MONTEBELLO, NY -- (Marketwire) -- 10/29/12 -- Provident New York Bancorp (NYSE: PBNY), the parent company of Provident Bank, today announced fiscal fourth quarter results for the period ending September 30, 2012, as well as for the fiscal year ending September 30, 2012. Net income for the quarter was $6.9 million, or $0.17 per diluted share excluding merger related charges related to the acquisition of Gotham Bank of New York ("Gotham"), compared to a net loss of $493,000, or $(0.01) per diluted share for same quarter last year; and $6.2 million, or $0.17 per diluted share for the linked quarter ended June 30, 2012. For the fiscal year ending September 30, 2012, net income for the year was $24.4 million, or $0.64 per diluted share excluding merger related charges, as compared to net income of $11.7 million or $0.31(3) per diluted share for the year ending September 30, 2011.
President's Comments
Jack Kopnisky, President and CEO, commented: "The fiscal fourth quarter of 2012 continued to produce strong earnings for our Bank, yielding $0.17 per diluted share, excluding merger related charges for Gotham. This is a continuation of the solid earnings that we put forth for the third fiscal quarter ending June 30, 2012.
"We had earnings of $0.64 (excluding merger related charges) per diluted share for the fiscal year 2012 as compared to $0.31 per diluted share in the fiscal year 2011. This represents a 106 percent increase in earnings per share year over year. We have been able to grow earnings for our Bank based on strong commercial loan and deposit growth, expense controls, and improvement in credit quality. We implemented a team based approach in commercial banking that facilitated the significant growth in loans and deposits for the year. We reduced approximately $10 million in noninterest core expenses by reducing back office and retail costs and redeployed approximately $5 million to customer facing opportunities. The completion of the Gotham acquisition accelerated our entry into the New York City market, which is strategically beneficial for our Bank. We also raised $46.0 million in capital, which resulted in a Tier 1 Leverage Ratio of 8.9(4) percent based on average assets for the fourth quarter. We were able to significantly reduce our non-performing loans during the fourth quarter to $39.8 million, representing a 10 percent decrease in non-performing loans quarter over quarter. Net charge offs as a percentage of average loans stood at 57 basis points compared to 55 basis points last quarter, and 241 basis points for the fourth quarter last year.
"In terms of the balance sheet, we saw net loan growth of $415.3 million for 2012, a 24.8 percent increase over last year. We funded this loan growth with deposit base expansion, excluding more volatile municipal deposits of $527.5 million, or a 31.4 percent increase year over year."
Key items for the quarter
- Total loan originations were $205.7 million compared to $206.2 million in the linked quarter, and $180.6 million for the fourth fiscal quarter of 2011.
- Non-performing loans were reduced from $44.5 million at June 30, 2012, to $39.8 million at September 30, 2012.
- Our allowance for loan losses increased $695,000 significantly improving the ratio to non-performing loans increased to approximately 71 percent from 62 percent. Provision for loan losses increased by $1.2 million during the fourth quarter. For the fourth quarter of fiscal 2011, provision for loan losses was $8.8 million.
- Securities gains were $3.0 million after tax based on the period's effective tax rate, for the fourth quarter.
Gotham Bank Acquisition
On August 10, 2012 the Company accelerated its growth into the New York City market area with the completion of the Gotham Bank acquisition with $434.0 million of assets, $209.4 million of loans, and $368.5 million in deposits. Intangible assets increased $9.8 million due to good will and core deposit intangibles associated with the transaction. The fair value analysis of the assets resulted in a discount of 1.9 percent to the loan portfolio and a core deposit premium of 2.8 percent. Merger related costs related to this acquisition were $5.9 million or $4.5 million net of taxes.
Net Interest Income and Margin
Fourth quarter fiscal 2012 compared with fourth quarter fiscal 2011
Net interest income was $25.2 million for the fourth quarter of fiscal 2012, up $2.4 million for the same quarter of fiscal 2011. Reflecting the current interest rate environment, the tax-equivalent yield on investments decreased 37 basis points and loan yields were down 25 basis points compared to the fourth quarter fiscal 2011. As a result, the yield on interest-earning assets declined 32 basis points. The cost of deposits increased 1basis point to 27 basis points, and the cost of borrowings decreased by 4 basis points to 3.65 percent.The resulting net interest margin on a tax-equivalent basis was 3.38 percent for the fourth quarter of fiscal 2012, compared to 3.58 percent for the same period a year ago.
