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

Provident New York Bancorp Announces Fourth Quarter and Fiscal Year 2013 
Earnings 
2013 Performance Reflects Strong Loan Volume, Improved Efficiency and
Positive Credit Quality Trends 
MONTEBELLO, NY -- (Marketwired) -- 10/29/13 --   Provident New York
Bancorp (NYSE: PBNY), the parent company of Provident Bank, today
announced fourth quarter and full year results for the period ended
September 30, 2013. Net income for the quarter was $5.3 million, or
$0.12 per diluted share, compared to net income of $2.3 million, or
$0.06 per diluted share for the same quarter last year; and $6.4
million, or $0.15 per diluted share for the linked quarter ended June
30, 2013. For the year ended September 30, 2013 net income was $25.3
million, or $0.58 per diluted share, compared to net income of $19.9
million, or $0.52 per diluted share for the fiscal year ended
September 30, 2012. 
Net income for the fourth quarter and fiscal year 2013 was impacted
by merger-related expenses associated with the Sterling Bancorp
transaction and a charge for asset write-downs which totaled $1.3
million and $3.3 million, respectively. Excluding the impact of these
expenses, net income for the fourth quarter was $6.1 million, or
$0.14 per diluted share; and net income for fiscal 2013 was $27.6
million, or $0.63 per diluted share. See the reconciliation of these
non-GAAP measures on page 12. 
Results for the fourth quarter and fiscal year 2013 include an
increase in interest expense due to the $100 million senior notes
offering completed on July 2, 2013. The senior notes offering was
completed in connection with the pending merger with Sterling
Bancorp. Interest expense on the senior notes was $1.4 million in the
fourth fiscal quarter. 
President's Comments 
 Jack Kopnisky, President and CEO, commented:
"We continued to successfully execute our strategy and deliver
results in fiscal 2013. For the year, excluding the impact of
merger-related expenses and a charge for asset write-downs, our net
income reached $27.6 million and our diluted earnings per share were
$0.63. These results represent growth in net income of 12.9% as
compared to fiscal 2012. Year-over-year, net gains on sale of
securities decreased by $2.9 million, net of tax, further
demonstrating the positive momentum in our gr
owth and profitability.  
Our commercial banking teams continued to deliver results as
demonstrated by our strong origination volumes. For fiscal 2013, our
relationship teams generated $1.2 billion of new loan volume, which
represents growth of 48.2% over fiscal 2012. Total outstanding loan
balances grew by $293 million reaching $2.4 billion at September 30,
2013, which represents year-over-year growth of 13.8%. We continued
to focus on growing our commercial loans; in fiscal 2013, our
commercial and industrial and commercial real estate portfolios grew
by $301.0 million, which represents growth of 21% over prior year
balances. 
Our core operating efficiency is improving as we continue to make
progress towards achieving the long-term efficiency goals we have
previously outlined. For the fiscal year 2013, our core total
revenues grew by 11.5% while our core non-interest expense grew by
2.0%. Our core operating efficiency ratio was 62.6% for the fiscal
year 2013, which represents an improvement of 579 basis points
relative to 2012. 
Our credit quality has continued to show positive trends across all
of our portfolios. Year-over-year, our non-performing loans decreased
$12.9 million to $26.9 million and our criticized and classified
loans decreased by $56.3 million to $74.8 million. Our credit quality
ratios improved significantly during the year; our ratio of
non-performing loans to total loans declined by 76 basis points to
1.12% and our allowance for loan losses to non-performing loans
increased to 107.3%. The trends in the overall risk ratings of our
commercial loan portfolio continued to improve. 
Our capital and liquidity position remain strong. Our Tier 1 leverage
ratio was approximately 9.33% at Provident Bank and our consolidated
tangible equity to tangible assets ratio was 8.09%. We have ample
capital and liquidity to support our growth and execute our strategy. 
As we announced on October 21, we have received all required
regulatory and shareholder approvals for our merger with Sterling
Bancorp and anticipate we will complete the merger after the close of
business on October 31, 2013. We will have completed the transaction
in approximately six months from the announcement date, which is a
significant accomplishment. We are ready to move forward in building
a high performing combined institution that focuses on delivering
superior service to commercial and consumer clients and accelerates
the growth, profitability and execution of our strategy." 
Key Highlights  


