fiscal 2013, up $4.2 million compared to the third quarter of fiscal 2012 due mainly to higher average loan volumes. Reflecting the current interest rate environment, the tax-equivalent yield on investments decreased 41 basis points and yield on loans declined 21 basis points compared to the third quarter of fiscal 2012. As a result, the yield on interest-earning assets declined 23 basis points to 3.97% on a tax equivalent basis for the third quarter of fiscal 2013. The cost of total deposits decreased five basis points to 17 basis points from the year ago quarter, mainly due to the maturity of higher priced certificates of deposit which were re-priced to current market interest rates. The cost of borrowings decreased 93 basis points to 2.84%, as a higher portion of borrowings were overnight borrowings in the third quarter of 2013. The net interest margin on a tax-equivalent basis was 3.46% for the third quarter of fiscal 2013 compared to 3.59% for the same period a year ago.

Third quarter fiscal 2013 compared with linked quarter ended March 31, 2013 Net interest income for the quarter ended June 30, 2013 increased $498 thousand to $28.3 million, compared to $27.8 million for the linked quarter ended March 31, 2013. Interest income on loans increased $260 thousand as a result of strong loan growth during the quarter. In addition, interest expense on deposits continued to decline. Inclusive of non-interest bearing deposits, interest expense on total deposits was 17 basis points for the third fiscal quarter compared to 22 basis points for the second fiscal quarter of 2013. Yield on loans decreased 13 basis points and was 4.80%. The yield on interest earning assets increased one basis point to 3.97% from 3.96% in the linked quarter. As a result of the above mentioned factors the tax-equivalent net interest margin increased to 3.46% from 3.41% in the linked quarter.

Non-interest Income Third quarter fiscal 2013 compared with third quarter fiscal 2012 Non-interest income declined $1.4 million to $6.6 million for the third quarter of fiscal 2013 compared with the third quarter of fiscal 2012. The decrease was mainly due to a decrease in net gain on sales of securities of $467 thousand and an aggregate decrease in investment management fees and title insurance fees of $373 thousand. In fiscal 2012 we sold the assets of our former subsidiaries that were active in title insurance and investment management businesses.

Third quarter fiscal 2013 compared with linked quarter ended March 31, 2013 Non-interest income decreased $271 thousand to $6.6 million for the third fiscal quarter of 2013 compared to the linked quarter ended March 31, 2013. The decline was principally due to lower net gain on sales of securities, which declined $284 thousand. Also contributing to the decline in non-interest income were lower deposit fees and service charges of $121 thousand and a decline in gain on sale of loans of $78 thousand. Our new title insurance and investment management initiatives are gaining momentum and are beginning to contribute to our non-interest income. Aggregate title insurance and investment management fees increased $256 thousand compared to the linked quarter.

Non-interest Expense Third quarter fiscal 2013 compared with third quarter fiscal 2012 Non-interest expense increased $627 thousand to $21.8 million relative to the third quarter of fiscal 2012 principally the result of an increase of $1.1 million in merger-related expenses. Other factors that contributed to the increase were additional personnel expense associated with the continued growth in the number of our commercial banking teams and related occupancy expense. These increases were partially offset by a reduction in professional fees and foreclosed property expenses, which declined by $602 thousand and $456 thousand, respectively, as compared to the same period a year ago.

Third quarter fiscal 2013 compared with the linked quarter ended March 31, 2013 Non-interest expense declined $1.6 million compared to the linked quarter notwithstanding a $974 thousand increase in merger-related expenses associated with our pending merger with Sterling Bancorp. The decrease in non-interest expense was a result of lower professional fees of $386 thousand, lower foreclosed property expense of $943 thousand and a reduction in compensation and benefits of $485 thousand. The decrease in compensation and benefits was mainly driven by staff turnover, lower payroll taxes and an increase in deferred compensation due to higher volumes of loan originations in the quarter.

Income Taxes In the third quarter of fiscal 2013, the Company recorded income tax expense at 30.8% compared to an estimated effective tax rate of 25.2% in the linked quarter and 27.7% for the same period in fiscal 2012. The increase in the estimated effective tax rate in the third quarter of fiscal 2013 was due to our expectation that a portion of current and anticipated merger-related expenses will not be tax deductible.