Fourth quarter fiscal 2012 compared with linked quarter ended June 30, 2012
Net interest income for the quarter ending September 30, 2012 increased $1.2 million to $25.2 million, compared to $24.1 million at the linked quarter ending June 30, 2012. The tax-equivalent net interest margin decreased to 3.38 percent from 3.59 percent in the linked quarter. Loan yields were 4.97 percent. Deposit costs increased by 5basis points mainly due to the inflow of Gotham deposits, while the cost of borrowings decreased 12 basis points.
Noninterest Income
Fourth quarter fiscal 2012 compared with fourth quarter fiscal 2011
Noninterest income remained stable for the fourth quarter fiscal 2012 compared with fourth quarter fiscal 2011. Increases in deposit fees, service charges and gain on sale of loans partly offset the decrease in the net gain on sale of securities.
Fourth quarter fiscal 2012 compared with linked quarter ended June 30, 2012
Noninterest income increased $1.0 million to $9.0 million for the fourth fiscal quarter of 2012 compared to the linked quarter ended June 30, 2012, primarily due to security gains.
Noninterest Expense
Fourth quarter fiscal 2012 compared with fourth quarter fiscal 2011
Noninterest expense increased $4.4 million, when compared to the fourth quarter fiscal 2011, mostly due to merger related charges of $4.5 million net of tax incurred during the fourth quarter of fiscal 2012. The fourth quarter of fiscal 2011 includes $3.2 million of restructuring charges.
Fourth quarter fiscal 2012 compared with the linked quarter ended June 30, 2012
Noninterest expense increased $7.6 million, or 36.0 percent over the linked quarter. Increases of $4.5 million were seen in merger related costs related to the Gotham acquisition, totaling approximately $4.9 million. Compensation and benefits increased $2.0 million in part due to the Gotham acquisition, and incentive bonus accruals.
Income Taxes
The Company recorded income tax expense for the year 2012 at an effective tax rate of 23.6 percent compared to 19.3 percent for the same period in fiscal 2011. The difference is primarily due to an increased write-off of credits in 2011, as well as larger tax-exempt municipal security interest relative to pre-tax income for fiscal 2011.
Credit Quality
Nonperforming loans decreased to $39.8 million at September 30, 2012 compared to $44.5 million at June 30, 2012. We disposed of one ADC ("Acquisition, Development and Construction") loan of approximately $3.0 million and completed foreclosure on $1.5 million from the ADC portfolio. During the quarter, we also disposed of $2.0 million in foreclosed properties, reducing that balance from $7.3 million at June 30, 2012 to $6.4 million at September 30, 2012. Net charge-offs for the quarter were $2.8 million compared to $3.5 million in provision. For the year, net charge-offs were $10.2 million and the provision was $10.6 million. The allowance for loan losses at September 30, 2012 was $28.3 million, 71 percent of nonperforming loans and 1.47 percent of the Provident loan portfolio, excluding loans acquired from Gotham which are carried at fair value and are not assigned any reserves.
Key Balance Sheet Changes
- Assets increased $872.7 million or 27.7 percent compared to June 30, 2012 as a result of increases in investment securities of $267.8 million, net loans of $267.8 million, and cash balances of $326.5 million.
- Deposits increased $779.1 million compared to June 30, 2012, with growth experienced in all deposit categories. Municipal deposits increased $422.0 million compared to June 30, 2012, as a result of seasonal tax deposits.
- Securities increased $267.8 million over June 30, 2012 levels, primarily due to purchases of $462.8 million in securities during the fourth fiscal quarter partially offset by sales of $100.0million, with associated gains of $3.2 million, and $95.0 million in calls, maturities and principal pay downs.
- Foreclosed properties decreased by 12.2 percent from June 30, 2012 to $6.4 million at September 30, 2012, as we continue to actively manage our portfolios and the market moves towards a greater stability.
Capital and Liquidity
Provident Bank remained well capitalized at September 30, 2012 with a Tier 1 Leverage ratio of approximately 8.9 percent based on average assets. Tier 1 Leverage ratio based on period end assets was approximately 7.6 percent, which is still considered well capitalized. Tangible book value per share decreased to $7.30 at September 30, 2012 from $7.35 at June 30, 2012, due to the acquisition of Gotham. Total capital increased $49.0 million from June 30, 2012, to $492.2 million at September 30, 2012, due primarily to the capital raise announced previously.
Subsequent Events
During October the Company agreed to sell Hudson Valley Investment Advisors, LLC ("HVIA"), an investment advisory firm. The assets related to HVIA are shown on the balance sheet as assets held for sale at a fair value of $4.6 million which reflects deductions in goodwill of $3.3 million.
About Provident New York Bancorp
Headquartered in Montebello, N.Y., Provident Bank, with $4.0 billion in assets, specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City marketplace through teams of dedicated and experienced relationship managers. Our franchise includes 35 Financial Centers. 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.