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

  
Net Interest Income and Margin
 Fourth quarter fiscal 2013 compared to
the fourth quarter fiscal 2012 
 Net interest income was $28.1
million for the fourth quarter of fiscal 2013, up $2.9 million
compared to the fourth quarter of fiscal 2012 due mainly to higher
average loan volumes. Reflecting the current interest rate
environment, the tax-equivalent yield on investments decreased nine
basis points and yield on loans declined 27 basis points. As a
result, the yield on interest-earning assets declined 12 basis points
to 3.89% on a tax equivalent basis for the fourth quarter of fiscal
2013. The cost of total deposits decreased 12 basis points to 15
basis points from the year ago quarter, mainly due to the maturity of
higher priced certificates of deposit, which ran-off or re-priced to
current market interest rates. The cost of bo
rrowings decreased 77
basis points to 2.88%, as a higher portion of borrowings were
overnight borrowings in the fourth quarter of 2013; however, total
interest expense on borrowings increased by $1.7 million, mainly as a
result of the senior notes offering. The net interest margin on a
tax-equivalent basis was 3.23% compared to 3.38% for the same period
a year ago.  
Fourth quarter fiscal 2013 compared with linked quarter ended June
30, 2013 
 Net interest income for the quarter ended September 30,
2013 declined $209 thousand to $28.1 million, compared to $28.3
million for the linked quarter ended June 30, 2013. The decline in
net interest income for the fourth quarter was due to a $1.4 million
increase in interest expense incurred in connection with the senior
notes. Interest income on loans increased $1.1 million as a result of
strong loan growth during the quarter. Interest expense on deposits
continued to decline; inclusive of non-interest bearing deposits,
cost of deposits on total deposits was 15 basis points, compared to
17 basis points for the third fiscal quarter of 2013. Yield on loans
decreased 10 basis points to 4.70% reflecting current market
conditions and a reduction of $273 thousand, or four basis points, in
the accretion of the Gotham loan discount. The yield on
interest-earning assets decreased eight basis points to 3.89% from
3.97% in the linked quarter. Tax-equivalent net interest margin
decreased to 3.23% from 3.46% in the linked quarter.  
Non-interest Income
 Fourth quarter fiscal 2013 compared with fourth
quarter fiscal 2012 
 Non-interest income declined $2.4 million to
$6.6 million for the fourth quarter of fiscal 2013 driven by a
decrease in net gain on sales of securities of $1.4 million and an
aggregate decrease in investment management fees and title insurance
fees of $364 thousand. In fiscal 2012 we decided to sell the assets
of our former subsidiaries that were active in title insurance and
investment management businesses.  
Fourth quarter fiscal 2013 compared with linked quarter ended June
30, 2013 
 Non-interest income increased $19 thousand to $6.6 million
for the fourth fiscal quarter of 2013 mainly due to an increase in
deposit fees and service charges. Partially offsetting this increase
was lower net gain on sales of securities, which declined $144
thousand. In addition, gain on sale of loans decreased by $132
thousand. During fiscal 2013 we invested in a new title insurance
joint venture and deployed an investment management initiative which
gained momentum during the year. As a result, aggregate title
insurance and investment management fees increased $66 thousand on
aggregate compared to the linked quarter results. 
Non-interest Expense
 Fourth quarter fiscal 2013 compared with fourth
quarter fiscal 2012 
 Non-interest expense decreased $5.4 million to
$23.4 million relative to the fourth quarter of fiscal 2012,
principally the result of a decrease of $4.2 million in
merger-related expenses and a decrease of $464 thousand in
compensation and benefits. The merger-related expenses recorded in
the fourth fiscal quarter of 2012 were incurred in connection with
the acquisition of Gotham Bank.  
Fourth quarter fiscal 2013 compared with the linked quarter ended
June 30, 2013 
 Non-interest expense increased $1.6 million compared
to the linked quarter to $23.4 million. Compensation and benefits
increased $1.1 million due to several factors, which included an
increase in the accrual for bonus compensation, an increase in
temporary personnel and overtime expense associated with merger and
non-merger related projects and a decrease in the amount of deferred
loan origination costs, which are recognized as an adjustment to
yield over the life of the loan. Other real estate owned expenses
increased by $418 thousand due to write-downs to fair value upon
receipt of updated property appraisals. In addition, other expense
increased $672 thousand in the period due principally to a write-down
of $228 thousand on two branch properties, a charge of $152 thousand
to increase the reserve for off-balance sheet commitments and a $134
thousand write-down associated with the transfer of loan servicing to
an outside vendor.  
Income Taxes
 In the fourth quarter of fiscal 2013, the Company
recorded income tax expense at 38.3% compared to an estimated
effective tax rate of 30.8% in the linked quarter and (14.1)% for the
same period in fiscal 2012. The increase in the estimated effective
tax rate in the fourth quarter of fiscal 2013 was due to an increase
in merger-related expenses incurred in fiscal 2013 that will be fully
non-tax deductible. The effective tax rate for fiscal 2013 was 31.1%. 
Credit Quality
 Non-performing loans decreased $12.9 million to $26.9
million at September 30, 2013 compared to $39.8 million at September
30, 2012. During the fiscal year we exited several large credit
relationships which contributed to the decline. Net charge-offs for
the fourth quarter were $2.2 million compared to $3.1 million in the
linked quarter. Non-performing loans at September 30, 2013 were $4.6
million lower than the prior quarter end. The allowance for loan
losses at September 30, 2013 was $28.9 million, which represented
107.3% of non-performing loans and 1.20% of our total loan portfolio.
This compares to the linked quarter, in which the allowance for loan
losses was $28.4 million, which represented 90.2% of non-performing
loans and 1.21% of our total loan portfolio. The increase in the
allowance for loan losses was related to the higher balance of loans
outstanding at September 30, 2013. The allowance for loan losses to
total loans, excluding loans acquired in the Gotham transaction that
were recorded at fair value at the acquisition date and continue to
carry no allowance was 1.27% and 1.30%, at September 30, 2013 and
June 30, 2013, respectively. Please refer to the Company's
reconciliation of this non-GAAP measure on page 10.  
During the quarter, several properties were transferred to other real
estate owned ("OREO") which increased the balance by $1.6 million to
$6.0 million. In addition, there were two branch properties that were
formerly held as premises and equipment that were transferred to OREO
as discussed above in non-interest expense. 
Key Balance Sheet Changes Year-to-Date  