Credit Quality Non-performing loans decreased to $31.5 million at June 30, 2013 compared to $39.8 million at September 30, 2012. During the first nine months of the fiscal year we exited several large credit relationships, which contributed to the decline. Net charge-offs for the third quarter were $3.1 million compared to $3.2 million in the linked quarter. Non-performing loans at June 30, 2013 were $184 thousand higher compared to the prior quarter end. The allowance for loan losses at June 30, 2013 was $28.4 million, which represented 90.2% of non-performing loans and 1.21% of our total loan portfolio. This compares to the linked quarter, in which the allowance for loan losses was $27.5 million, which represented 88.1% of non-performing loans and 1.25% of our total loan portfolio. A significant portion of the increase in the allowance for loan losses was related to the higher balance of loans outstanding at June 30, 2013. The allowance for loan losses to total loans, excluding loans acquired in the Gotham transaction that were recorded at fair value at the acquisition date and continue to carry no allowance was 1.30% and 1.36%, at June 30, 2013 and March 31, 2013, respectively. Please refer to the Company's reconciliation of this non-GAAP measure.

During the quarter, the balance of foreclosed properties declined $1.1 million to $4.4 million. Several properties were sold during the quarter, which reduced the balance by $1.3 million. We incurred $284 thousand of write-downs on properties to reflect current appraisal values. Partially offsetting these declines were additions to OREO which totaled $504 thousand.

Key Balance Sheet Changes Year-to-Date


 
--  Total assets at June 30, 2013 decreased $198.6 million or 4.94%
    compared to September 30, 2012, mainly related to a decrease in our
    cash balance of $328.8 million. Our cash balance at September 30, 2012
    was elevated given a seasonal increase in municipal deposits due to
    municipal tax collections that were subsequently drawn down.
--  Loans at June 30, 2013 increased $217.1 million or 13.7% on an annual
    basis compared to September 30, 2012.
--  Commercial real estate and commercial and industrial loans increased
    $247.6 million or 23.3% on an annual basis compared to September 30,
    2012.
--  Acquisition development and construction loans declined to $106.2
    million at June 30, 2013 from $144.1 million at September 30, 2012.
--  Securities at June 30, 2013 decreased $87.5 million as compared to
    September 30, 2012. As of June 30, 2013, securities represented 27.9%
    of total assets compared to 28.7% at September 30, 2012.
--  Deposits decreased $371.9 million between September 30, 2012 and June
    30, 2013. Municipal deposits decreased $436.2 million compared to
    September 30, 2012, as a result of seasonal tax deposits; this was
    partially offset by increases in other deposits of $64.2 million.

Capital and Liquidity Provident Bank remained well capitalized at June 30, 2013 with a Tier 1 leverage ratio of 8.49% based on period end assets. The Company's stockholders' equity decreased $11.0 million from September 30, 2012, to $480.2 million at June 30, 2013. Tangible book value per share decreased by $0.25 to $7.01 at June 30, 2013 from $7.26 at September 30, 2012. These declines were mainly the result of changes in interest rates which caused a decline in the accumulated other comprehensive income component of stockholders' equity during the period of $24.6 million. For the quarter ended June 30, 2013, the basic and diluted weighted average common shares outstanding increased to 43.8 million and 43.9 million, respectively, compared to 41.1 million, basic and diluted shares, for the quarter ended September 30, 2012 as a result of our equity capital raise in August 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 $3.8 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 https://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: 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; 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 June 30, 2013. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the 10-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 has filed with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4/A that includes 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 ABOUT THE PROPOSED MERGER. Investors and security holders may obtain a free copy of the preliminary proxy statement/prospectus and other filings containing information about Provident and Sterling at the SEC's website at www.sec.gov. The joint preliminary proxy statement/prospectus 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 and the preliminary proxy statement/prospectus related to the proposed merger, which is included in the registration statement on Form S-4/A that was filed with the SEC on July 17, 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 and the preliminary proxy statement/prospectus included in the Form S-4/A. Free copies of these documents may be obtained as described in the preceding paragraph. 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 definitive proxy statement/prospectus regarding the proposed merger when it becomes available.