(1) Earnings excluding merger charges are calculated using the effective tax rate. See table on pages 10 and 11 for reconciliation of GAAP earnings to earnings excluding merger related charges.
(2) GAAP earnings include merger related charges for Gotham, and include securities' gains.
(3) Includes $5 million pre-tax related to restructuring charges and defined benefit settlement charges.
(4) Tier 1 leverage based on period end assets equated to 7.6%, still well capitalized.
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 completion of the annual audit of the Company's financial statements and the filing of its fiscal 2012 Annual Report on Form 10-K with the Securities and Exchange Commission. While the Company is not aware of any need to revise the results disclosed in this release, the Company's auditors currently are reviewing the Company's testing of the carrying amount of goodwill on its financial statements in view of the relationship between the Company's book value per share and the market price of its common stock at the end of the fiscal year. Moreover, accounting literature may require adverse information received by management between the date of this release and the filing of the 10-K to be reflected in the results of fiscal 2012, even though the new information was received by management in fiscal 2013 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)
September 30, September 30, June 30,
2012 2011 2012
------------- ------------- -------------
Assets:
Cash and due from banks $ 437,982 $ 281,512 $ 111,400
Total securities 1,153,248 849,884 885,433
Loans held for sale 7,505 4,176 5,369
HVIA assets held for sale 4,550 -- --
Loans:
One- to four-family
residential mortgage loans 350,022 389,765 357,943
Commercial real estate,
commercial business 1,415,811 913,279 1,114,764
Acquisition, development and
construction loans 144,061 175,931 165,125
Consumer loans 209,578 224,824 213,195
------------- ------------- -------------
Total loans, gross 2,119,472 1,703,799 1,851,027
Allowance for loan losses (28,282) (27,917) (27,587)
------------- ------------- -------------
Total loans, net 2,091,190 1,675,882 1,823,440
Federal Home Loan Bank stock,
at cost 19,249 17,584 18,207
Premises and equipment, net 38,483 40,886 38,877
Goodwill 162,631 160,861 160,861
Other amortizable intangibles 7,164 4,629 3,718
Bank owned life insurance 59,017 56,967 58,506
Foreclosed properties 6,403 5,391 7,292
Other assets 35,359 39,630 36,937
------------- ------------- -------------
Total assets $ 4,022,781 $ 3,137,402 $ 3,150,040
============= ============= =============
Liabilities:
Deposits
Retail $ 167,050 $ 194,299 $ 167,527
Commercial 412,630 296,505 320,849
Municipal 367,624 160,422 15,936
Personal NOW deposits 213,755 164,637 203,290
Business NOW deposits 38,486 37,092 39,170
Municipal NOW deposits 195,882 200,773 180,433
------------- ------------- -------------
Total transaction
accounts 1,395,427 1,053,728 927,205
Savings 506,538 429,825 476,349
Money market deposits 821,704 509,483 673,498
Certificates of deposit 387,482 303,659 255,039
------------- ------------- -------------
Total deposits 3,111,151 2,296,695 2,332,091
Borrowings 345,176 323,522 314,154
Borrowings Senior Note - 51,499 -
Mortgage escrow funds and
other liabilities 74,286 34,552 60,667
------------- ------------- -------------
Total liabilities 3,530,613 2,706,268 2,706,912
Stockholders' equity 492,168 431,134 443,128
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 4,022,781 $ 3,137,402 $ 3,150,040
============= ============= =============
Shares of common stock
outstanding at period end 44,173,470 37,864,008 37,899,007
Book value per share $ 11.14 $ 11.39 $ 11.69
Tangible book value per share $ 7.30 $ 7.02 $ 7.35
Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited, in thousands, except share and per share data)
Three
Months
Quarter Ended Ended Twelve Months Ended
September 30, June 30, September 30,
2012 2011 2012 2012 2011
----------- ----------- ----------- ----------- -----------