 
--  Total assets at September 30, 2013 were a record at $4.05 billion,
    increasing $26.2 million or 0.7% compared to September 30, 2012.
--  Loans at September 30, 2013 increased $293.4 million or 13.8% on an
    annual basis compared to September 30, 2012.
--  Commercial real estate and commercial and industrial loans increased
    $301.0 million or 21.3% compared to September 30, 2012.
--  Acquisition development and construction loans declined to $102.5
    million at September 30, 2013 from $144.1 million at September 30,
    2012.
--  Securities, excluding FHLB Stock, at September 30, 2013 increased
    $55.1 million as compared to September 30, 2012. As of September 30,
    2013, securities represented 29.8% of total assets compared to 28.7%
    at September 30, 2012. The increase in securities was the result of
    investing the net proceeds raised in the senior notes offering.
--  Deposits decreased $148.9 million between September 30, 2012 and
    September 30, 2013, mainly the result of a decrease in municipal
    deposits of $144
.7 million compared to September 30, 2012.
    Non-municipal deposits were relatively unchanged between September 30,
    2013 and 2012; however, non-interest bearing and interest bearing
    demand deposits increased $80.1 million, which represents
    year-over-year growth of approximately 10%.

  
Capital 
Provident Bank remained well capitalized at September 30, 2013 with a
Tier 1 leverage ratio of 9.3% based on period end assets. The
Company's stockholders' equity decreased $8.3 million from September
30, 2012, to $482.9 million at September 30, 2013. The decline in
stockholders' equity was the result of a net $26.5 million decline in
the fair value of available for sale securities during the fiscal
year. The two principal offsetting factors to this decline were net
earnings less dividends declared of $13.3 million and an increase in
accumulated other comprehensive income associated with benefit plans
of $4.3 million. Dividends declared were $0.12 per common share for
the fourth fiscal quarter of 2013 and $0.30 per common share for the
fiscal year ended September 30, 2013. On September 26, 2013, due to
the pending merger with Sterling, we declared a quarterly dividend of
$0.06 per common share that would have been regularly declared and
paid in in the calendar fourth quarter.  
Tangible book value per share decreased by $0.18 to $7.08 at
September 30, 2013 from $7.26 at September 30, 2012. For the quarter
ended September 30, 2013, the basic and diluted weighted average
common shares outstanding increased to 43.7 million and 43.9 million,
respectively, compared to 41.1 million, basic and diluted shares, for
the quarter ended September 30, 2012. The increase in basic and
diluted shares is mainly the result of the issuance of 6.2 million
shares of common stock in August 2012 in connection with the
acquisition of Gotham Bank. These shares were outstanding for the
entire fourth quarter ended September 30, 2013 and partially in the
quarter ended September 30, 2012.  
About Provident New York Bancorp
 Headquartered in Montebello, N.Y.,
Provident New York Bancorp is the holding company for Provident Bank,
a growing financial services firm with $4.0 billion in assets that
specializes in the delivery of service and solutions to business
owners, their families, and consumers in communities within the
greater New York City area through teams of dedicated and experienced
relationship managers. Provident Bank offers a complete line of
commercial, business, and consumer banking products and services. 
For more information, visit the Provident Bank web site at
www.providentbanking.com. 
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
 In addition
to historical information, this earnings release may contain
forward-looking statements for purposes of applicable securities
laws. Any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward-looking statements are subject to numerous assumptions, risks
and uncertainties. There are a number of important factors described
in documents previously filed by the Company with the Securities and
Exchange Commission, and other factors that could cause the Company's
actual results to differ materially from those contemplated by such
forward-looking statements. The Company undertakes no obligation to
publicly release the results of any revisions to those
forward-looking statements which may be made to reflect events or
circumstances after the date of this release or to reflect the
occurrence of unanticipated events. 
These forward-looking statements are subject to numerous assumptions,
risks and uncertainties which change over time. In addition to
factors previously disclosed in reports filed with the Securities and
Exchange Commission, the following factors, among others, could cause
actual results to differ materially from forward-looking statements:
difficulties and delays in integrating the Provident and Sterling
businesses or fully realizing cost savings and other benefits;
changes in asset quality and credit risk; the inability to sustain
revenue and earnings growth; changes in interest rates and capital
markets; inflation; customer borrowing, repayment, investment and
deposit practices; customer disintermediation; the introduction,
withdrawal, success and timing of business initiatives; competitive
conditions; the inability to realize cost savings or revenues or to
implement integration plans and other consequences associated with
mergers, acquisitions and divestitures; economic conditions;
including as a result of the financial performance of Sterling prior
to closing; the reaction to the Merger of the companies' customers,
employees and counterparties; and the impact, extent and timing of
technological changes, capital management activities, and other
actions of the Federal Reserve Board and legislative and regulatory
actions and reforms. These factors should be considered in evaluating
the forward-looking statements and undue reliance should not be
placed on such statements. Actual results or future events could
differ, possibly materially, from those that we anticipated in our
forward-looking statements, and future results could differ
materially from our historical performance. Forward-looking
statements speak only as of the date they are made and we undertake
no obligation to update these forward-looking statements to reflect
events or circumstances that occur after the date on which such
statements were made. 
Financial information contained in this release should be considered
to be an estimate pending the filing with the Securities and Exchange
Commission of the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 2013. While the Company is not aware of any
need to revise the results disclosed in this release, accounting
literature may require information received by management between the
date of this release and the filing of the 10-K to be reflected in
the results of the fiscal period, even though the new information was
received by management subsequent to the date of this release. 