 
                                                                            
Provident New York Bancorp and Subsidiaries                                 
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION                    
(unaudited, in thousands, except share and per share data)                  
                                                                            
                                       6/30/2013    9/30/2012    6/30/2012  
                                      -----------  -----------  ----------- 
Assets:                                                                     
Cash and due from banks               $   109,166  $   437,982  $   111,400 
Investment securities                   1,065,724    1,153,248      885,433 
HVIA assets held for sale                       -        4,550            - 
Loans held for sale                         1,539        7,505        5,369 
Loans:                                                                      
  Residential mortgage                    369,613      350,022      357,943 
  Commercial real estate                1,210,248    1,072,504      906,798 
  Commercial and industrial               453,145      343,307      207,966 
  Acquisition, development and                                              
   construction                           106,198      144,061      165,125 
  Consumer                                197,330      209,578      213,195 
                                      -----------  -----------  ----------- 
    Total loans, gross                  2,336,534    2,119,472    1,851,027 
  Allowance for loan losses               (28,374)     (28,282)     (27,587)
                                      -----------  -----------  ----------- 
    Total loans, net                    2,308,160    2,091,190    1,823,440 
Federal Home Loan Bank stock, at cost      28,368       19,249       18,207 
Premises and equipment, net                37,473       38,483       38,877 
Goodwill                                  163,117      163,247      160,861 
Other amortizable intangibles               6,201        7,164        3,718 
Bank owned life insurance                  60,412       59,017       58,506 
Foreclosed properties                       4,376        6,403        7,292 
Other assets                               39,893       34,944       36,937 
                                      -----------  -----------  ----------- 
    Total assets                      $ 3,824,429  $ 4,022,982  $ 3,150,040 
                                      ===========  ===========  =========== 
Liabilities:                                                                
Deposits                              $ 2,739,214  $ 3,111,151  $ 2,332,091 
Borrowings                                552,805      345,176      314,154 
Mortgage escrow funds                      25,915       11,919       24,223 
Other liabilities                          26,330       63,614       36,444 
                                      -----------  -----------  ----------- 
    Total liabilities                   3,344,264    3,531,860    2,706,912 
Stockholders' equity                      480,165      491,122      443,128 
                                      -----------  -----------  ----------- 
    Total liabilities and                                                   
     stockholders' equity             $ 3,824,429  $ 4,022,982  $ 3,150,040 
                                      ===========  ===========  =========== 
                                                                            
Shares of common stock outstanding at                                       
 period end                            44,353,276   44,173,470   37,899,007 
Book value per share                  $     10.83  $     11.12  $     11.69 
Tangible book value per share                7.01         7.26         7.35 
                                                                            
                                                                            
Provident New York Bancorp and Subsidiaries                                 
CONSOLIDATED CONDENSED STATEMENTS OF INCOME                                 
(unaudited, in thousands, except share and per share data)                  
                                                                            