Interest and
dividend
income:
Loans and
loan fees $ 24,396 $ 21,995 $ 22,312 $ 91,010 $ 89,500
Securities
taxable 3,909 3,825 4,224 16,538 14,493
Securities
non-taxable 1,543 1,786 1,581 6,497 7,441
Other earning
assets 265 211 228 992 1,180
----------- ----------- ----------- ----------- -----------
Total interest
income 30,113 27,817 28,345 115,037 112,614
Interest
expense:
Deposits 1,789 1,384 1,262 5,581 6,104
Borrowings 3,085 3,642 3,001 12,992 15,220
----------- ----------- ----------- ----------- -----------
Total interest
expense 4,874 5,026 4,263 18,573 21,324
----------- ----------- ----------- ----------- -----------
Net interest
income 25,239 22,791 24,082 96,464 91,290
Provision for
loan losses 3,500 8,784 2,312 10,612 16,584
----------- ----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 21,739 14,007 21,770 85,852 74,706
Non-interest
income:
Deposit fees
and service
charges $ 3,065 $ 2,727 $ 2,816 $ 11,377 $ 10,811
Net gain on
sales of
securities 3,152 4,519 2,412 10,452 10,011
Other than
temporary
loss on
securities (3) (251) (6) (47) (278)
Title
insurance
fees 332 275 249 1,106 1,224
Bank owned
life
insurance 512 514 518 2,050 2,049
Gain on sale
of loans 429 166 578 1,897 1,027
Gain on sale
of premises
and
equipment 70 - - 75 -
Loss on sale
of HVIA (135) - - (135) -
Investment
management
fees 776 733 802 3,143 3,080
Fair value
loss on
interest
rate caps (6) (170) (14) (63) (197)
Other 834 543 624 2,297 2,224
----------- ----------- ----------- ----------- -----------
Total non-
interest
income 9,026 9,056 7,979 32,152 29,951
Non-interest
expense:
Compensation
and benefits 12,873 10,129 10,845 46,038 43,662
Stock-based
compensation
plans 302 303 326 1,187 1,162
Merger
related
expenses 4,928 - 451 5,925 255
Defined
benefit
settlement
charge/CEO
transition - - - - 1,772
Restructuring
charge(sever
ance/branch
relocation) - 3,201 - - 3,201
Occupancy and
office
operations 3,959 3,693 3,388 14,457 14,508
Advertising
and
promotion 369 677 440 1,849 3,328
Professional
fees 1,136 1,147 1,128 4,247 4,389
Data and
check
processing 715 718 705 2,802 2,763
Amortization
of
intangible
assets 334 338 283 1,245 1,426
FDIC
insurance
and
regulatory
assessments 843 636 782 3,096 2,910
ATM/debit
card expense 438 425 437 1,711 1,584
Foreclosed
property
expense 573 677 428 1,618 1,171
Other 2,314 2,438 1,949 7,782 7,980
----------- ----------- ----------- ----------- -----------
Total non-
interest
expense 28,784 24,382 21,162 91,957 90,111
----------- ----------- ----------- ----------- -----------
Income before
income tax
expense 1,981 (1,319) 8,587 26,047 14,546
Income tax
expense
(benefit) (280) (826) 2,378 6,159 2,807
----------- ----------- ----------- ----------- -----------
Net income
(loss) $ 2,261 $ (493) $ 6,209 $ 19,888 $ 11,739
=========== =========== =========== =========== ===========
Basic
earnings
(loss) per
common share $ 0.06 $ (0.01) $ 0.17 $ 0.52 $ 0.31
Diluted
earnings
(loss) per
common share 0.06 (0.01) 0.17 0.52 0.31
Dividends
declared 0.06 0.06 0.06 0.24 0.24
Weighted
average
common
shares:
Basic 41,054,458 37,332,121 37,302,693 38,227,653 37,452,596
Diluted 41,099,237 37,332,245 37,330,467 38,248,046 37,453,542
Selected Financial
Condition Data: Three Months Ended
------------------------------------------------------
(in thousands except
share and per share
data) 09/30/12 06/30/12 03/31/12 12/31/11 09/30/11
---------- ---------- ---------- ---------- ----------
End of Period
Total assets $4,022,781 $3,150,040 $3,210,871 $3,084,166 $3,137,402
Loans, gross (1) 2,119,472 1,851,027 1,799,112 1,775,893 1,703,799
Securities available
for sale 1,010,872 714,200 852,717 785,462 739,844
Securities held to
maturity 142,376 171,233 174,824 182,076 110,040
Bank owned life
insurance 59,017 58,506 57,987 57,485 56,967
Goodwill 162,631 160,861 160,861 160,861 160,861
Other amortizable
intangibles 7,164 3,718 4,001 4,306 4,629
Other non-earning
assets 80,245 83,106 80,020 78,710 85,907
Deposits 3,111,151 2,332,091 2,368,988 2,135,555 2,296,695
