Provident New York Bancorp Announces First Quarter 2013 Earnings of $0.16 per Diluted Share

MONTEBELLO, NY--(Marketwire - Jan 23, 2013) -  Provident New York Bancorp (the "Company") (NYSE: PBNY), the parent company of Provident Bank, today announced first quarter results for the period ended December 31, 2012. Net income for the quarter was $7.0 million, or $0.16 per diluted share, compared to net income of $5.7 million, or $0.15 per diluted share for the same quarter last year; and $2.3 million, or $0.06 per diluted share for the linked quarter ended September 30, 2012. 

President's Comments
Jack Kopnisky, President and CEO, commented: "We had a strong first quarter to kick-off our year. Earnings for the quarter were $7.0 million or $0.16 per share, a 23% increase compared to the first quarter of 2012 and an increase of 210% over the linked quarter, which had been significantly impacted by merger-related expenses related to the acquisition of Gotham Bank of New York. Earnings were driven by strong commercial loan growth, solid core deposit growth and our continued management of expenses. We also continue to improve our operating efficiency as our growth in revenues outpaced expenses. Our efficiency ratio was 62.9% for the first quarter of 2013.

"Our credit quality continued to improve across the most important metrics. Non-performing loans of $34 million at December 31, 2012 are down $6.3 million compared to the linked quarter. Our ratio of non-performing loans to total loans declined by 106 basis points to 1.53% at December 31, 2012 as compared to the year ago period. Our allowance for loan losses to non-performing loans increased to 84% at December 31, 2012, and the positive trend in the risk ratings of our loan portfolio continued as well.

"Our overall strategy of focusing primarily on middle market clients has strong momentum. We continue to see significant opportunities for full relationships in the market. Our pipelines of loans, deposits and fee income opportunities continue to be at record highs. These volumes are enabling us to diversify our loan portfolio from higher concentrations of real estate loans to a more balanced portfolio. Overall we are originating approximately 50% of our commercial loans and deposits in our new markets and approximately 50% in our legacy markets.

"We are pleased to report that the integration of the Gotham Bank acquisition is going as planned and is assisting us in accelerating our growth in the New York City market area.

"Finally we continue to maintain strong levels of capital and liquidity. Tier 1 leverage ratio was approximately 8.2% at the Bank level and our total risk-based capital ratio was approximately 13.5%."

Key highlights for the quarter

• Total loan originations were $291.1 million compared to $205.7 million in the linked quarter, and $231.6 million for the first fiscal quarter of 2012.
• Total loans reached $2.2 billion at December 31, 2012, a $73.7 million increase compared to September 30, 2012.
• Our allowance for loan losses remained relatively unchanged at $28.1 million at December 31, 2012, in large part due to the growth in our loan portfolio. The allowance for loan losses as a percentage of total loans was 1.28% at December 31, 2012, compared to 1.33% in the linked quarter. The allowance ratios are inclusive of acquired Gotham loans that were recorded at fair value at acquisition date and for which there is no additional allowance for loan losses at either December 31, 2012 or September 30, 2012. 
• Non-performing loans decreased from $39.8 million at September 30, 2012, to $33.6 million at December 31, 2012. The reduction in non-performing loans improved the allowance for loan losses to non-performing loans ratio to 84% at December 31, 2012. 
• Provision for loan losses was $3.0 million and decreased by $550 thousand compared to the linked quarter. For the first quarter of fiscal 2012, our provision for loan losses was $2.0 million.
• Net interest margin was 3.37% for the first quarter of fiscal 2013 compared to 3.38% in the linked quarter and 3.54% in the first quarter of fiscal 2012.

Net Interest Income and Margin 
First quarter fiscal 2013 compared with first quarter fiscal 2012
Net interest income was $27.9 million for the first quarter of fiscal 2013, up $4.7 million compared to the first quarter of fiscal 2012 due to higher average loan volumes. Reflecting the current interest rate environment, the tax-equivalent yield on investments decreased 67 basis points and loan yields declined nine basis points compared to the first quarter of fiscal 2012. As a result, the yield on interest-earning assets declined 28 basis points to 3.98% on a tax equivalent basis for the first quarter of fiscal 2013. The cost of deposits increased five basis points to 28 basis points from the year ago quarter, while the cost of borrowings decreased by seven basis points to 3.58%. The resulting net interest margin on a tax-equivalent basis was 3.37% for the first quarter of fiscal 2013 compared to 3.54% for the same period a year ago. 