                                                      For the Nine Months   
                       For the Quarter Ended                 Ended          
                ----------------------------------- ----------------------- 
                 6/30/2013   3/31/2013   6/30/2012   6/30/2013   6/30/2012  
                ----------- ----------- ----------- ----------- ----------- 
Interest and                                                                
 dividend                                                                   
 income:                                                                    
  Loans and                                                                 
   loan fees    $    26,638 $    26,378 $    22,312 $    80,087 $    66,614 
  Securities                                                                
   taxable            4,189       4,288       4,224      12,761      12,629 
  Securities                                                                
   non-taxable        1,500       1,490       1,581       4,447       4,954 
  Other earning                                                             
   assets               266         264         228         863         727 
                ----------- ----------- ----------- ----------- ----------- 
  Total                                                                     
   interest                                                                 
   income            32,593      32,420      28,345      98,158      84,924 
Interest                                                                    
 expense:                                                                   
  Deposits            1,151       1,624       1,262       4,872       3,792 
  Borrowings          3,125       2,977       3,001       9,227       9,907 
                ----------- ----------- ----------- ----------- ----------- 
Total interest                                                              
 expense              4,276       4,601       4,263      14,099      13,699 
                ----------- ----------- ----------- ----------- ----------- 
Net interest                                                                
 income              28,317      27,819      24,082      84,059      71,225 
Provision for                                                               
 loan losses          3,900       2,600       2,312       9,450       7,112 
                ----------- ----------- ----------- ----------- ----------- 
Net interest                                                                
 income after                                                               
 provision for                                                              
 loan losses         24,417      25,219      21,770      74,609      64,113 
Non-interest                                                                
 income:                                                                    
  Deposit fees                                                              
   and service                                                              
   charges            2,615       2,736       2,816       8,129       8,312 
  Net gain on                                                               
   sales of                                                                 
   securities         1,945       2,229       2,412       5,590       7,300 
  Other than                                                                
   temporary                                                                
   loss on                                                                  
   securities             -          (7)         (6)        (32)        (44)
  Investment                                                                
   management                                                               
   fees                 613         422         802       1,740       2,367 
  Title                                                                     
   insurance                                                                
   fees                  65           -         249         324         774 
  Bank owned                                                                
   life                                                                     
   insurance            496         491         518       1,496       1,538 
  Gain on sale                                                              
   of loans             429         507         578       1,682       1,468 
  Other                 418         474         610       2,163       1,411 
                ----------- ----------- ----------- ----------- ----------- 
Total non-                                                                  
 interest                                                                   
 income               6,581       6,852       7,979      21,092      23,126 
Non-interest                                                                
 expense:                                                                   
  Compensation                                                              
   and benefits      11,320      11,805      10,845      35,424      33,165 
  Stock-based                                                               
   compensation                                                             
   plans                547         679         326       1,726         885 
  Occupancy and                                                             
   office                                                                   
   operations         3,423       3,954       3,388      11,187      10,498 
  Merger-                                                                   
   related                                                                  
   expenses           1,516         542         451       2,058         997 
  Advertising                                                               
   and                                                                      
   promotion            307         535         440       1,086       1,480 
  Professional                                                              
   fees                 526         912       1,128       2,653       3,111 
  Data and                                                                  
   check                                                                    
   processing           588         823         705       2,060       2,087 
  Amortization                                                              
   of                                                                       
   intangible                                                               
   assets               337         388         283         986         911 
  FDIC                                                                      
   insurance                                                                
   and                                                                      
   regulatory                                                               
   assessments          875         753         782       2,346       2,253 
  ATM/debit                                                                 
   card expense         465         415         437       1,322       1,273 
  Foreclosed                                                                
   property                                                                 
   expense              (28)        915         428       1,172       1,045 
  Other               1,913       1,618       1,949       5,654       5,468 
                ----------- ----------- ----------- ----------- ----------- 
Total non-                                                                  
 interest                                                                   
 expense             21,789      23,339      21,162      67,674      63,173 
                ----------- ----------- ----------- ----------- ----------- 
Income before                                                               
 income tax                                                                 
 expense              9,209       8,732       8,587      28,027      24,066 
Income tax                                                                  
 expense              2,833       2,203       2,378       8,102       6,439 
                ----------- ----------- ----------- ----------- ----------- 
Net income      $     6,376 $     6,529 $     6,209 $    19,925 $    17,627 
                =========== =========== =========== =========== =========== 
  Basic                                                                     
   earnings per                                                             
   share        $      0.15 $      0.15 $      0.17 $      0.46 $      0.47 
  Diluted                                                                   
   earnings per                                                             
   share               0.15        0.15        0.17        0.45        0.47 
  Dividends                                                                 
   declared per                                                             
   share               0.06        0.06        0.06        0.18        0.18 
Weighted                                                                    
 average common                                                             
 shares:                                                                    
  Basic          43,801,867  43,743,640  37,302,693  43,766,402  37,278,507 
  Diluted        43,906,158  43,848,486  37,330,467  43,850,601  37,292,366 
                                                                            