Borrowings 345,176 314,154 313,849 468,543 375,021
Equity 492,168 443,128 439,699 437,682 431,134
Other comprehensive
income related to
investment
securities
reflected in
stockholders'
equity 15,066 14,141 13,780 15,823 13,604
Average Balances
Total assets $3,451,055 $3,133,958 $3,131,854 $3,062,520 $2,978,273
Loans, gross:
Real estate-
residential
mortgage 352,724 360,487 374,498 385,269 398,420
Real estate-
commercial
mortgage 989,349 868,963 838,935 752,325 681,165
Real estate-
Acquisition,
Development &
Construction 156,726 165,442 163,116 172,155 186,398
Commercial and
industrial 263,922 205,051 197,507 203,929 208,181
Consumer loans 210,650 215,555 220,537 224,422 226,687
Loans total (1) 1,973,371 1,815,498 1,794,593 1,738,100 1,700,851
Securities (taxable) 841,373 778,782 799,753 696,293 717,893
Securities (non-
taxable) 181,540 182,003 185,062 205,366 208,692
Total earning assets 3,070,315 2,797,093 2,792,042 2,715,027 2,634,941
Non earning assets 380,740 336,865 339,812 347,493 343,332
Non-interest bearing
checking 592,962 483,589 503,539 500,621 486,504
Interest bearing NOW
accounts 398,493 412,072 389,846 398,885 309,729
Total transaction
accounts 991,455 895,661 893,385 899,506 796,233
Savings (including
mortgage escrow
funds) 539,904 493,234 463,971 445,236 461,566
Money market
deposits 756,655 697,342 654,013 577,387 504,476
Certificates of
deposit 303,788 265,375 284,737 302,713 371,907
Total deposits and
mortgage escrow 2,591,802 2,351,612 2,296,106 2,224,842 2,134,182
Total interest
bearing deposits
(including escrow) 1,998,840 1,868,023 1,792,567 1,724,221 1,647,678
Borrowings 336,217 320,237 375,766 392,785 391,391
Equity 475,652 441,956 439,384 431,129 433,841
Selected Operating
Data:
Condensed Tax
Equivalent Income
(Loss) Statement
Interest and
dividend income $ 30,113 $ 28,345 $ 28,411 $ 28,168 $ 27,817
Tax equivalent
adjustment* 830 852 861 955 962
Interest expense 4,874 4,263 4,506 4,930 5,026
---------- ---------- ---------- ---------- ----------
Net interest
income (tax
equivalent) 26,069 24,934 24,766 24,193 23,753
Provision for loan
losses 3,500 2,312 2,850 1,950 8,784
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision for
loan losses 22,569 22,622 21,916 22,243 14,969
Non-interest income 9,026 7,979 7,971 7,176 9,056
Non-interest expense 28,784 21,162 21,290 20,721 24,382
---------- ---------- ---------- ---------- ----------
Income (loss) before
income tax expense 2,811 9,439 8,597 8,698 (357)
Income tax expense
(tax equivalent)* 550 3,230 2,896 2,981 136
---------- ---------- ---------- ---------- ----------
Net income
(loss) $ 2,261 $ 6,209 $ 5,701 $ 5,717 $ (493)
========== ========== ========== ========== ==========
(1) Does not reflect allowance for loan losses of $28,282, $27,587,
$27,787, $28,245, and $27,917.
* Tax exempt income assumed at a statutory 35% federal rate
Three Months Ended
-----------------------------------------------------------
09/30/12 06/30/12 03/31/12 12/31/11 09/30/11
----------- ----------- ----------- ----------- -----------
Performance
Ratios
(annualized)
Return on
Average Assets 0.26% 0.80% 0.73% 0.74% -0.07%
Return on
Average Equity 1.89% 5.65% 5.22% 5.26% -0.45%
Non-Interest
Income to
Average Assets 1.04% 1.02% 1.02% 0.93% 1.21%
Non-Interest
Expense to
Average Assets 3.32% 2.72% 2.73% 2.68% 3.25%
Operating
Efficiency
Adjusted (2) 71.98% 65.53% 67.86% 67.80% 70.24%
Analysis of Net
Interest Income
Yield on Loans 4.97% 5.01% 5.03% 5.13% 5.22%
Yield on
Investment
Securities- Tax
Equivalent 2.44% 2.79% 2.81% 2.96% 2.81%
Yield on Earning
Assets- Tax
Equivalent 4.01% 4.20% 4.22% 4.26% 4.33%
Cost of Deposits 0.27% 0.22% 0.21% 0.23% 0.26%
Cost of
Borrowings 3.65% 3.77% 3.52% 3.65% 3.69%
Cost of Interest
Bearing
Liabilities 0.83% 0.78% 0.84% 0.92% 0.98%
Net Interest
Rate Spread-
Tax Equivalent
Basis 3.18% 3.42% 3.38% 3.34% 3.35%
Net Interest
Margin- Tax
Equivalent
Basis 3.38% 3.59% 3.57% 3.54% 3.58%
Capital
Information
Data
Tier 1 Leverage
Ratio- Bank
Only