First quarter fiscal 2013 compared with linked quarter ended September 30, 2012
Net interest income for the quarter ended December 31, 2012 increased $2.7 million to $27.9 million, compared to $25.2 million for the linked quarter ended September 30, 2012. This was primarily due to higher volumes. The tax-equivalent net interest margin decreased to 3.37% from 3.38% in the linked quarter. Yield on loans increased seven basis points and was 5.04%. Yield on interest earning assets declined three basis points to 3.98% from 4.01% at September 30, 2012. Deposit costs increased by one basis point, while the cost of borrowings decreased seven basis points.

Non-interest Income
First quarter fiscal 2013 compared with first quarter fiscal 2012
Non-interest income increased $483 thousand to $7.7 million for the first quarter of fiscal 2013 compared with first quarter of fiscal 2012. The increase was mainly driven by an increase in gain on sale of loans of $306 thousand given strong residential loan origination volume during the quarter and increases in other loan fees included in other non-interest income of $744 thousand. Net gain on sales of securities decreased by $573 thousand to $1.4 million.

First quarter fiscal 2013 compared with linked quarter ended September 30, 2012
Non-interest income decreased $1.4 million to $7.7 million for the first fiscal quarter of 2013 compared to the linked quarter ended September 30, 2012. Net gain on sales of securities declined by $1.7 million to $1.4 million for the first quarter of fiscal 2013 compared to $3.2 million for the linked quarter. Partially offsetting this decline were higher gain on sale of loans and other loan fees included in other non-interest income.

Non-interest Expense
First quarter fiscal 2013 compared with first quarter fiscal 2012
Non-interest expense increased $1.8 million to $22.5 million, when compared to the first quarter of fiscal 2012. This was principally attributed to an increase in personnel associated with the continued growth in the number of our commercial banking teams.

First quarter fiscal 2013 compared with the linked quarter ended September 30, 2012
Non-interest expense decreased $6.2 million, or 21.7% over the linked quarter. The decrease was mainly related to the $4.9 million in merger related costs associated with the Gotham acquisition in the quarter ended September 30, 2012. 

Income Taxes
The Company recorded income tax expense for the first quarter of fiscal 2013 at an effective tax rate of 30.4% compared to 26.2% for the same period in fiscal 2012. The increase in the tax rate is the result of increased operating revenue which causes the proportional impact of tax-exempt municipal securities interest and bank owned life insurance income to decline.

Credit Quality
Non-performing loans decreased to $33.6 million at December 31, 2012 compared to $39.8 million at September 30, 2012. We exited a large credit relationship in our Acquisition, Development and Construction ("ADC") portfolio that contributed to the decline. Net charge-offs for the quarter were $3.1 million compared to $2.8 million in the linked quarter. The allowance for loan losses at December 31, 2012 was $28.1 million, which represented 83.8% of non-performing loans and 1.28% of our total loan portfolio. This compares to the linked quarter, in which the allowance for loan losses was $28.3 million, which represented 71.0% of non-performing loans and 1.33% of our total loan portfolio. The allowance for loan losses to total loans, excluding loans acquired in the Gotham transaction that were recorded at fair value at the acquisition date and continue to carry no allowance was 1.41% and 1.47%, at December 31, 2012 and September 30, 2012, respectively. Please refer to the Company's reconciliation of this non-GAAP measure on page 9.

During the quarter, foreclosed properties increased $650 thousand to $7.1 million. Contributing to the increase were foreclosed ADC loans that totaled $1.3 million and one residential loan with a balance of $121 thousand. This was offset by sales and write-downs that totaled $731 thousand.

Key Balance Sheet Changes

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

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

About Provident New York Bancorp
Headquartered in Montebello, N.Y., Provident Bank, with $3.8 billion in assets, is a growing financial services firm that specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City area through teams of dedicated and experienced relationship managers. Provident Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Provident Bank web site at www.providentbanking.com.

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company's actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2012. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.

Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share and per share data)
					As of
					12/31/12				9/30/12
Assets:
Cash and due from banks					$	160,241			$	437,982
Total securities						1,131,172				1,153,248
HVIA assets held for sale						-				4,550
Loans held for sale						5,423				7,505
Loans:
	One- to four-family residential mortgage loans					352,014				350,022
	Commercial real estate loans					1,136,965				1,072,504
	Commercial and industrial loans					376,052				343,307
	Acquisition, development and construction loans					122,518				144,061
	Consumer loans					205,580				209,578
			Total loans, gross			2,193,129				2,119,472
	Allowance for loan losses					(28,114	)			(28,282	)
			Total loans, net			2,165,015				2,091,190
Federal Home Loan Bank stock, at cost						19,246				19,249
Premises and equipment, net						38,086				38,483
Goodwill						163,247				163,247
Other amortizable intangibles						6,926				7,164
Bank owned life insurance						59,526				59,017
Foreclosed properties						7,053				6,403
Other assets						33,579				34,944
			Total assets		$	3,789,514			$	4,022,982
Liabilities:
	Deposits
		Retail			$	167,369			$	167,050
		Commercial				501,667				412,630
		Municipal				15,779				367,624
		Personal NOW deposits				250,345				213,755
		Business NOW deposits				41,164				38,486
		Municipal NOW deposits				168,771				195,882
			Total transaction accounts			1,145,095				1,395,427
		Savings				560,039				506,538
		Money market deposits				834,544				821,704
		Certificates of deposit				364,706				387,482
			Total deposits			2,904,384				3,111,151
	Borrowings					345,411				345,176
	Mortgage escrow funds and other liabilities					45,836				75,533
			Total liabilities			3,295,631				3,531,860
Stockholders' equity						493,883				491,122
			Total liabilities and stockholders' equity		$	3,789,514			$	4,022,982
Shares of common stock outstanding at period end						44,348,787				44,173,470
Book value per share					$	11.14			$	11.12

Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited, in thousands, except share and per share data)
			For the Quarters Ended
			12/31/12				12/31/11				9/30/12
Interest and dividend income:
	Loans and loan fees		$	27,071			$	22,149			$	24,396
	Securities taxable			4,284				3,990				3,909
	Securities non-taxable			1,457				1,774				1,543
	Other earning assets			333				255				265
Total interest income				33,145				28,168				30,113
Interest expense:
	Deposits			2,097				1,313				1,789
	Borrowings			3,125				3,617				3,085
Total interest expense				5,222				4,930				4,874
Net interest income				27,923				23,238				25,239
Provision for loan losses				2,950				1,950				3,500
Net interest income after provision for loan losses				24,973				21,288				21,739
Non-interest income:
	Deposit fees and service charges		$	2,778			$	2,790			$	3,065
	Net gain on sales of securities			1,416				1,989				3,152
	Other than temporary loss on securities			(25	)			(38	)			(3	)
	Title insurance fees			259				260				332
	Bank owned life insurance			509				518				512
	Gain on sale of loans			746				440				429
	Gain on sale of premises and equipment			5				-				70
	Loss on sale of HVIA			-				-				(135	)
	Investment management fees			705				765				776
	Fair value loss on interest rate caps			(1	)			(3	)			(6	)
	Other			1,267				455				834
Total non-interest income				7,659				7,176				9,026
Non-interest expense:
	Compensation and benefits			12,299				10,549				12,873
	Stock-based compensation plans			500				275				302
	Merger related expenses			-				247				4,928
	Restructuring charge (severance/branch relocation)			-				376				-
	Occupancy and office operations			3,810				3,701				3,959
	Advertising and promotion			244				613				369
	Professional fees			1,215				927				1,136
	Data and check processing			649				672				715
	Amortization of intangible assets			261				323				334
	FDIC insurance and regulatory assessments			718				728				843
	ATM/debit card expense			442				411				438
	Foreclosed property expense			285				205				573
	Other			2,123				1,694				2,314
Total non-interest expense				22,546				20,721				28,784
Income before income tax expense				10,086				7,743				1,981
Income tax expense (benefit)				3,066				2,026				(280	)
Net income			$	7,020			$	5,717			$	2,261
	Basic earnings per common share		$	0.16			$	0.15			$	0.06
	Diluted earnings per common share			0.16				0.15				0.06
	Dividends declared			0.06				0.06				0.06
Weighted average common shares:
	Basic			43,637,315				37,252,464				41,054,458
	Diluted			43,721,091				37,252,464				41,099,237