                                                                            
Selected Financial                                                          
 Condition Data:                  As of and for the Quarter Ended           
                      ------------------------------------------------------
(in thousands except                                                        
 share and per share                                                        
 data)                 6/30/2013  3/31/2013 12/31/2012  9/30/2012  6/30/2012
                      ---------- ---------- ---------- ---------- ----------
End of Period                                                               
Total assets          $3,824,429 $3,710,440 $3,789,514 $4,022,982 $3,150,040
Securities available                                                        
 for sale                889,747    945,678    991,298  1,010,872    714,200
Securities held to                                                          
 maturity                175,977    183,535    139,874    142,376    171,233
Loans, gross (1)       2,336,534  2,204,555  2,193,129  2,119,472  1,851,027
Goodwill                 163,117    163,117    163,247    163,247    160,861
Other amortizable                                                           
 intangibles               6,201      6,538      6,926      7,164      3,718
Deposits               2,739,214  2,799,658  2,904,384  3,111,151  2,332,091
Municipal deposits                                                          
 (included above)        465,566    537,070    538,212    901,739    479,772
Borrowings               552,805    367,976    345,411    345,176    314,154
Equity                   480,165    494,711    493,883    491,122    444,670
Tangible equity          310,847    325,056    323,710    320,711    280,091
Average Balances                                                            
Total assets          $3,745,356 $3,804,660 $3,792,201 $3,451,055 $3,133,958
Loans, gross:                                                               
Residential mortgage     366,823    360,840    344,064    352,724    360,487
Commercial real                                                             
 estate                1,175,094  1,138,333  1,107,779    989,349    868,963
Commercial and                                                              
 industrial              398,622    368,896    354,137    263,922    205,051
Acquisition,                                                                
 development and                                                            
 construction            114,286    122,937    138,881    156,726    165,442
Consumer                 199,861    203,492    208,064    210,650    215,555
Loans total (1)        2,254,686  2,194,498  2,152,925  1,973,371  1,815,498
Securities (taxable)     909,312    967,889    954,372    841,373    778,782
Securities (non-                                                            
 taxable)                184,325    181,803    174,201    181,540    182,003
Total earning assets   3,378,655  3,403,209  3,380,875  3,070,315  2,797,093
Deposits:                                                                   
Non-interest bearing                                                        
 demand                  625,684    641,194    649,077    592,962    483,589
Interest bearing NOW                                                        
 accounts                461,390    508,129    469,180    398,493    412,072
Savings (including                                                          
 mortgage escrow                                                            
 funds)                  581,106    575,380    531,107    539,904    493,234
Money market             777,857    877,101    908,262    756,655    697,342
Certificates of                                                             
 deposit                 338,017    355,917    380,244    303,788    265,375
Total deposits and                                                          
 mortgage escrow       2,784,054  2,957,721  2,937,870  2,591,802  2,351,612
Borrowings               440,579    345,717    345,951    336,217    320,237
Equity                   494,049    492,725    492,506    475,652    441,956
Tangible equity          324,540    322,683    319,783    308,029    277,205
                                                                            
Selected Operating                                                          
 Data:                                                                      
Condensed Tax                                                               
 Equivalent Income                                                          
 Statement                                                                  
Interest and dividend                                                       
 income               $   32,593 $   32,420 $   33,145 $   30,113 $   28,345
Tax equivalent                                                              
 adjustment*                 808        802        785        830        852
Interest expense           4,276      4,601      5,222      4,874      4,263
                      ---------- ---------- ---------- ---------- ----------
Net interest income                                                         
 (tax equivalent)         29,125     28,621     28,708     26,069     24,934
Provision for loan                                                          
 losses                    3,900      2,600      2,950      3,500      2,312
                      ---------- ---------- ---------- ---------- ----------
Net interest income                                                         
 after provision for                                                        
 loan losses              25,225     26,021     25,758     22,569     22,622
Non-interest income        6,581      6,852      7,659      9,026      7,979
Non-interest expense      21,789     23,339     22,546     28,784     21,162
                      ---------- ---------- ---------- ---------- ----------
Income before income                                                        
 tax expense              10,017      9,534     10,871      2,811      9,439
Income tax expense                                                          
 (tax equivalent)*         3,641      3,005      3,851        550      3,230
                      ---------- ---------- ---------- ---------- ----------
                      $    6,376 $    6,529 $    7,020 $    2,261 $    6,209
                      ========== ========== ========== ========== ==========
                                                                            
(1) Does not reflect allowance for loan losses of $28,374, $27,544, $28,114,
$28,282, and $27,587.                                                       
* Tax exempt income assumed at a statutory 35% federal tax rate.            
                                                                            

 
                                                                         