 
                                                                            
                Provident New York Bancorp and Subsidiaries                 
          CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION          
         (unaudited, in thousands, except share and per share data)         
                                                                            
                                       9/30/2013    9/30/2012    6/30/2013  
                                      -----------  -----------  ----------- 
Assets:                                                                     
Cash and due from banks               $   113,090  $   437,982  $   109,166 
Investment securities                   1,208,392    1,153,248    1,065,724 
HVIA assets held for sale                      --        4,550           -- 
Loans held for sale                         1,011     
   7,505        1,539 
Loans:                                                                      
  Residential mortgage                    400,009      350,022      369,613 
  Commercial real estate                1,277,037    1,072,504    1,210,248 
  Commercial and industrial               439,787      343,307      453,145 
  Acquisition, development and                                              
   construction                           102,494      144,061      106,198 
  Consumer                                193,571      209,578      197,330 
                                      -----------  -----------  ----------- 
    Total loans, gross                  2,412,898    2,119,472    2,336,534 
  Allowance for loan losses               (28,877)     (28,282)     (28,374)
                                      -----------  -----------  ----------- 
    Total loans, net                    2,384,021    2,091,190    2,308,160 
Federal Home Loan Bank stock, at cost      24,312       19,249       28,368 
Premises and equipment, net                36,520       38,483       37,473 
Goodwill                                  163,117      163,247      163,117 
Other amortizable intangibles               5,891        7,164        6,201 
Bank owned life insurance                  60,914       59,017       60,412 
Other real estate owned                     6,022        6,403        4,376 
Other assets                               45,882       34,944       39,893 
                                      -----------  -----------  ----------- 
    Total assets                      $ 4,049,172  $ 4,022,982  $ 3,824,429 
                                      ===========  ===========  =========== 
Liabilities:                                                                
Deposits                              $ 2,962,294  $ 3,111,151  $ 2,739,214 
Borrowings                                560,986      345,176      552,805 
Mortgage escrow funds                      12,646       11,919       25,915 
Other liabilities                          30,380       63,614       26,330 
                                      -----------  -----------  ----------- 
    Total liabilities                   3,566,306    3,531,860    3,344,264 
Stockholders' equity                      482,866      491,122      480,165 
                                      -----------  -----------  ----------- 
    Total liabilities and                                                   
     stockholders' equity             $ 4,049,172  $ 4,022,982  $ 3,824,429 
                                      ===========  ===========  =========== 
                                                                            
Shares of common stock outstanding at                                       
 period end                            44,351,046   44,173,470   44,353,276 
Book value per share                  $     10.89  $     11.12  $     10.83 
Tangible book value per share                7.08         7.26         7.01 
                                                                            
                                                                            
                                                                            
                Provident New York Bancorp and Subsidiaries                 
                CONSOLIDATED CONDENSED STATEMENTS OF INCOME                 
         (unaudited, in thousands, except share and per share data)         
                                                                            
                                                     For the Twelve Months  
                       For the Quarter Ended                 Ended          
                ----------------------------------- ----------------------- 
                 9/30/2013   6/30/2013   9/30/2012   9/30/2013   9/30/2012  
                ----------- ----------- ----------- ----------- ----------- 
Interest and                                                                
 dividend                                                                   
 income:                                                                    
  Loans and                                                                 
   loan fees    $    27,723 $    26,638 $    24,396 $   107,810 $    91,010 
  Securities                                                                
   taxable            4,748       4,189       3,909      17,509      16,538 
  Securities                                                                
   non-taxable        1,235       1,500       1,543       5,682       6,497 
  Other earning                                                             
   assets               197         266         265       1,060         992 
                ----------- ----------- ----------- ----------- ----------- 
  Total                                                                     
   interest                                                                 
   income            33,903      32,593      30,113     132,061     115,037 
Interest                                                                    
 expense:                                                                   
  Deposits            1,051       1,151       1,789       5,923       5,581 
  Borrowings          4,744       3,125       3,085      13,971      12,992 
                ----------- ----------- ----------- ----------- ----------- 
Total interest                                                              
 expense              5,795       4,276       4,874      19,894      18,573 
                ----------- ----------- ----------- ----------- ----------- 
Net interest                                                                
 income              28,108      28,317      25,239     112,167      96,464 
Provision for                                                               
 loan losses          2,700       3,900       3,500      12,150      10,612 
                ----------- ----------- ----------- ----------- ----------- 
Net interest                                                                
 income after                                                               
 provision for                                                              
 loan losses         25,408      24,417      21,739     100,017      85,852 
Non-interest                                                                
 income:                                                                    
  Deposit fees                                                              
   and service                                                              
   charges            2,835       2,615       3,065      10,964      11,377 
  Net gain on                                                               
   sales of                                                                 
   securities         1,801       1,945       3,152       7,391      10,452 
  Other than                                                                
   temporary                                                                
   loss on                                                                  
   securities            --          --          (3)        (32)        (47)
  Investment                                                                
   management                                                               
   fees                 673         613         776       2,413       3,143 
  Title                                                                     
   insurance                                                                
   fees                  71          65         332         395       1,106 
  Bank owned                                                                
   life                                                                     
   insurance            502         496         512       1,998       2,050 
  Gain on sale                                                              
   of loans             297         429         429       1,979       1,897 
  Loss on sale                                                              
   of HVIA               --          --        (135)         --        (135)
  Other                 421         418         898       2,584       2,309 
                ----------- ----------- ----------- ----------- ----------- 
Total non-                                                                  
 interest                                                                   
 income               6,600       6,581       9,026      27,692      32,152 
Non-interest                                                                
 expense:                                                                   
  Compensation                                                              
   and benefits      12,409      11,320      12,873      47,833      46,038 
  Stock-based                                                     
          