Selected Financial Condition Data:			As of and for the Quarter Ended
(in thousands except share and per share data)			12/31/12			9/30/12			6/30/12			3/31/12			12/31/11
End of Period
Total assets			$	3,789,514		$	4,022,982		$	3,150,040		$	3,210,871		$	3,084,166
Loans, gross 1				2,193,129			2,119,472			1,851,027			1,799,112			1,775,893
Securities available for sale				991,298			1,010,872			714,200			852,717			785,462
Securities held to maturity				139,874			142,376			171,233			174,824			182,076
Bank owned life insurance				59,526			59,017			58,506			57,987			57,485
Goodwill				163,247			163,247			160,861			160,861			160,861
Other amortizable intangibles				6,926			7,164			3,718			4,001			4,306
Other non - earning assets				78,718			79,830			83,106			80,020			78,710
Deposits				2,904,384			3,111,151			2,332,091			2,368,988			2,135,555
Borrowings				345,411			345,176			314,154			313,849			468,543
Equity				493,883			491,122			444,670			439,699			437,682
Other comprehensive income related to investment securities reflected in stockholders' equity				12,548			15,066			14,141			13,780			15,823
Average Balances
Total assets			$	3,792,201		$	3,451,055		$	3,133,958		$	3,131,854		$	3,062,520
Loans, gross:
	One-to-four-family residential mortgage loans			344,064			352,724			360,487			374,498			385,269
	Commercial real estate loans			1,107,779			989,349			868,963			838,935			752,325
	Acquisition, development and construction loans			138,881			156,726			165,442			163,116			172,155
	Commercial and industrial loans			354,137			263,922			205,051			197,507			203,929
	Consumer loans			208,064			210,650			215,555			220,537			224,422
Loans total 1				2,152,925			1,973,371			1,815,498			1,794,593			1,738,100
Securities (taxable)				954,372			841,373			778,782			799,753			696,293
Securities (non-taxable)				174,201			181,540			182,003			185,062			205,366
Total earning assets				3,380,875			3,070,315			2,797,093			2,792,042			2,715,027
Non earning assets				411,326			380,740			336,865			339,812			347,493
Non-interest bearing checking				649,077			592,962			483,589			503,539			500,621
Interest bearing NOW accounts				469,180			398,493			412,072			389,846			398,885
Total transaction accounts				1,118,257			991,455			895,661			893,385			899,506
Savings (including mortgage escrow funds)				531,107			539,904			493,234			463,971			445,236
Money market deposits				908,262			756,655			697,342			654,013			577,387
Certificates of deposit				380,244			303,788			265,375			284,737			302,713
Total deposits and mortgage escrow				2,937,870			2,591,802			2,351,612			2,296,106			2,224,842
Total interest bearing deposits (including escrow)				2,288,793			1,998,840			1,868,023			1,792,567			1,724,221
Borrowings				345,951			336,217			320,237			375,766			392,785
Equity				492,506			475,652			441,956			439,384			431,129
Selected Operating Data:
Condensed Tax Equivalent Income Statement
Interest and dividend income			$	33,145		$	30,113		$	28,345		$	28,411		$	28,168
Tax equivalent adjustment*				785			830			852			861			955
Interest expense				5,222			4,874			4,263			4,506			4,930
		Net interest income (tax equivalent)		28,708			26,069			24,934			24,766			24,193
Provision for loan losses				2,950			3,500			2,312			2,850			1,950
		Net interest income after provision for loan losses		25,758			22,569			22,622			21,916			22,243
Non-interest income				7,659			9,026			7,979			7,971			7,176
Non-interest expense				22,546			28,784			21,162			21,290			20,721
Income before income tax expense				10,871			2,811			9,439			8,597			8,698
Income tax expense (tax equivalent)*				3,851			550			3,230			2,896			2,981
		Net income	$	7,020		$	2,261		$	6,209		$	5,701		$	5,717
1 Does not reflect allowance for loan losses of $28,114, $28,282, $27,587, $27,787, and $28,245.
* Tax exempt income assumed at a statutory 35% federal rate.