(Preliminary) 7.57% 8.67% 8.30% 8.51% 8.14%
Tier 1 Risk-
Based Capital-
Bank Only
(Preliminary) 290,056 257,621 252,586 247,433 241,196
Total Risk-Based
Capital- Bank
Only
(Preliminary) 315,338 283,033 277,512 273,911 265,307
Tangible Capital
Consolidated
(3) 322,373 278,549 274,837 272,515 265,644
Tangible Capital
as a % of
Tangible Assets
Consolidated
(3) 8.37% 9.33% 9.02% 9.34% 8.94%
Shares
Outstanding 44,173,470 37,899,007 37,899,007 37,883,008 37,864,008
Shares
Repurchased
during
qrtr(open
market) - - - - 183,000
Basic weighted
common shares
outstanding 41,054,458 37,302,693 37,280,651 37,252,464 37,332,121
Diluted common
shares
outstanding 41,099,237 37,330,467 37,316,778 37,252,464 37,332,245
Basic earnings
(loss) per
common share $ 0.06 $ 0.17 $ 0.15 $ 0.15 $ (0.01)
Diluted earnings
(loss) per
common share 0.06 0.17 0.15 0.15 (0.01)
Dividends Paid
per common
share 0.06 0.06 0.06 0.06 0.06
Book Value per
common share 11.14 11.69 11.60 11.55 11.39
Tangible Book
Value per
common share
(3) 7.30 7.35 7.25 7.19 7.02
Asset Quality
Measurements
Non-performing
loans (NPLs):
non-accrual $ 35,444 $ 41,048 $ 47,269 $ 40,777 $ 36,477
Non-performing
loans (NPLs):
still accruing 4,370 3,450 4,693 5,136 4,090
Other Real
Estate Owned 6,403 7,292 5,828 5,625 5,391
Non-performing
assets (NPAs) 46,217 51,790 57,790 51,538 45,958
Net Charge-offs 2,805 2,512 3,308 1,622 10,252
Net Charge-offs
as % of average
loans
(annualized) 0.57% 0.55% 0.74% 0.37% 2.41%
NPLs as % of
total loans 1.88% 2.40% 2.89% 2.59% 2.38%
NPAs as % of
total assets 1.15% 1.64% 1.80% 1.67% 1.46%
Allowance for
loan losses as
% of NPLs 71% 62% 53% 62% 69%
Allowance for
loan losses as
% of Provident
only loans 1.47% 1.49% 1.54% 1.59% 1.64%
Special mention
loans 42,422 37,555 37,379 18,424 23,026
Substandard /
doubtful loans 88,662 88,395 89,135 99,383 93,989
----------- ----------- ----------- ----------- -----------
(2) The operating efficiency ratio represents non-interest expense divided
by the sum of net interest income and non-interest income. As in the case
of net interest income,generally, net interest income as utilized in
calculating the operating efficiency ratio is typically expressed on a
tax-equivalent basis. Moreover, most institutions, in calculating thethe
operating efficiency ratio, also adjust both noninterest expense and
noninterest income to exclude from these items (as calculated under
generally accepted accountingprinciples) certain component elements, such
as non-recurring charges, other real estate expense and amortization of
intangibles (deducted from non interest expense)and security transactions
and other non-recurring items (excluded from non interest income). We
follow these practices.
(3) Provident Bank provides supplemental reporting of Non-GAAP tangible
equity ratios as management believes this information is useful to
investors.
The following table shows the reconciliation of tangible equity and the
tangible equity ratio:
09/30/12 06/30/12 03/31/12 12/31/11 09/30/11
----------- ----------- ----------- ----------- -----------
Total Assets $ 4,022,781 $ 3,150,040 $ 3,210,871 $ 3,084,166 $ 3,137,402
Goodwill and
other
amortizable
intangibles (169,795) (164,579) (164,862) (165,167) (165,490)
----------- ----------- ----------- ----------- -----------
Tangible Assets $ 3,852,986 $ 2,985,461 $ 3,046,009 $ 2,918,999 $ 2,971,912
----------- ----------- ----------- ----------- -----------
Stockholders'
equity 492,168 443,128 439,699 437,682 431,134
Goodwill and
other
amortizable
intangibles (169,795) (164,579) (164,862) (165,167) (165,490)
----------- ----------- ----------- ----------- -----------
Tangible
Stockholders'
equity $ 322,373 $ 278,549 $ 274,837 $ 272,515 $ 265,644
----------- ----------- ----------- ----------- -----------
Outstanding
Shares 44,173,470 37,899,007 37,899,007 37,883,008 37,864,008
Tangible
capital as a %
of tangible
assets
(consolidated) 8.37% 9.33% 9.02% 9.34% 8.94%
Tangible book
value per
share $ 7.30 $ 7.35 $ 7.25 $ 7.19 $ 7.02
Selected Financial Condition Data to reconcile GAAP Earnings to Earnings
excluding merger related expenses 2012:
Including Including
Excluding Merger Excluding Merger
Merger Expense Merger Expense
Expense As Reported Expense As Reported
YTD YTD QTD QTD
----------- ----------- ----------- -----------
(in thousands except share
and per share data) 09/30/12 09/30/12 09/30/12 09/30/12
----------- ----------- ----------- -----------
Average Balances
Total assets $ 3,195,299 $ 3,195,299 $ 3,451,055 $ 3,451,055
Loans, gross:
Real estate- residential
mortgage 368,264 368,264 352,724 352,724
Real estate- commercial
mortgage 862,439 862,439 989,349 989,349
Real estate- Acquisition,
Development &
Construction 164,360 164,360 156,726 156,726
Commercial and industrial 217,198 217,198 263,922 263,922
Consumer loans 217,789 217,789 210,650 210,650
Loans total (1) 1,830,050 1,830,050 1,973,371 1,973,371
Securities (taxable) 778,994 778,994 841,373 841,373
Securities (non-taxable) 188,520 188,520 181,540 181,540
Total earning assets 2,843,902 2,843,902 3,070,315 3,070,315
Non earning assets 351,397 351,397 380,740 380,740
Non-interest bearing
checking 520,265 520,265 592,962 592,962
Interest bearing NOW
accounts 399,819 399,819 398,493 398,493
Total transaction accounts 920,084 920,084 991,455 991,455
Savings (including mortgage
escrow funds) 485,624 485,624 539,904 539,904
Money market deposits 671,325 671,325 756,655 756,655
Certificates of deposit 289,230 289,230 303,788 303,788
Total deposits and mortgage
escrow 2,366,263 2,366,263 2,591,802 2,591,802
Total interest bearing
deposits (including escrow) 1,845,998 1,845,998 1,998,840 1,998,840
Borrowings 356,296 356,296 336,217 336,217
Equity 446,112 447,065 472,100 475,652
Selected Operating Data:
Condensed Tax Equivalent
Income (Loss) Statement
Interest and dividend income $ 115,037 $ 115,037 $ 30,113 $ 30,113
Tax equivalent adjustment* 3,498 3,498 830 830
Interest expense 18,573 18,573 4,874 4,874
----------- ----------- ----------- -----------
Net interest income (tax
equivalent) 99,962 99,962 26,069 26,069
Provision for loan losses 10,612 10,612 3,500 3,500
----------- ----------- ----------- -----------
Net interest income after
provision for loan
losses 89,350 89,350 22,569 22,569
Non-interest income 32,152 32,152 9,026 9,026
Non-interest expense 86,032 91,957 23,856 28,784
----------- ----------- ----------- -----------
Income (loss) before income
tax expense 35,470 29,545 7,739 2,811
Income tax expense (tax
equivalent)* 11,079 9,657 848 550
----------- ----------- ----------- -----------
Net income (loss) $ 24,391 $ 19,888 $ 6,891 $ 2,261
=========== =========== =========== ===========
(1) Does not reflect allowance for loan losses of $28,282.
* Tax exempt income assumed at a statutory 35% federal rate
Selected Financial Condition Data to reconcile GAAP Earnings to Earnings
excluding merger related expenses for 2012:
Year to Year to Quarter to Quarter to
Date Date Date Date
Excluding Including Excluding Including
Merger Merger Merger Merger
Expense Expense Expense Expense
----------- ----------- ----------- -----------
(in thousands except
share and per share
data) 09/30/12 09/30/12 09/30/12 09/30/12
----------- ----------- ----------- -----------
Performance Ratios(1)
Return on Average Assets 0.76% 0.62% 0.79% 0.26%
Return on Average Equity 5.47% 4.45% 5.76% 1.89%
Non-Interest Income to
Average Assets 1.01% 1.01% 1.04% 1.04%
Non-Interest Expense to
Average Assets 2.69% 2.88% 2.75% 3.32%
Earnings Per Share
Information
Merger expense net of
tax 4,503 4,503 4,630 4,630
Tax rate 24.00% 24.00% 6.00% 6.00%
Non interest expense 86,032 91,957 23,856 28,784
Net Income 24,391 19,888 6,891 2,261
Basic weighted common
shares outstanding 38,227,653 38,227,653 41,054,458 41,054,458
Diluted common shares
outstanding 38,248,046 38,248,046 41,099,237 41,099,237
Basic (loss) earnings
per common share $ 0.64 $ 0.52 $ 0.17 $ 0.06
(1) Annualized for quarterly data
Selected Financial Condition Data to reconcile GAAP Earnings to Earnings
excluding restructuring and defined benefit settlement ("DBS") charges for
2011:
Quarter to Quarter to
Year to Date Year to Date Date Date
Excluding Including Excluding Including
Restructuring Restructuring Restructuring Restructuring
DBS charges DBS charges DBS charges DBS charges
------------- ------------- ------------- -------------
(in thousands
except share
and per share
data) 09/30/11 09/30/11 09/30/11 09/30/11
------------- ------------- ------------- -------------
Performance
Ratios(1)
Return on
Average Assets 0.76% 0.40% 0.34% -0.07%
Return on
Average Equity 3.69% 2.75% 5.76% -0.45%
Non-Interest
Income to
Average Assets 1.02% 1.02% 1.21% 1.21%
Non-Interest
Expense to
Average Assets 2.89% 3.06% 2.82% 3.25%
Earnings Per
Share
Information
Restructuring
and defined
benefit
settlement
charge net of
taxes 4,028 4,028 3,009 3,009
Tax rate 19.00% 19.00% 6.00% 6.00%
Non interest
expense 85,138 90,111 21,181 24,382
Net Income 15,767 11,739 2,516 (493)
Basic weighted
common shares
outstanding 37,452,596 37,452,596 41,054,458 41,054,458
Diluted common
shares
outstanding 37,453,542 37,453,542 41,099,237 41,099,237
Basic (loss)
earnings per
common share $ 0.42 $ 0.31 $ 0.06 $ (0.01)
(1) Annualized for quarterly data
Selected Financial Condition Data to reconcile GAAP Earnings to Earnings
excluding restructuring and defined benefit settlement charges for 2011:
Including Including
Excluding Merger Excluding Merger
Merger Expense Merger Expense
Expense As Reported Expense As Reported
YTD YTD QTD QTD
----------- ----------- ----------- -----------
(in thousands except share
and per share data) 09/30/11 09/30/11 09/30/11 09/30/11
----------- ----------- ----------- -----------
Average Balances
Total assets $ 2,949,251 $ 2,949,251 $ 2,978,273 $ 2,978,273
Loans, gross:
Real estate- residential
mortgage 392,509 392,509 398,420 398,420
Real estate- commercial
mortgage 638,928 638,928 681,165 681,165
Real estate-
Acquisition,
Development &
Construction 207,026 207,026 186,398 186,398
Commercial and
industrial 224,056 224,056 208,181 208,181
Consumer loans 231,384 231,384 226,687 226,687
Loans total (1) 1,693,903 1,693,903 1,700,851 1,700,851
Securities (taxable) 695,961 695,961 717,893 717,893
Securities (non-taxable) 213,450 213,450 208,692 208,692
Total earning assets 2,609,748 2,609,748 2,634,941 2,634,941
Non earning assets 339,503 339,503 343,332 343,332
Non-interest bearing
checking 472,388 472,388 486,504 486,504
Interest bearing NOW
accounts 315,623 315,623 309,729 309,729
Total transaction accounts 788,011 788,011 796,233 796,233
Savings (including
mortgage escrow funds) 432,227 432,227 461,566 461,566
Money market deposits 489,347 489,347 504,476 504,476
Certificates of deposit 373,142 373,142 371,907 371,907
Total deposits and
mortgage escrow 2,082,727 2,082,727 2,134,182 2,134,182
Total interest bearing
deposits (including
escrow) 1,610,339 1,610,339 1,647,678 1,647,678
Borrowings 422,816 422,816 391,391 391,391
Equity 426,913 427,290 433,841 433,841
Selected Operating Data:
Condensed Tax Equivalent
Income (Loss) Statement
Interest and dividend
income $ 112,614 $ 112,614 $ 27,817 $ 27,817
Tax equivalent adjustment* 4,007 4,007 962 962
Interest expense 21,324 21,324 5,026 5,026
----------- ----------- ----------- -----------
Net interest income (tax
equivalent) 95,297 95,297 23,753 23,753
Provision for loan losses 16,584 16,584 8,784 8,784
----------- ----------- ----------- -----------
Net interest income after
provision for loan
losses 78,713 78,713 14,969 14,969
Non-interest income 29,951 29,951 9,056 9,056
Non-interest expense 90,111 90,111 24,382 24,382
----------- ----------- ----------- -----------
Income (loss) before
income tax expense 18,553 18,553 (357) (357)
Income tax expense (tax
equivalent)* 6,814 6,814 136 136
----------- ----------- ----------- -----------
Net income (loss) $ 11,739 $ 11,739 $ (493) $ (493)
=========== =========== =========== ===========
(1) Does not reflect allowance for loan losses of $27,917.
* Tax exempt income assumed at a statutory 35% federal rate
