MONTEBELLO, NY--(Marketwired - Oct 29, 2013) - Provident New York Bancorp (
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 growth 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 borrowings 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 Quarter Ended | For the Twelve Months 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 | 12/31/2012 | 9/30/2012 | |||||||||||||||||
| Basic earnings per share | $ | 0.12 | $ | 0.15 | $ | 0.15 | $ | 0.16 | $ | 0.06 | ||||||||||||
| Diluted earnings per share | 0.12 | 0.15 | 0.15 | 0.16 | 0.06 | |||||||||||||||||
| Dividends declared per share | 0.12 | 0.06 | 0.06 | 0.06 | 0.06 | |||||||||||||||||
| Tangible book value per share | 7.08 | 7.01 | 7.33 | 7.30 | 7.26 | |||||||||||||||||
| Shares of common stock outstanding | 44,351,046 | 44,353,276 | 44,353,276 | 44,348,787 | 44,173,470 | |||||||||||||||||
| Basic weighted average common shares outstanding | 43,742,903 | 43,801,867 | 43,743,640 | 43,637,315 | 41,054,458 | |||||||||||||||||
| Diluted weighted average common shares outstanding | 43,859,834 | 43,906,158 | 43,848,486 | 43,721,091 | 41,099,237 | |||||||||||||||||
| Performance Ratios (annualized) | ||||||||||||||||||||||
| Return on average assets | 0.54 | % | 0.68 | % | 0.70 | % | 0.73 | % | 0.26 | % | ||||||||||||
| Return on average equity | 4.42 | % | 5.18 | % | 5.37 | % | 5.65 | % | 1.89 | % | ||||||||||||
| Return on average tangible equity 1 | 6.83 | % | 7.88 | % | 8.21 | % | 8.71 | % | 2.92 | % | ||||||||||||
| Core operating efficiency 1 | 63.6 | % | 59.1 | % | 64.6 | % | 62.9 | % | 72.0 | % | ||||||||||||
| Analysis of Net Interest Income | ||||||||||||||||||||||
| Yield on loans | 4.70 | % | 4.80 | % | 4.93 | % | 5.04 | % | 4.97 | % | ||||||||||||
| Yield on investment securities - tax equivalent2 | 2.35 | % | 2.38 | % | 2.32 | % | 2.29 | % | 2.44 | % | ||||||||||||
| Yield on earning assets - tax equivalent2 | 3.89 | % | 3.97 | % | 3.96 | % | 3.98 | % | 4.01 | % | ||||||||||||
| Cost of deposits | 0.15 | % | 0.17 | % | 0.22 | % | 0.28 | % | 0.27 | % | ||||||||||||
| Cost of borrowings | 2.88 | % | 2.84 | % | 3.49 | % | 3.58 | % | 3.65 | % | ||||||||||||
| Cost of interest bearing liabilities | 0.84 | % | 0.66 | % | 0.70 | % | 0.79 | % | 0.83 | % | ||||||||||||
| Net interest rate spread - tax equivalent basis2 | 3.05 | % | 3.31 | % | 3.26 | % | 3.19 | % | 3.18 | % | ||||||||||||
| Net interest margin - tax equivalent basis2 | 3.23 | % | 3.46 | % | 3.41 | % | 3.37 | % | 3.38 | % | ||||||||||||
| Capital | ||||||||||||||||||||||
| Tier 1 leverage ratio - Bank only | 9.33 | % | 8.49 | % | 8.62 | % | 8.23 | % | 7.49 | % | ||||||||||||
| Tier 1 risk-based capital - Bank only | $ | 363,274 | 3 | $ | 311,507 | 3 | $ | 304,696 | $ | 297,089 | $ | 289,441 | ||||||||||
| Total risk-based capital - Bank only | 392,376 | 3 | 340,077 | 3 | 332,447 | 325,410 | 317,929 | |||||||||||||||
| Tangible equity as a % of tangible assets - consolidated 1 | 8.09 | % | 8.50 | % | 9.18 | % | 8.94 | % | 8.32 | % | ||||||||||||
| Asset Quality | ||||||||||||||||||||||
| Non-performing loans (NPLs) non-accrual | $ | 22,807 | $ | 27,244 | $ | 27,019 | $ | 27,730 | $ | 35,444 | ||||||||||||
| Non-performing loans (NPLs) still accruing | 4,099 | 4,216 | 4,257 | 5,823 | 4,370 | |||||||||||||||||
| Other real estate owned | 6,022 | 4,376 | 5,486 | 7,053 | 6,403 | |||||||||||||||||
| Non-performing assets (NPAs) | 32,928 | 35,836 | 36,762 | 40,606 | 46,217 | |||||||||||||||||
| Net charge-offs | 2,197 | 3,070 | 3,170 | 3,118 | 2,805 | |||||||||||||||||
| Net charge-offs as a % of average loans (annualized) | 0.37 | % | 0.54 | % | 0.58 | % | 0.58 | % | 0.57 | % | ||||||||||||
| NPLs as a % of total loans | 1.12 | % | 1.35 | % | 1.42 | % | 1.53 | % | 1.88 | % | ||||||||||||
| NPAs as a % of total assets | 0.81 | % | 0.94 | % | 0.99 | % | 1.07 | % | 1.15 | % | ||||||||||||
| Allowance for loan losses as a % of NPLs | 107.3 | % | 90.2 | % | 88.1 | % | 83.8 | % | 71.0 | % | ||||||||||||
| Allowance for loan losses as a % of total loans | 1.20 | % | 1.21 | % | 1.25 | % | 1.28 | % | 1.33 | % | ||||||||||||
| Allowance for loan losses as a % of total loans, excluding Gotham loans1 | 1.27 | % | 1.30 | % | 1.36 | % | 1.41 | % | 1.47 | % | ||||||||||||
| Special mention loans | $ | 13,530 | $ | 24,327 | $ | 41,778 | $ | 29,755 | $ | 42,422 | ||||||||||||
| Substandard / doubtful loans | 61,230 | 62,165 | 70,688 | 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 | 21,494 | 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 | ||||||||||||||
Contact Information:
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