	For the Quarter Ended
	12/31/12				9/30/12			6/30/12			3/31/12			12/31/11
Performance Ratios (annualized)
Return on average assets		0.73	%			0.26	%		0.80	%		0.73	%		0.74	%
Return on average stockholders' equity		5.65	%			1.89	%		5.65	%		5.22	%		5.26	%
Return on average tangible equity 1		8.71	%			2.92	%		9.01	%		8.36	%		8.53	%
Non-interest income to average assets		0.80	%			1.04	%		1.02	%		1.02	%		0.93	%
Non-interest expense to average assets		2.36	%			3.32	%		2.72	%		2.73	%		2.68	%
GAAP operating efficiency		63.4	%			84.0	%		66.0	%		66.8	%		68.1	%
Core operating efficiency 1		62.9	%			72.0	%		65.5	%		67.9	%		67.8	%
Analysis of Net Interest Income
Yield on loans		5.04	%			4.97	%		5.01	%		5.03	%		5.13	%
Yield on investment securities - tax equivalent2		2.29	%			2.44	%		2.79	%		2.81	%		2.96	%
Yield on earning assets - tax equivalent2		3.98	%			4.01	%		4.20	%		4.22	%		4.26	%
Cost of deposits		0.28	%			0.27	%		0.22	%		0.21	%		0.23	%
Cost of borrowings		3.58	%			3.65	%		3.77	%		3.52	%		3.65	%
Cost of interest bearing liabilities		0.79	%			0.83	%		0.78	%		0.84	%		0.92	%
Net interest rate spread - tax equivalent basis2		3.19	%			3.18	%		3.42	%		3.38	%		3.34	%
Net interest margin- tax equivalent basis2		3.37	%			3.38	%		3.59	%		3.57	%		3.54	%
Capital Information Data
Tier 1 leverage ratio - Bank only		8.21	%			7.49	%		8.67	%		8.32	%		8.51	%
Tier 1 risk-based capital - Bank only	$	297,090		3	$	289,441		$	257,621		$	252,586		$	247,433
Total risk-based capital - Bank only		325,411		3		317,929			283,033			277,614			273,911
Tangible capital consolidated 1		323,710				320,711			280,091			274,837			272,515
Tangible capital as a % of tangible assets consolidated 1		8.94	%			8.32	%		9.38	%		9.02	%		9.34	%
Shares of common stock outstanding		44,348,787				44,173,470			37,899,007			37,899,007			37,883,008
Shares repurchased during qtr (open market)		-				-			-			-			-
Basic weighted average common shares outstanding		43,637,315				41,054,458			37,302,693			37,280,651			37,252,464
Diluted weighted average common shares outstanding		43,721,091				41,099,237			37,330,467			37,316,778			37,252,464
Basic earnings per common share	$	0.16			$	0.06		$	0.17		$	0.15		$	0.15
Diluted earnings per common share		0.16				0.06			0.17			0.15			0.15
Dividends declared per common share		0.06				0.06			0.06			0.06			0.06
Book value per share		11.14				11.12			11.73			11.60			11.55
Tangible book value per common share 1		7.30				7.26			7.39			7.25			7.19
Asset Quality Measurements
Non-performing loans (NPLs): non-accrual	$	27,730			$	35,444		$	41,048		$	47,269		$	40,777
Non-performing loans (NPLs): still accruing		5,823				4,370			3,450			4,693			5,136
Other real estate owned		7,053				6,403			7,292			5,828			5,625
Non-performing assets (NPAs)		40,606				46,217			51,790			57,790			51,538
Net charge-offs		3,118				2,805			2,512			3,308			1,622
Net charge-offs as % of average loans (annualized)		0.58	%			0.57	%		0.55	%		0.74	%		0.37	%
NPLs as % of total loans		1.53	%			1.88	%		2.40	%		2.89	%		2.59	%
NPAs as % of total assets		1.07	%			1.15	%		1.64	%		1.80	%		1.67	%
Allowance for loan losses as % of NPLs		83.8	%			71.0	%		62.0	%		53.5	%		61.5	%
Allowance for loan losses as % of total loans		1.28	%			1.33	%		1.49	%		1.54	%		1.59	%
Allowance for loan losses as % of total, excluding Gotham1		1.41	%			1.47	%		1.49	%		1.54	%		1.59	%
Special mention loans	$	29,755			$	42,422		$	37,555		$	37,379		$	18,424
Substandard / doubtful loans		83,109				88,674			88,395			89,135			99,383
1 See reconciliation of GAAP measure to non-GAAP measure on following page.
2 Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate of 35% for all periods presented.
3 Represents preliminary results for the quarter ended December 31, 2012.