                                                For the Quarter Ended    
                                            -----------------------------
                                             6/30/2013      3/31/2013    
                                            -----------    -----------   
   Per Share Data                                                        
   Basic earnings per share                 $      0.15    $      0.15   
   Diluted earnings per share                      0.15           0.15   
   Dividends declared per share                    0.06           0.06   
   Book value per share                           10.83          11.15   
   Shares of common stock outstanding        44,353,276     44,353,276   
   Basic weighted average common shares                                  
    outstanding                              43,801,867     43,743,640   
   Diluted weighted average common shares                                
    outstanding                              43,906,158     43,848,486   
   Performance Ratios (annualized)                                       
   Return on average assets                        0.68%          0.70%  
   Return on average equity                        5.18%          5.37%  
   Return on average tangible equity (1)           7.88%          8.21%  
   Core operating efficiency (1)                   59.1%          64.6%  
   Analysis of Net Interest Income                                       
   Yield on loans                                  4.80%          4.93%  
   Yield on investment securities - tax                                  
    equivalent(2)                                  2.38%          2.32%  
   Yield on earning assets - tax                                         
    equivalent(2)                                  3.97%          3.96%  
   Cost of deposits                                0.17%          0.22%  
   Cost of borrowings                              2.84%          3.49%  
   Cost of interest bearing liabilities            0.66%          0.70%  
   Net interest rate spread - tax                                        
    equivalent basis(2)                            3.31%          3.26%  
   Net interest margin - tax equivalent                                  
    basis(2)                                       3.46%          3.41%  
   Capital                                                               
   Tier 1 leverage ratio - Bank only               8.49%          8.62%  
   Tier 1 risk-based capital - Bank only    $   311,508(3) $   304,696(3)
   Total risk-based capital - Bank only         340,078(3)     332,447(3)
   Tangible equity as a % of tangible                                    
    assets - consolidated (1)                      8.50%          9.18%  
   Asset Quality                                                         
   Non-performing loans (NPLs): non-accrual $    27,244    $    27,019   
   Non-performing loans (NPLs): still                                    
    accruing                                      4,216          4,257   
   Other real estate owned                        4,376          5,486   
   Non-performing assets (NPAs)                  35,836         36,762   
   Net charge-offs                                3,070          3,170   
   Net charge-offs a % of average loans                                  
    (annualized)                                   0.54%          0.58%  
   NPLs a % of total loans                         1.35%          1.42%  
   NPAs a % of total assets                        0.94%          0.99%  
   Allowance for loan losses a % of NPLs           90.2%          88.1%  
   Allowance for loan losses a % of total                                
    loans                                          1.21%          1.25%  
   Allowance for loan losses a % of total                                
    loans, excluding Gotham loans(1)               1.30%          1.36%  
   Special mention loans                    $    24,327    $    41,778   
   Substandard / doubtful loans                  62,165         70,688   
                                            -----------    -----------   
 
                                                                            
                                               For the Quarter Ended        
                                        ----------------------------------- 
                                         12/31/2012  9/30/2012   6/30/2012  
                                        ----------- ----------- ----------- 
Per Share Data                                                              
Basic earnings per share                $      0.16 $      0.06 $      0.17 
Diluted earnings per share                     0.16        0.06        0.17 
Dividends declared per share                   0.06        0.06        0.06 
Book value per share                          11.14       11.12       11.73 
Shares of common stock outstanding       44,348,787  44,173,470  37,899,007 
Basic weighted average common shares                                        
 outstanding                             43,637,315  41,054,458  37,302,693 
Diluted weighted average common shares                                      
 outstanding                             43,721,091  41,099,237  37,330,467 
Performance Ratios (annualized)                                             
Return on average assets                       0.73%       0.26%       0.80%
Return on average equity                       5.65%       1.89%       5.65%
Return on average tangible equity (1)          8.71%       2.92%       9.01%
Core operating efficiency (1)                  62.9%       72.0%       65.5%
Analysis of Net Interest Income                                             
Yield on loans                                 5.04%       4.97%       5.01%
Yield on investment securities - tax                                        
 equivalent(2)                                 2.29%       2.44%       2.79%
Yield on earning assets - tax                                               
 equivalent(2)                                 3.98%       4.01%       4.20%
Cost of deposits                               0.28%       0.27%       0.22%
Cost of borrowings                             3.58%       3.65%       3.77%
Cost of interest bearing liabilities           0.79%       0.83%       0.78%
Net interest rate spread - tax                                              
 equivalent basis(2)                           3.19%       3.18%       3.42%
Net interest margin - tax equivalent                                        
 basis(2)                                      3.37%       3.38%       3.59%
Capital                                                                     
Tier 1 leverage ratio - Bank only              8.23%       7.49%       8.67%
Tier 1 risk-based capital - Bank only   $   297,089 $   289,441 $   257,621 
Total risk-based capital - Bank only        325,410     317,929     283,033 
Tangible equity as a % of tangible                                          
 assets - consolidated (1)                     8.94%       8.32%       9.38%
Asset Quality                                                               
Non-performing loans (NPLs): non-accrual$    27,730 $    35,444 $    41,048 
Non-performing loans (NPLs): still                                          
 accruing                                     5,823       4,370       3,450 
Other real estate owned                       7,053       6,403       7,292 
Non-performing assets (NPAs)                 40,606      46,217      51,790 
Net charge-offs                               3,118       2,805       2,512 
Net charge-offs a % of average loans                                        
 (annualized)                                  0.58%       0.57%       0.55%
NPLs a % of total loans                        1.53%       1.88%       2.40%
NPAs a % of total assets                       1.07%       1.15%       1.64%
Allowance for loan losses a % of NPLs          83.8%       71.0%       62.0%
Allowance for loan losses a % of total                                      
 loans                                         1.28%       1.33%       1.49%
Allowance for loan losses a % of total                                      
 loans, excluding Gotham loans(1)              1.41%       1.47%       1.49%
Special mention loans                   $    29,755 $    42,422 $    37,555 
Substandard / doubtful loans                 83,109      88,674      88,395 
                                        ----------- ----------- ----------- 
                                                                            