   compensation                                                             
   plans                513         547         302       2,239       1,187 
  Occupancy and                                                             
   office                                                                   
   operations         3,766       3,423       3,959      14,953      14,457 
  Merger-                                                                   
   related                                                                  
   expenses             714       1,516       4,928       2,772       5,925 
  Advertising                                                               
   and                                                                      
   promotion            416         307         369       1,502       1,849 
  Professional                                                              
   fees                 740         526       1,136       3,393       4,247 
  Data and                                                                  
   check                                                                    
   processing           460         588         715       2,520       2,802 
  Amortization                                                              
   of                                                                       
   intangible                                                               
   assets               310         337         334       1,296       1,245 
  FDIC                                                                      
   insurance                                                                
   and                                                                      
   regulatory                                                               
   assessments          664         875         843       3,010       3,096 
  ATM/debit                                                                 
   card expense         400         465         438       1,722       1,711 
  Other real                                                                
   estate owned                                                             
   expense              390         (28)        573       1,562       1,618 
  Other               2,585       1,913       2,314       8,239       7,782 
                ----------- ----------- ----------- ----------- ----------- 
Total non-                                                                  
 interest                                                                   
 expense             23,367      21,789      28,784      91,041      91,957 
                ----------- ----------- ----------- ----------- ----------- 
Income before                                                               
 income tax                                                                 
 expense              8,641       9,209       1,981      36,668      26,047 
Income tax                                                                  
 expense              3,312       2,833        (280)     11,414       6,159 
                ----------- ----------- ----------- ----------- ----------- 
Net income      $     5,329 $     6,376 $     2,261 $    25,254 $    19,888 
                =========== =========== =========== =========== =========== 
  Basic                                                                     
   earnings per                                                             
   share        $      0.12 $      0.15 $      0.06 $      0.58 $      0.52 
  Diluted                                                                   
   earnings per                                                             
   share               0.12        0.15        0.06        0.58        0.52 
  Dividends                                                                 
   declared per                                                             
   share               0.12        0.06        0.06        0.30        0.24 
Weighted                                                                    
 average common                                                             
 shares:                                                                    
  Basic          43,742,903  43,801,867  41,054,458  43,722,313  38,227,653 
  Diluted        43,859,834  43,906,158  41,099,237  43,763,628  38,248,046 
                                                                            
                                                                            
                                                                            
                 Provident New York Bancorp and Subsidiaries                
                           SELECTED FINANCIAL DATA                          
         (unaudited, in thousands, except share and per share data)         
                                                                            
                                  As of and for the Quarter Ended           
                      ------------------------------------------------------
End of Period          9/30/2013  6/30/2013  3/31/2013 12/31/2012  9/30/2012
                      ---------- ---------- ---------- ---------- ----------
Total assets          $4,049,172 $3,824,429 $3,710,440 $3,789,514 $4,022,982
Securities available                                                        
 for sale                954,393    889,747    945,678    991,298  1,010,872
Securities held to                                                          
 maturity                253,999    175,977    183,535    139,874    142,376
Loans, gross (1)       2,412,898  2,336,534  2,204,555  2,193,129  2,119,472
Goodwill                 163,117    163,117    163,117    163,247    163,247
Other amortizable                                                           
 intangibles               5,891      6,201      6,538      6,926      7,164
Deposits               2,962,294  2,739,214  2,799,658  2,904,384  3,111,151
Municipal deposits                                                          
 (included above)        757,066    465,566    537,070    538,212    901,739
Borrowings               560,986    552,805    367,976    345,411    345,176
Stockholders' equity     482,866    480,165    494,711    493,883    491,122
Tangible equity          313,858    310,847    325,056    323,710    320,711
Average Balances                                                            
Total assets          $3,907,960 $3,745,356 $3,804,660 $3,792,201 $3,451,055
Loans, gross:                                                               
Residential mortgage     379,640    366,823    360,840    344,064    352,724
Commercial real                                                             
 estate                1,247,055  1,175,094  1,138,333  1,107,779    989,349
Commercial and                                                              
 industrial              443,349    398,622    368,896    354,137    263,922
Acquisition,                                                                
 development and                                                            
 construction            104,856    114,286    122,937    138,881    156,726
Consumer                 194,718    199,861    203,492    208,064    210,650
Loans, total (1)       2,369,618  2,254,686  2,194,498  2,152,925  1,973,371
Securities (taxable)     963,949    909,312    967,889    954,372    841,373
Securities (non-                                                            
 taxable)                157,480    184,325    181,803    174,201    181,540
Total earning assets   3,529,321  3,378,655  3,403,209  3,380,875  3,070,315
Deposits:                                                                   
Non-interest bearing                                                        
 demand                  669,067    625,684    641,194    649,077    592,962
Interest bearing                                                    
        
 demand                  426,602    461,390    508,129    469,180    398,493
Savings (including                                                          
 mortgage escrow                                                            
 funds)                  601,272    581,106    575,380    531,107    539,904
Money market             715,351    777,857    877,101    908,262    756,655
Certificates of                                                             
 deposit                 335,616    338,017    355,917    380,244    303,788
Total deposits and                                                          
 mortgage escrow       2,747,908  2,784,054  2,957,721  2,937,870  2,591,802
Borrowings               653,147    440,579    345,717    345,951    336,217
Equity                   478,491    494,049    492,725    492,506    475,652
Tangible equity          309,327    324,540    322,683    319,783    308,029
Condensed Tax                                                               
 Equivalent Income                                                          
 Statement                                                                  
Interest and dividend                                                       
 income               $   33,903 $   32,593 $   32,420 $   33,145 $   30,113
Tax equivalent                                                              
 adjustment*                 666        808        802        785        830
Interest expense           5,795      4,276      4,601      5,222      4,874
                      ---------- ---------- ---------- ---------- ----------
Net interest income                                                         
 (tax equivalent)         28,774     29,125     28,621     28,708     26,069
Provision for loan                                                          
 losses                    2,700      3,900      2,600      2,950      3,500
                      ---------- ---------- ---------- ---------- ----------
Net interest income                                                         
 after provision for                                                        
 loan losses              26,074     25,225     26,021     25,758     22,569
Non-interest income        6,600      6,581      6,852      7,659      9,026
Non-interest expense      23,367     21,789     23,339     22,546     28,784
                      ---------- ---------- ---------- ---------- ----------
Income before income                                                        
 tax expense               9,307     10,017      9,534     10,871      2,811
Income tax expense                                                          
 (tax equivalent)*         3,978      3,641      3,005      3,851        550
                      ---------- ---------- ---------- ---------- ----------
Net income            $    5,329 $    6,376 $    6,529 $    7,020 $    2,261
                      ========== ========== ========== ========== ==========
                                                                            
(1) Does not reflect allowance for loan losses of $28,877, $28,374, $27,544,
 $28,114 and $28,282.                                                       
*Tax exempt income assumed at a statutory 35% federal tax rate.             
                                                                            
                                                                            
                                                                            
                Provident New York Bancorp and Subsidiaries         
                         SELECTED FINANCIAL RATIOS                  
        (unaudited, in thousands, except share and per share data)  
                                                                    
                                            For the Quarter Ended           
                                --------------------------------------------
Per Share Data                   9/30/2013       6/30/2013       3/31/2013  
                                -----------     -----------     ----------- 
Basic earnings per share        $      0.12     $      0.15     $      0.15 
Diluted earnings per share             0.12            0.15            0.15 
Dividends declared per share           0.12            0.06            0.06 
Tangible book value per share          7.08            7.01            7.33 
Shares of common stock                                                      
 outstanding                     44,351,046      44,353,276      44,353,276 
Basic weighted average common                                               
 shares outstanding              43,742,903      43,801,867      43,743,640 
Diluted weighted average common                                             
 shares outstanding              43,859,834      43,906,158      43,848,486 
Performance Ratios (annualized)                                             
Return on average assets               0.54%           0.68%           0.70%
Return on average equity               4.42%           5.18%           5.37%
Return on average tangible                                                  
 equity (1)                            6.83%           7.88%           8.21%
Core operating efficiency (1)          63.6%           59.1%           64.6%
Analysis of Net Interest Income                                             
Yield on loans                         4.70%           4.80%           4.93%
Yield on investment securities                                              
 - tax equivalent(2)                   2.35%           2.38%           2.32%
Yield on earning assets - tax                                               
 equivalent(2)                         3.89%           3.97%           3.96%
Cost of deposits                       0.15%           0.17%           0.22%
Cost of borrowings                     2.88%           2.84%           3.49%
Cost of interest bearing                                                    
 liabilities                           0.84%           0.66%           0.70%
Net interest rate spread - tax                                              
 equivalent basis(2)                   3.05%           3.31%           3.26%
Net interest margin - tax                                                   
 equivalent basis(2)                   3.23%           3.46%           3.41%
Capital                                                                     
Tier 1 leverage ratio - Bank                                                
 only                                  9.33%           8.49%           8.62%
Tier 1 risk-based capital -                                                 
 Bank only                      $   363,274 (3) $   311,507 (3) $   304,696 
Total risk-based capital - Bank                                             
 only                               392,376 (3)     340,077 (3)     332,447 
Tangible equity as a % of                                                   
 tangible assets - consolidated                                             
 (1)                                   8.09%           8.50%           9.18%
                                                                            
Asset Quality                                                               
Non-performing loans (NPLs)                                                 
 non-accrual                    $    22,807     $    27,244     $    27,019 
Non-performing loans (NPLs)                                                 
 still accruing                       4,099           4,216           4,257 
Other real estate owned               6,022           4,376           5,486 
Non-performing assets (NPAs)         32,928          35,836          36,762 
Net charge-offs                       2,197           3,070           3,170 
Net charge-offs as a % of                                                   
 average loans (annualized)            0.37%           0.54%           0.58%
NPLs as a % of total loa
ns             1.12%           1.35%           1.42%
NPAs as a % of total assets            0.81%           0.94%           0.99%
Allowance for loan losses as a                                              
 % of NPLs                            107.3%           90.2%           88.1%
Allowance for loan losses as a                                              
 % of total loans                      1.20%           1.21%           1.25%
Allowance for loan losses as a                                              
 % of total loans, excluding                                                
 Gotham loans(1)                       1.27%           1.30%           1.36%
Special mention loans           $    13,530     $    24,327     $    41,778 
Substandard / doubtful loans         61,230          62,165          70,688 
                                -----------     -----------     ----------- 
 
                                 For the Quarter Ended   
                               ------------------------- 
Per Share Data                   12/31/2012   9/30/2012  
                                -----------  ----------- 
Basic earnings per share        $      0.16  $      0.06 
Diluted earnings per share             0.16         0.06 
Dividends declared per share           0.06         0.06 
Tangible book value per share          7.30         7.26 
Shares of common stock                                   
 outstanding                     44,348,787   44,173,470 
Basic weighted average common                            
 shares outstanding              43,637,315   41,054,458 
Diluted weighted average common                          
 shares outstanding              43,721,091   41,099,237 
Performance Ratios (annualized)                          
Return on average assets               0.73%        0.26%
Return on average equity               5.65%        1.89%
Return on average tangible                               
 equity (1)                            8.71%        2.92%
Core operating efficiency (1)          62.9%        72.0%
Analysis of Net Interest Income                          
Yield on loans                         5.04%        4.97%
Yield on investment securities                           
 - tax equivalent(2)                   2.29%        2.44%
Yield on earning assets - tax                            
 equivalent(2)                         3.98%        4.01%
Cost of deposits                       0.28%        0.27%
Cost of borrowings                     3.58%        3.65%
Cost of interest bearing                                 
 liabilities                           0.79%        0.83%
Net interest rate spread - tax                           
 equivalent basis(2)                   3.19%        3.18%
Net interest margin - tax                                
 equivalent basis(2)                   3.37%        3.38%
Capital                                                  
Tier 1 leverage ratio - Bank                             
 only                                  8.23%        7.49%
Tier 1 risk-based capital -                              
 Bank only                      $   297,089  $   289,441 
Total risk-based capital - Bank                          
 only                               325,410      317,929 
Tangible equity as a % of                                
 tangible assets - consolidated                          
 (1)                                   8.94%        8.32%
                                                         
Asset Quality                                            
Non-performing loans (NPLs)                              
 non-accrual                    $    27,730  $    35,444 
Non-performing loans (NPLs)                              
 still accruing                       5,823        4,370 
Other real estate owned               7,053        6,403 
Non-performing assets (NPAs)         40,606       46,217 
Net charge-offs                       3,118        2,805 
Net charge-offs as a % of                                
 average loans (annualized)            0.58%        0.57%
NPLs as a % of total loans             1.53%        1.88%
NPAs as a % of total assets            1.07%        1.15%
Allowance for loan losses as a                           
 % of NPLs                             83.8%        71.0%
Allowance for loan losses as a                           
 % of total loans                      1.28%        1.33%
Allowance for loan losses as a                           
 % of total loans, excluding                             
 Gotham loans(1)                       1.41%        1.47%
Special mention loans           $    29,755  $    42,422 
Substandard / doubtful loans         83,109       88,674 
                                -----------  ----------- 
                                                                            
(1) See reconciliation of non-GAAP measure on following page.               
(2) Tax equivalent adjustment represents interest income earned on municipal
 securities divided by the applicable Federal tax rate of 35% for all       
 periods presented.                                                         
(3) Represents preliminary results for the quarter ended September 30, 2013.
                                                                            
                                                                            
                                                                            
                Provident New York Bancorp and Subsidiaries                 
                        NON-GAAP FINANCIAL MEASURES                         
         (unaudited, in thousands, except share and per share data)         
                                                                            
                              As of and for the Quarter Ended               
                ----------------------------------------------------------- 
                 9/30/2013   6/30/2013   3/31/2013   12/31/2012  9/30/2012  
                ----------- ----------- ----------- ----------- ----------- 
The Company provides supplemental reporting of non-GAAP measures as         
 management believes this information is useful to investors.               
The following table shows the reconciliation of stockholders' equity to     
 tangible equity and the tangible equity ratio:                             
Total assets    $ 4,049,172 $ 3,824,429 $ 3,710,440 $ 3,789,514 $ 4,022,982 
Goodwill and                                                                
 other                                                                      
 amortizable                                                                
 intangibles       (169,008)   (169,318)   (169,655)   (170,173)   (170,411)
                ----------- ----------- ----------- ----------- ----------- 
Tangible assets   3,880,164   3,655,111   3,540,785   3,619,341   3,852,571 
                ----------- ----------- ----------- ----------- ----------- 
Stockholders'                                                               
 equity             482,866     480,165     494,711     493,883     491,122 
Goodwill and                                                                
 other                                                                      
 amortizable                                                                
 intangibles       (169,008)   (169,318)   (169,655)   (170,173)   (170,411)
                ----------- ----------- ----------- ----------- ----------- 
Tangible                                                                    
 stockholders'                                                              
 equity             313,858     310,847     325,056     323,710     320,711 
                ----------- ----------- ----------- ----------- ----------- 
Shares of                                                                   
 common stock                                                               
 outstanding at                                  
                           
 period end      44,351,046  44,353,276  44,353,276  44,348,787  44,173,470 
Tangible equity                                                             
 as a % of                                                                  
 tangible                                                                   
 assets                8.09%       8.50%       9.18%       8.94%       8.32%
Tangible book                                                               
 value per                                                                  
 share          $      7.08 $      7.01 $      7.33 $      7.30 $      7.26 
The Company believes that tangible equity is useful as a tool to help       
assess a company's capital position.                                        
                                                                            
The following table shows the reconciliation of return on average tangible  
equity:                                                                     
                                                                            
Average                                                                     
 stockholders'                                                              
 equity         $   478,491 $   494,049 $   492,725 $   492,506 $   475,652 
Average                                                                     
 goodwill and                                                               
 other                                                                      
 amortizable                                                                
 intangibles       (169,164)   (169,509)   (170,042)   (172,723)   (167,623)
                ----------- ----------- ----------- ----------- ----------- 
Average                                                                     
 tangible                                                                   
 stockholders'                                                              
 equity             309,327     324,540     322,683     319,783     308,029 
                ----------- ----------- ----------- ----------- ----------- 
Net income            5,329       6,376       6,529       7,020       2,261 
Net income, if                                                              
 annualized          21,142      25,574      26,479      27,851       8,995 
Return on                                                                   
 average                                                                    
 tangible                                                                   
 equity                6.83%       7.88%       8.21%       8.71%       2.92%
The Company believes that the return on average tangible stockholders'      
equity is useful as a tool to help asses a company's use of tangible        
equity.                                                                     
                                                                            
The following table shows the reconciliation of the allowance for loan      
losses to total loans and to total loans excluding Gotham loans:            
                                                                            
Total loans     $ 2,412,898 $ 2,336,534 $ 2,204,555 $ 2,193,129 $ 2,119,472 
Gotham loans       (133,493)   (152,825)   (176,383)   (194,518)   (201,794)
Total loans,                                                                
 excluding                                                                  
 Gotham loans     2,279,405   2,183,709   2,028,172   1,998,611   1,917,678 
Allowance for                                                               
 loan losses         28,877      28,374      27,544      28,114      28,282 
Allowance for                                                               
 loan losses to                                                             
 total loans           1.20%       1.21%       1.25%       1.28%       1.33%
Allowance for                                                               
 loan losses to                                                             
 total loans,                                                               
 excluding                                                                  
 Gotham loans          1.27%       1.30%       1.36%       1.41%       1.47%
                ----------- ----------- ----------- ----------- ----------- 
As required by GAAP, the Company recorded at fair value the loans acquired  
in the Gotham transaction. These loans carry no allowance for loan losses   
for the periods reflected above.                                            
                                                                            
                                                                            
                                                                            
                Provident New York Bancorp and Subsidiaries                 
                        NON-GAAP FINANCIAL MEASURES                         
         (unaudited, in thousands, except share and per share data)         
                                                                            
                                 As of and for the Quarter Ended            
                     ------------------------------------------------------ 
                      9/30/2013  6/30/2013  3/31/2013 12/31/2012  9/30/2012 
                     ---------- ---------- ---------- ---------- ---------- 
The following table shows the reconciliation of the quarterly core          
 operating efficiency ratio:                                                
Net interest income  $   28,108 $   28,317 $   27,819 $   27,923 $   25,239 
Non-interest income       6,600      6,581      6,852      7,659      9,026 
                     ---------- ---------- ---------- ---------- ---------- 
Total net revenues       34,708     34,898     34,671     35,582     34,265 
Tax equivalent                                                              
 adjustment on                                                              
 securities interest                                                        
 income                     666        808        802        785        830 
Net gain on sales of                                                        
 securities              (1,801)    (1,945)    (2,229)    (1,416)    (3,152)
Other than temporary                                                        
 loss on securities          --         --          7         25          3 
Other, (other gains                                                         
 and fair value loss                                                        
 on interest rate                                                           
 caps)                       81         --         --         (4)       (64)
                     ---------- ---------- ---------- ---------- ---------- 
Core total revenues      33,654     33,761     33,251     34,972     31,882 
                     ---------- ---------- ---------- ---------- ---------- 
Non-interest expense     23,367     21,789     23,339     22,546     28,784 
Merger-related                                                              
 expenses                  (714)    (1,516)      (542)        --     (4,928)
Charge for asset                                                            
 write-downs               (564)        --         --         --         -- 
Other real estate                                                           
 owned expense             (390)        28       (915)      (285)      (573)
Amortization of                                                             
 intangible assets         (310)      (337)      (388)      (261)      (334)
                     ---------- ---------- ---------- ---------- ---------- 
Core non-interest                                                           
 expense                 21,389     19,964     21,4
94     22,000     22,949 
                     ---------- ---------- ---------- ---------- ---------- 
Core efficiency                                                             
 ratio                     63.6%      59.1%      64.6%      62.9%      72.0%
                                                                            
The following table shows the reconciliation of the full year core          
operating efficiency ratio:                                                 
                                                                            
                                                For the Twelve Months Ended 
                                               ---------------------------- 
                                                 9/30/2013      9/30/2012   
                                               -------------  ------------- 
                                                                            
Net interest income                            $     112,167  $      96,464 
Non-interest income                                   27,692         32,152 
                                               -------------  ------------- 
Total net revenues                                   139,859        128,616 
Tax equivalent adjustment on securities                                     
 interest income                                       3,060          3,498 
Net gain on sales of securities                       (7,391)       (10,452)
Other than temporary loss on securities                   32             47 
Other, (other gains and fair value loss on                                  
 interest rate caps)                                      77            (12)
                                               -------------  ------------- 
Core total revenues                                  135,637        121,697 
                                               -------------  ------------- 
Non-interest expense                                  91,041         91,957 
Merger-related expenses                               (2,772)        (5,925)
Charge for asset write-downs                            (564)            -- 
Other real estate owned expense                       (1,562)        (1,618)
Amortization of intangible assets                     (1,296)        (1,245)
                                               -------------  ------------- 
Core non-interest expense                             84,847         83,169 
                                               -------------  ------------- 
Core efficiency ratio                                   62.6%          68.3%

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


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

  
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 
 
 
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