Non GAAP Financial Measures	As of and for the Quarter Ended
(in thousands except share and per share data)	12/31/12			9/30/12			6/30/12			3/31/12			12/31/11
The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors.
The following table shows the reconciliation of stockholders' equity to tangible equity and the tangible equity ratio:
Total assets	$	3,789,514		$	4,022,982		$	3,150,040		$	3,210,871		$	3,084,166
Goodwill and other amortizable intangibles		(170,173	)		(170,411	)		(164,579	)		(164,862	)		(165,167	)
Tangible assets		3,619,341			3,852,571			2,985,461			3,046,009			2,918,999
Stockholders' equity		493,883			491,122			444,670			439,699			437,682
Goodwill and other amortizable intangibles		(170,173	)		(170,411	)		(164,579	)		(164,862	)		(165,167	)
Tangible stockholders' equity		323,710			320,711			280,091			274,837			272,515
Shares of common stock outstanding at period end		44,348,787			44,173,470			37,899,007			37,899,007			37,883,008
Tangible capital as a % of tangible assets		8.94	%		8.32	%		9.38	%		9.02	%		9.34	%
Tangible book value per share	$	7.30		$	7.26		$	7.39		$	7.25		$	7.19
The Company believes that tangible equity is useful as a tool to help assess a company's capital position.
The following table shows the reconciliation of return on average tangible equity:
Average stockholders' equity	$	492,506		$	475,652		$	441,956		$	439,384		$	431,129
Average goodwill and other amortizable intangibles		(172,723	)		(167,623	)		(164,751	)		(165,045	)		(165,360	)
Average tangible stockholders' equity		319,783			308,029			277,205			274,339			265,769
Net income		7,020			2,261			6,209			5,701			5,717
Net income, if annualized		27,851			8,995			24,972			22,929			22,682
Return on average tangible equity		8.71	%		2.92	%		9.01	%		8.36	%		8.53	%
The Company believes that the return on average tangible stockholders' equity is useful as a tool to help measure and assess a company's use of equity.
The following table shows the reconciliation of the operating efficiency ratio:
Net interest income	$	27,923		$	25,239		$	24,082		$	23,905		$	23,238
Non-interest income		7,659			9,026			7,979			7,971			7,176
Total net revenues		35,582			34,265			32,061			31,876			30,414
Tax equivalent adjustment on securities interest income		785			830			852			861			955
Net gain on sales of securities		(1,416	)		(3,152	)		(2,412	)		(2,899	)		(1,989	)
Other than temporary loss on securities		25			3			6			-			38
Other, (other gains and fair value loss on interest rate caps)		(4	)		(64	)		14			40			3
Core total revenues		34,972			31,882			30,521			29,878			29,421
Non-interest expense		22,546			28,784			21,162			21,290			20,721
Merger related expense		-			(4,928	)		(451	)		(299	)		(247	)
Foreclosed property expense		(285	)		(573	)		(428	)		(412	)		(205	)
Amortization of intangible assets		(261	)		(334	)		(283	)		(305	)		(323	)
Core non-interest expense		22,000			22,949			20,000			20,274			19,946
Core efficiency ratio		62.9	%		72.0	%		65.5	%		67.9	%		67.8	%
The core efficiency ratio reflects total revenues inclusive of the tax equivalent adjustment on municipal securities and excludes securities gains, other than temporary impairments and the other adjustments shown above. Core non-interest expense is adjusted to exclude the effect of foreclosed property expense and amortization of intangible assets. The Company believes this non-GAAP information provides useful information to users to assess the Company's core operations.
The following table shows the reconciliation of the allowance for loan losses to total loans and to total loans excluding Gotham loans:
Total loans	$	2,193,129		$	2,119,472		$	1,851,027		$	1,799,112		$	1,775,893
Gotham loans		194,518			201,794			-			-			-
Total loans, excluding Gotham loans		1,998,611			1,917,678			1,851,027			1,799,112			1,775,893
Allowance for loan losses		28,114			28,282			27,587			27,787			28,245
Allowance for loan losses to total loans		1.28	%		1.33	%		1.49	%		1.54	%		1.59	%
Allowance for loan losses to total loans, excluding Gotham loans		1.41	%		1.47	%		NA			NA			NA
As required by GAAP, the Company recorded at fair value the loans acquired in the Gotham transaction. These loans contain no allowance for loan losses in losses for the periods reflected above.