(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 June 30, 2013.     
                                                                            
                                                                            
Non GAAP                                                                    
Financial                                                                   
Measures                      As of and for the Quarter Ended               
                ----------------------------------------------------------- 
(in thousands                                                               
except share                                                                
and per share                                                               
data)            6/30/2013   3/31/2013   12/31/2012  9/30/2012   6/30/2012  
                ----------- ----------- ----------- ----------- ----------- 
The Company provides supplemental reporting of non-GAAP measures as         
 management believes this information is useful to investors.               
The following table shows the reconciliation of stockholders' equity to     
 tangible equity and the tangible equity ratio:                             
Total assets    $ 3,824,429 $ 3,710,440 $ 3,789,514 $ 4,022,982 $ 3,150,040 
Goodwill and                                                                
 other                                                                      
 amortizable                                                                
 intangibles       (169,318)   (169,655)   (170,173)   (170,411)   (164,579)
                ----------- ----------- ----------- ----------- ----------- 
Tangible assets   3,655,111   3,540,785   3,619,341   3,852,571   2,985,461 
                ----------- ----------- ----------- ----------- ----------- 
Stockholders'                                                               
 equity             480,165     494,711     493,883     491,122     444,670 
Goodwill and                                                                
 other                                                                      
 amortizable                                                                
 intangibles       (169,318)   (169,655)   (170,173)   (170,411)   (164,579)
                ----------- ----------- ----------- ----------- ----------- 
Tangible                                                                    
 stockholders'                                                              
 equity             310,847     325,056     323,710     320,711     280,091 
                ----------- ----------- ----------- ----------- ----------- 
Shares of                                                                   
 common stock                                                               
 outstanding at                                                             
 period end      44,353,276  44,353,276  44,348,787  44,173,470  37,899,007 
Tangible equity                                                             
 as a % of                                                                  
 tangible                                                                   
 assets                8.50%       9.18%       8.94%       8.32%       9.38%
Tangible book                                                               
 value per                                                                  
 share          $      7.01 $      7.33 $      7.30 $      7.26 $      7.39 
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         $   494,049 $   492,725 $   492,506 $   475,652 $   441,956 
Average                                                                     
 goodwill and                                                               
 other                                                                      
 amortizable                                                                
 intangibles       (169,509)   (170,042)   (172,723)   (167,623)   (164,751)
                ----------- ----------- ----------- ----------- ----------- 
Average                                                                     
 tangible                                                                   
 stockholders'                                                              
 equity             324,540     322,683     319,783     308,029     277,205 
                ----------- ----------- ----------- ----------- ----------- 
Net income            6,376       6,529       7,020       2,261       6,209 
Net income, if                                                              
 annualized          25,574      26,479      27,851       8,995      24,972 
Return on                                                                   
 average                                                                    
 tangible                                                                   
 equity                7.88%       8.21%       8.71%       2.92%       9.01%
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         $    28,317 $    27,819 $    27,923 $    25,239 $    24,082 
Non-interest                                                                
 income               6,581       6,852       7,659       9,026       7,979 
                ----------- ----------- ----------- ----------- ----------- 
Total net                                                                   
 revenues            34,898      34,671      35,582      34,265      32,061 
Tax equivalent                                                              
 adjustment on                                                              
 securities                                                                 
 interest                                                                   
 income                 808         802         785         830         852 
Net gain on                                                                 
 sales of                                                                   
 securities          (1,945)     (2,229)     (1,416)     (3,152)     (2,412)
Other than                                                                  
 temporary loss                                                             
 on securities            -           7          25           3           6 
Other, (other                                                               
 gains and fair                                                             
 value loss on                                                              
 interest rate                                                              
 caps)                    -           -          (4)        (64)         14 
                ----------- ----------- ----------- ----------- ----------- 
Core total                                                                  
 revenues            33,761      33,251      34,972      31,882      30,521 
                ----------- ----------- ----------- ----------- ----------- 
Non-interest                                                                
 expense             21,789      23,339      22,546      28,784      21,162 
Merger related                                                              
 expense             (1,516)       (542)          -      (4,928)       (451)
Foreclosed                                                                  
 property                                                                   
 expense                 28        (915)       (285)       (573)       (428)
Amortization of                                                             
 intangible                                                                 
 assets                (337)       (388)       (261)       (334)       (283)
                ----------- ----------- ----------- ----------- ----------- 
Core non-                                                                   
 interest                                                                   
 expense             19,964      21,494      22,000      22,949      20,000 
                ----------- ----------- ----------- ----------- ----------- 
Core efficiency                                                             
 ratio                 59.1%       64.6%       62.9%       72.0%       65.5%
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     $ 2,336,534 $ 2,204,555 $ 2,193,129 $ 2,119,472 $ 1,851,027 
Gotham loans       (152,825)   (176,383)   (194,518)   (201,794)          - 
                ----------- ----------- ----------- ----------- ----------- 
Total loans,                                                                
 excluding                                                                  
 Gotham loans     2,183,709   2,028,172   1,998,611   1,917,678   1,851,027 
Allowance for                                                               
 loan losses         28,374      27,544      28,114      28,282      27,587 
Allowance for                                                               
 loan losses to                                                             
 total loans           1.21%       1.25%       1.28%       1.33%       1.49%
Allowance for                                                               
 loan losses to                                                             
 total loans,                                                               
 excluding                                                                  
 Gotham loans          1.30%       1.36%       1.41%       1.47%         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  
 in losses for the periods reflected above.                                 
                                                                            
                                                                            
Non-GAAP                                                                    
 Financial                                                                  
 Measures                      As of and for the Quarter Ended              
                ------------------------------------------------------------
(in thousands                                                               
 except share                                                               
 and per share                                                              
 data)           6/30/2013   3/31/2013   12/31/2012  9/30/2012    6/30/2012 
                ----------- ----------- ----------- -----------  -----------
The Company provides supplemental reporting of non-GAAP measures as         
 management believes this information is useful to investors.               
The following table shows the reconciliation of net income and earnings per 
 share excluding merger-related expenses:                                   
----------------------------------------------------------------------------
Income before                                                               
 income tax                                                                 
 expense        $     9,209 $     8,732 $    10,086 $     1,981  $     8,587
Income tax                                                                  
 expense              2,833       2,203       3,066        (280)       2,378
                ----------- ----------- ----------- -----------  -----------
Net income            6,376       6,529       7,020       2,261        6,209
                                                                            
Merger-related                                                              
 expenses             1,516         542           -       4,928          451
Income tax                                                                  
 benefit                466         137           -         697          125
                ----------- ----------- ----------- -----------  -----------
After-tax                                                                   
 merger-related                                                             
 expenses             1,050         405           -       4,231          326
                                                                            
                ----------- ----------- ----------- -----------  -----------
Net income                                                                  
 excluding                                                                  
 merger-related                                                             
 expenses       $     7,426 $     6,934 $     7,020 $     6,492  $     6,535
                =========== =========== =========== ===========  ===========
                                                                            
Diluted shares   43,906,158  43,848,486  43,721,091  41,099,237   37,330,467
Diluted EPS as                                                              
 reported       $      0.15 $      0.15 $      0.16 $      0.06  $      0.17
Diluted EPS                                                                 
 excluding                                                                  
 merger-related                                                             
 expenses       $      0.17 $      0.16 $      0.16 $      0.16  $      0.18

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

Provident New York Bancorp 400 Rella Boulevard Montebello, NY 10901-4243 T 845.369.8040 F 845.369.8255 https://www.providentbanking.com

Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement