MONTEBELLO, NY--(Marketwired - Jul 23, 2013) - Provident New York Bancorp (
President's Comments
Jack Kopnisky, President and CEO, commented: "We continued to successfully execute our strategy. In the third quarter we earned $6.4 million, a $167 thousand increase compared to the third quarter of 2012. Earnings declined $153 thousand compared to the linked quarter, which was mainly the result of an increase in merger-related expenses to $1.5 million compared to $542 thousand in the quarter ended March 31, 2013. Absent merger-related expenses, net income for the third fiscal quarter of 2013 increased $891 thousand, or 13.6% year-over-year and grew $492 thousand, or 7.1% on a linked quarter basis.
Our commercial banking teams are delivering results as demonstrated by our strong quarter with nearly $350 million in loan originations, which represents a 69% increase over loan originations in the fiscal third quarter of 2012 and an increase of 38% over the linked quarter. We increased our outstanding loan balances by $486 million, reaching $2.34 billion at June 30, 2013, which represents 26.2% growth over outstanding loans at June 30, 2012.
We improved operating efficiency during the quarter and have continued to focus on managing expenses. For the quarter ended June 30, 2013, our core efficiency ratio was below 60%. Our year-over-year growth in core total revenues was 10.6% while we held core operating expenses at the same levels as a year ago. Our method of calculating the core efficiency ratio is illustrated.
Our credit quality continues to improve. Although our non-performing loans of $31.5 million at June 30, 2013 increased $184 thousand compared to the linked quarter, our ratio of non-performing loans to total loans declined by seven basis points to 1.35% at June 30, 2013. Our allowance for loan losses to non-performing loans increased to 90.2% at June 30, 2013, and the positive trend in the risk ratings of our commercial loan portfolio continued as well.
Our capital and liquidity position remain strong. Our Tier 1 leverage ratio was approximately 8.49% at Provident Bank and our consolidated tangible equity to tangible assets ratio was 8.50%.
On July 2, 2013 we completed the capital raise we announced in connection with our pending merger with Sterling Bancorp (
We continue to focus primarily on serving small-to-middle market clients through a differentiated, team-based distribution strategy. We are working closely with Sterling Bancorp and continue to see tremendous opportunities in combining the two institutions. We are diligently planning all aspects of the integration through cross-functional teams from both organizations. We anticipate the merger will close during the fourth calendar quarter of 2013 and look forward to building a high performing combined institution."
Key Highlights
- Total loan originations were $347.7 million compared to $253.2 million in the linked quarter, and $206.2 million for the third fiscal quarter of 2012.
- Total loans reached $2.34 billion at June 30, 2013, a $132 million increase compared to March 31, 2013, and a $486 million year-over-year increase.
- Tax equivalent net interest margin was 3.46% for the third quarter of fiscal 2013 compared to 3.41% in the linked quarter and 3.59% in the third quarter of fiscal 2012.
- The allowance for loan losses increased to $28.4 million at June 30, 2013 and the allowance as a percentage of non-performing loans increased to 90.2% from 88.1% at March 31, 2013. The allowance for loan losses as a percentage of total loans was 1.21% at June 30, 2013, compared to 1.25% in the linked quarter. The allowance ratios are inclusive of acquired Gotham loans that were recorded at fair value at acquisition date for which there is no additional allowance for loan losses at either June 30, 2013 or March 31, 2013.
- Non-performing loans decreased from $39.8 million at September 30, 2012, to $31.5 million at June 30, 2013.
- Provision for loan losses was $3.9 million and increased by $1.3 million compared to the linked quarter. For the third quarter of fiscal 2012, the provision for loan losses was $2.3 million.
- The core efficiency ratio was 59.1% compared to 64.6% in the linked quarter and 65.5% for the third fiscal quarter of 2012. The improvement in the core efficiency ratio in the third fiscal quarter of 2013 as compared to the other periods was due to improvements in our net interest income and expense reductions in professional fees and compensation and benefits, which are discussed further below. Year-over-year core total revenues have grown 10.6%, while core non-interest expense was unchanged. See the reconciliation of this non-GAAP financial measure.
Net Interest Income and Margin
Third quarter fiscal 2013 compared with third quarter fiscal 2012
Net interest income was $28.3 million for the third quarter of fiscal 2013, up $4.2 million compared to the third quarter of fiscal 2012 due mainly to higher average loan volumes. Reflecting the current interest rate environment, the tax-equivalent yield on investments decreased 41 basis points and yield on loans declined 21 basis points compared to the third quarter of fiscal 2012. As a result, the yield on interest-earning assets declined 23 basis points to 3.97% on a tax equivalent basis for the third quarter of fiscal 2013. The cost of total deposits decreased five basis points to 17 basis points from the year ago quarter, mainly due to the maturity of higher priced certificates of deposit which were re-priced to current market interest rates. The cost of borrowings decreased 93 basis points to 2.84%, as a higher portion of borrowings were overnight borrowings in the third quarter of 2013. The net interest margin on a tax-equivalent basis was 3.46% for the third quarter of fiscal 2013 compared to 3.59% for the same period a year ago.
Third quarter fiscal 2013 compared with linked quarter ended March 31, 2013
Net interest income for the quarter ended June 30, 2013 increased $498 thousand to $28.3 million, compared to $27.8 million for the linked quarter ended March 31, 2013. Interest income on loans increased $260 thousand as a result of strong loan growth during the quarter. In addition, interest expense on deposits continued to decline. Inclusive of non-interest bearing deposits, interest expense on total deposits was 17 basis points for the third fiscal quarter compared to 22 basis points for the second fiscal quarter of 2013. Yield on loans decreased 13 basis points and was 4.80%. The yield on interest earning assets increased one basis point to 3.97% from 3.96% in the linked quarter. As a result of the above mentioned factors the tax-equivalent net interest margin increased to 3.46% from 3.41% in the linked quarter.
Non-interest Income
Third quarter fiscal 2013 compared with third quarter fiscal 2012
Non-interest income declined $1.4 million to $6.6 million for the third quarter of fiscal 2013 compared with the third quarter of fiscal 2012. The decrease was mainly due to a decrease in net gain on sales of securities of $467 thousand and an aggregate decrease in investment management fees and title insurance fees of $373 thousand. In fiscal 2012 we sold the assets of our former subsidiaries that were active in title insurance and investment management businesses.
Third quarter fiscal 2013 compared with linked quarter ended March 31, 2013
Non-interest income decreased $271 thousand to $6.6 million for the third fiscal quarter of 2013 compared to the linked quarter ended March 31, 2013. The decline was principally due to lower net gain on sales of securities, which declined $284 thousand. Also contributing to the decline in non-interest income were lower deposit fees and service charges of $121 thousand and a decline in gain on sale of loans of $78 thousand. Our new title insurance and investment management initiatives are gaining momentum and are beginning to contribute to our non-interest income. Aggregate title insurance and investment management fees increased $256 thousand compared to the linked quarter.
Non-interest Expense
Third quarter fiscal 2013 compared with third quarter fiscal 2012
Non-interest expense increased $627 thousand to $21.8 million relative to the third quarter of fiscal 2012 principally the result of an increase of $1.1 million in merger-related expenses. Other factors that contributed to the increase were additional personnel expense associated with the continued growth in the number of our commercial banking teams and related occupancy expense. These increases were partially offset by a reduction in professional fees and foreclosed property expenses, which declined by $602 thousand and $456 thousand, respectively, as compared to the same period a year ago.
Third quarter fiscal 2013 compared with the linked quarter ended March 31, 2013
Non-interest expense declined $1.6 million compared to the linked quarter notwithstanding a $974 thousand increase in merger-related expenses associated with our pending merger with Sterling Bancorp. The decrease in non-interest expense was a result of lower professional fees of $386 thousand, lower foreclosed property expense of $943 thousand and a reduction in compensation and benefits of $485 thousand. The decrease in compensation and benefits was mainly driven by staff turnover, lower payroll taxes and an increase in deferred compensation due to higher volumes of loan originations in the quarter.
Income Taxes
In the third quarter of fiscal 2013, the Company recorded income tax expense at 30.8% compared to an estimated effective tax rate of 25.2% in the linked quarter and 27.7% for the same period in fiscal 2012. The increase in the estimated effective tax rate in the third quarter of fiscal 2013 was due to our expectation that a portion of current and anticipated merger-related expenses will not be tax deductible.
Credit Quality
Non-performing loans decreased to $31.5 million at June 30, 2013 compared to $39.8 million at September 30, 2012. During the first nine months of the fiscal year we exited several large credit relationships, which contributed to the decline. Net charge-offs for the third quarter were $3.1 million compared to $3.2 million in the linked quarter. Non-performing loans at June 30, 2013 were $184 thousand higher compared to the prior quarter end. The allowance for loan losses at June 30, 2013 was $28.4 million, which represented 90.2% of non-performing loans and 1.21% of our total loan portfolio. This compares to the linked quarter, in which the allowance for loan losses was $27.5 million, which represented 88.1% of non-performing loans and 1.25% of our total loan portfolio. A significant portion of the increase in the allowance for loan losses was related to the higher balance of loans outstanding at June 30, 2013. The allowance for loan losses to total loans, excluding loans acquired in the Gotham transaction that were recorded at fair value at the acquisition date and continue to carry no allowance was 1.30% and 1.36%, at June 30, 2013 and March 31, 2013, respectively. Please refer to the Company's reconciliation of this non-GAAP measure.
During the quarter, the balance of foreclosed properties declined $1.1 million to $4.4 million. Several properties were sold during the quarter, which reduced the balance by $1.3 million. We incurred $284 thousand of write-downs on properties to reflect current appraisal values. Partially offsetting these declines were additions to OREO which totaled $504 thousand.
Key Balance Sheet Changes Year-to-Date
- Total assets at June 30, 2013 decreased $198.6 million or 4.94% compared to September 30, 2012, mainly related to a decrease in our cash balance of $328.8 million. Our cash balance at September 30, 2012 was elevated given a seasonal increase in municipal deposits due to municipal tax collections that were subsequently drawn down.
- Loans at June 30, 2013 increased $217.1 million or 13.7% on an annual basis compared to September 30, 2012.
- Commercial real estate and commercial and industrial loans increased $247.6 million or 23.3% on an annual basis compared to September 30, 2012.
- Acquisition development and construction loans declined to $106.2 million at June 30, 2013 from $144.1 million at September 30, 2012.
- Securities at June 30, 2013 decreased $87.5 million as compared to September 30, 2012. As of June 30, 2013, securities represented 27.9% of total assets compared to 28.7% at September 30, 2012.
- Deposits decreased $371.9 million between September 30, 2012 and June 30, 2013. Municipal deposits decreased $436.2 million compared to September 30, 2012, as a result of seasonal tax deposits; this was partially offset by increases in other deposits of $64.2 million.
Capital and Liquidity
Provident Bank remained well capitalized at June 30, 2013 with a Tier 1 leverage ratio of 8.49% based on period end assets. The Company's stockholders' equity decreased $11.0 million from September 30, 2012, to $480.2 million at June 30, 2013. Tangible book value per share decreased by $0.25 to $7.01 at June 30, 2013 from $7.26 at September 30, 2012. These declines were mainly the result of changes in interest rates which caused a decline in the accumulated other comprehensive income component of stockholders' equity during the period of $24.6 million. For the quarter ended June 30, 2013, the basic and diluted weighted average common shares outstanding increased to 43.8 million and 43.9 million, respectively, compared to 41.1 million, basic and diluted shares, for the quarter ended September 30, 2012 as a result of our equity capital raise in August 2012.
About Provident New York Bancorp
Headquartered in Montebello, N.Y. Provident New York Bancorp is the holding company for Provident Bank, a growing financial services firm with $3.8 billion in assets that specializes in the delivery of service and solutions to business owners, their families, and consumers in communities within the greater New York City area through teams of dedicated and experienced relationship managers. Provident Bank offers a complete line of commercial, business, and consumer banking products and services. For more information, visit the Provident Bank web site at https://www.providentbanking.com.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company's actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. In addition to factors previously disclosed in reports filed with the Securities and Exchange Commission, the following factors, among others, could cause actual results to differ materially from forward-looking statements: ability to obtain regulatory approvals and meet other closing conditions to the merger (the "Merger") between Provident New York Bancorp ("Provident") and Sterling Bancorp ("Sterling"), including approval by Provident and Sterling shareholders, on the expected terms and schedule; delay in closing the Merger; difficulties and delays in integrating the Provident and Sterling businesses or fully realizing cost savings and other benefits; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; changes in Provident's stock price before the completion of the Merger, including as a result of the financial performance of Sterling prior to closing; the reaction to the Merger of the companies' customers, employees and counterparties; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Actual results or future events could differ, possibly materially, from those that we anticipated in our forward-looking statements, and future results could differ materially from our historical performance. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
Financial information contained in this release should be considered to be an estimate pending the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require information received by management between the date of this release and the filing of the 10-Q to be reflected in the results of the fiscal period, even though the new information was received by management subsequent to the date of this release.
Additional Information for Stockholders
In connection with the proposed merger, Provident has filed with the Securities and Exchange Commission ("SEC") a Registration Statement on Form S-4/A that includes a joint proxy statement of Provident and Sterling and a prospectus of Provident, as well as other relevant documents concerning the proposed transaction. Provident and Sterling will mail the joint proxy statement/prospectus to their stockholders. STOCKHOLDERS OF PROVIDENT AND STERLING ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and security holders may obtain a free copy of the preliminary proxy statement/prospectus and other filings containing information about Provident and Sterling at the SEC's website at www.sec.gov. The joint preliminary proxy statement/prospectus and the other filings may also be obtained free of charge at Provident's website at www.providentbanking.com under the tab "Investor Relations," and then under the heading "SEC Filings" or at Sterling's website at www.snb.com under the tab "Investor Relations," and then under the heading "SEC Filings."
Provident, Sterling and certain of their respective directors and executive officers, under the SEC's rules, may be deemed to be participants in the solicitation of proxies of Provident's and Sterling's shareholders in connection with the proposed merger. Information about the directors and executive officers of Provident and their ownership of Provident common stock is set forth in the proxy statement for Provident's 2013 annual meeting of shareholders, as filed with the SEC on Schedule 14A on January 10, 2013 and the preliminary proxy statement/prospectus related to the proposed merger, which is included in the registration statement on Form S-4/A that was filed with the SEC on July 17, 2013. Information about the directors and executive officers of Sterling and their ownership of Sterling common stock is set forth in the proxy statement for Sterling's 2012 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on April 3, 2012 and the preliminary proxy statement/prospectus included in the Form S-4/A. Free copies of these documents may be obtained as described in the preceding paragraph. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the definitive proxy statement/prospectus regarding the proposed merger when it becomes available.
| Provident New York Bancorp and Subsidiaries | ||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||||
| (unaudited, in thousands, except share and per share data) | ||||||||||||||
| 6/30/2013 | 9/30/2012 | 6/30/2012 | ||||||||||||
| Assets: | ||||||||||||||
| Cash and due from banks | $ | 109,166 | $ | 437,982 | $ | 111,400 | ||||||||
| Investment securities | 1,065,724 | 1,153,248 | 885,433 | |||||||||||
| HVIA assets held for sale | - | 4,550 | - | |||||||||||
| Loans held for sale | 1,539 | 7,505 | 5,369 | |||||||||||
| Loans: | ||||||||||||||
| Residential mortgage | 369,613 | 350,022 | 357,943 | |||||||||||
| Commercial real estate | 1,210,248 | 1,072,504 | 906,798 | |||||||||||
| Commercial and industrial | 453,145 | 343,307 | 207,966 | |||||||||||
| Acquisition, development and construction | 106,198 | 144,061 | 165,125 | |||||||||||
| Consumer | 197,330 | 209,578 | 213,195 | |||||||||||
| Total loans, gross | 2,336,534 | 2,119,472 | 1,851,027 | |||||||||||
| Allowance for loan losses | (28,374 | ) | (28,282 | ) | (27,587 | ) | ||||||||
| Total loans, net | 2,308,160 | 2,091,190 | 1,823,440 | |||||||||||
| Federal Home Loan Bank stock, at cost | 28,368 | 19,249 | 18,207 | |||||||||||
| Premises and equipment, net | 37,473 | 38,483 | 38,877 | |||||||||||
| Goodwill | 163,117 | 163,247 | 160,861 | |||||||||||
| Other amortizable intangibles | 6,201 | 7,164 | 3,718 | |||||||||||
| Bank owned life insurance | 60,412 | 59,017 | 58,506 | |||||||||||
| Foreclosed properties | 4,376 | 6,403 | 7,292 | |||||||||||
| Other assets | 39,893 | 34,944 | 36,937 | |||||||||||
| Total assets | $ | 3,824,429 | $ | 4,022,982 | $ | 3,150,040 | ||||||||
| Liabilities: | ||||||||||||||
| Deposits | $ | 2,739,214 | $ | 3,111,151 | $ | 2,332,091 | ||||||||
| Borrowings | 552,805 | 345,176 | 314,154 | |||||||||||
| Mortgage escrow funds | 25,915 | 11,919 | 24,223 | |||||||||||
| Other liabilities | 26,330 | 63,614 | 36,444 | |||||||||||
| Total liabilities | 3,344,264 | 3,531,860 | 2,706,912 | |||||||||||
| Stockholders' equity | 480,165 | 491,122 | 443,128 | |||||||||||
| Total liabilities and stockholders' equity | $ | 3,824,429 | $ | 4,022,982 | $ | 3,150,040 | ||||||||
| Shares of common stock outstanding at period end | 44,353,276 | 44,173,470 | 37,899,007 | |||||||||||
| Book value per share | $ | 10.83 | $ | 11.12 | $ | 11.69 | ||||||||
| Tangible book value per share | 7.01 | 7.26 | 7.35 | |||||||||||
| Provident New York Bancorp and Subsidiaries | |||||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF INCOME | |||||||||||||||||
| (unaudited, in thousands, except share and per share data) | |||||||||||||||||
| For the Quarter Ended | For the Nine Months Ended | ||||||||||||||||
| 6/30/2013 | 3/31/2013 | 6/30/2012 | 6/30/2013 | 6/30/2012 | |||||||||||||
| Interest and dividend income: | |||||||||||||||||
| Loans and loan fees | $ | 26,638 | $ | 26,378 | $ | 22,312 | $ | 80,087 | $ | 66,614 | |||||||
| Securities taxable | 4,189 | 4,288 | 4,224 | 12,761 | 12,629 | ||||||||||||
| Securities non-taxable | 1,500 | 1,490 | 1,581 | 4,447 | 4,954 | ||||||||||||
| Other earning assets | 266 | 264 | 228 | 863 | 727 | ||||||||||||
| Total interest income | 32,593 | 32,420 | 28,345 | 98,158 | 84,924 | ||||||||||||
| Interest expense: | |||||||||||||||||
| Deposits | 1,151 | 1,624 | 1,262 | 4,872 | 3,792 | ||||||||||||
| Borrowings | 3,125 | 2,977 | 3,001 | 9,227 | 9,907 | ||||||||||||
| Total interest expense | 4,276 | 4,601 | 4,263 | 14,099 | 13,699 | ||||||||||||
| Net interest income | 28,317 | 27,819 | 24,082 | 84,059 | 71,225 | ||||||||||||
| Provision for loan losses | 3,900 | 2,600 | 2,312 | 9,450 | 7,112 | ||||||||||||
| Net interest income after provision for loan losses | 24,417 | 25,219 | 21,770 | 74,609 | 64,113 | ||||||||||||
| Non-interest income: | |||||||||||||||||
| Deposit fees and service charges | 2,615 | 2,736 | 2,816 | 8,129 | 8,312 | ||||||||||||
| Net gain on sales of securities | 1,945 | 2,229 | 2,412 | 5,590 | 7,300 | ||||||||||||
| Other than temporary loss on securities | - | (7 | ) | (6 | ) | (32 | ) | (44 | ) | ||||||||
| Investment management fees | 613 | 422 | 802 | 1,740 | 2,367 | ||||||||||||
| Title insurance fees | 65 | - | 249 | 324 | 774 | ||||||||||||
| Bank owned life insurance | 496 | 491 | 518 | 1,496 | 1,538 | ||||||||||||
| Gain on sale of loans | 429 | 507 | 578 | 1,682 | 1,468 | ||||||||||||
| Other | 418 | 474 | 610 | 2,163 | 1,411 | ||||||||||||
| Total non-interest income | 6,581 | 6,852 | 7,979 | 21,092 | 23,126 | ||||||||||||
| Non-interest expense: | |||||||||||||||||
| Compensation and benefits | 11,320 | 11,805 | 10,845 | 35,424 | 33,165 | ||||||||||||
| Stock-based compensation plans | 547 | 679 | 326 | 1,726 | 885 | ||||||||||||
| Occupancy and office operations | 3,423 | 3,954 | 3,388 | 11,187 | 10,498 | ||||||||||||
| Merger-related expenses | 1,516 | 542 | 451 | 2,058 | 997 | ||||||||||||
| Advertising and promotion | 307 | 535 | 440 | 1,086 | 1,480 | ||||||||||||
| Professional fees | 526 | 912 | 1,128 | 2,653 | 3,111 | ||||||||||||
| Data and check processing | 588 | 823 | 705 | 2,060 | 2,087 | ||||||||||||
| Amortization of intangible assets | 337 | 388 | 283 | 986 | 911 | ||||||||||||
| FDIC insurance and regulatory assessments | 875 | 753 | 782 | 2,346 | 2,253 | ||||||||||||
| ATM/debit card expense | 465 | 415 | 437 | 1,322 | 1,273 | ||||||||||||
| Foreclosed property expense | (28 | ) | 915 | 428 | 1,172 | 1,045 | |||||||||||
| Other | 1,913 | 1,618 | 1,949 | 5,654 | 5,468 | ||||||||||||
| Total non-interest expense | 21,789 | 23,339 | 21,162 | 67,674 | 63,173 | ||||||||||||
| Income before income tax expense | 9,209 | 8,732 | 8,587 | 28,027 | 24,066 | ||||||||||||
| Income tax expense | 2,833 | 2,203 | 2,378 | 8,102 | 6,439 | ||||||||||||
| Net income | $ | 6,376 | $ | 6,529 | $ | 6,209 | $ | 19,925 | $ | 17,627 | |||||||
| Basic earnings per share | $ | 0.15 | $ | 0.15 | $ | 0.17 | $ | 0.46 | $ | 0.47 | |||||||
| Diluted earnings per share | 0.15 | 0.15 | 0.17 | 0.45 | 0.47 | ||||||||||||
| Dividends declared per share | 0.06 | 0.06 | 0.06 | 0.18 | 0.18 | ||||||||||||
| Weighted average common shares: | |||||||||||||||||
| Basic | 43,801,867 | 43,743,640 | 37,302,693 | 43,766,402 | 37,278,507 | ||||||||||||
| Diluted | 43,906,158 | 43,848,486 | 37,330,467 | 43,850,601 | 37,292,366 | ||||||||||||
| Selected Financial Condition Data: | As of and for the Quarter Ended | ||||||||||||||
| (in thousands except share and per share data) | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | ||||||||||
| End of Period | |||||||||||||||
| Total assets | $ | 3,824,429 | $ | 3,710,440 | $ | 3,789,514 | $ | 4,022,982 | $ | 3,150,040 | |||||
| Securities available for sale | 889,747 | 945,678 | 991,298 | 1,010,872 | 714,200 | ||||||||||
| Securities held to maturity | 175,977 | 183,535 | 139,874 | 142,376 | 171,233 | ||||||||||
| Loans, gross 1 | 2,336,534 | 2,204,555 | 2,193,129 | 2,119,472 | 1,851,027 | ||||||||||
| Goodwill | 163,117 | 163,117 | 163,247 | 163,247 | 160,861 | ||||||||||
| Other amortizable intangibles | 6,201 | 6,538 | 6,926 | 7,164 | 3,718 | ||||||||||
| Deposits | 2,739,214 | 2,799,658 | 2,904,384 | 3,111,151 | 2,332,091 | ||||||||||
| Municipal deposits (included above) | 465,566 | 537,070 | 538,212 | 901,739 | 479,772 | ||||||||||
| Borrowings | 552,805 | 367,976 | 345,411 | 345,176 | 314,154 | ||||||||||
| Equity | 480,165 | 494,711 | 493,883 | 491,122 | 444,670 | ||||||||||
| Tangible equity | 310,847 | 325,056 | 323,710 | 320,711 | 280,091 | ||||||||||
| Average Balances | |||||||||||||||
| Total assets | $ | 3,745,356 | $ | 3,804,660 | $ | 3,792,201 | $ | 3,451,055 | $ | 3,133,958 | |||||
| Loans, gross: | |||||||||||||||
| Residential mortgage | 366,823 | 360,840 | 344,064 | 352,724 | 360,487 | ||||||||||
| Commercial real estate | 1,175,094 | 1,138,333 | 1,107,779 | 989,349 | 868,963 | ||||||||||
| Commercial and industrial | 398,622 | 368,896 | 354,137 | 263,922 | 205,051 | ||||||||||
| Acquisition, development and construction | 114,286 | 122,937 | 138,881 | 156,726 | 165,442 | ||||||||||
| Consumer | 199,861 | 203,492 | 208,064 | 210,650 | 215,555 | ||||||||||
| Loans total 1 | 2,254,686 | 2,194,498 | 2,152,925 | 1,973,371 | 1,815,498 | ||||||||||
| Securities (taxable) | 909,312 | 967,889 | 954,372 | 841,373 | 778,782 | ||||||||||
| Securities (non-taxable) | 184,325 | 181,803 | 174,201 | 181,540 | 182,003 | ||||||||||
| Total earning assets | 3,378,655 | 3,403,209 | 3,380,875 | 3,070,315 | 2,797,093 | ||||||||||
| Deposits: | |||||||||||||||
| Non-interest bearing demand | 625,684 | 641,194 | 649,077 | 592,962 | 483,589 | ||||||||||
| Interest bearing NOW accounts | 461,390 | 508,129 | 469,180 | 398,493 | 412,072 | ||||||||||
| Savings (including mortgage escrow funds) | 581,106 | 575,380 | 531,107 | 539,904 | 493,234 | ||||||||||
| Money market | 777,857 | 877,101 | 908,262 | 756,655 | 697,342 | ||||||||||
| Certificates of deposit | 338,017 | 355,917 | 380,244 | 303,788 | 265,375 | ||||||||||
| Total deposits and mortgage escrow | 2,784,054 | 2,957,721 | 2,937,870 | 2,591,802 | 2,351,612 | ||||||||||
| Borrowings | 440,579 | 345,717 | 345,951 | 336,217 | 320,237 | ||||||||||
| Equity | 494,049 | 492,725 | 492,506 | 475,652 | 441,956 | ||||||||||
| Tangible equity | 324,540 | 322,683 | 319,783 | 308,029 | 277,205 | ||||||||||
| Selected Operating Data: | |||||||||||||||
| Condensed Tax Equivalent Income Statement | |||||||||||||||
| Interest and dividend income | $ | 32,593 | $ | 32,420 | $ | 33,145 | $ | 30,113 | $ | 28,345 | |||||
| Tax equivalent adjustment* | 808 | 802 | 785 | 830 | 852 | ||||||||||
| Interest expense | 4,276 | 4,601 | 5,222 | 4,874 | 4,263 | ||||||||||
| Net interest income (tax equivalent) | 29,125 | 28,621 | 28,708 | 26,069 | 24,934 | ||||||||||
| Provision for loan losses | 3,900 | 2,600 | 2,950 | 3,500 | 2,312 | ||||||||||
| Net interest income after provision for loan losses | 25,225 | 26,021 | 25,758 | 22,569 | 22,622 | ||||||||||
| Non-interest income | 6,581 | 6,852 | 7,659 | 9,026 | 7,979 | ||||||||||
| Non-interest expense | 21,789 | 23,339 | 22,546 | 28,784 | 21,162 | ||||||||||
| Income before income tax expense | 10,017 | 9,534 | 10,871 | 2,811 | 9,439 | ||||||||||
| Income tax expense (tax equivalent)* | 3,641 | 3,005 | 3,851 | 550 | 3,230 | ||||||||||
| $ | 6,376 | $ | 6,529 | $ | 7,020 | $ | 2,261 | $ | 6,209 | ||||||
| 1 Does not reflect allowance for loan losses of $28,374, $27,544, $28,114, $28,282, and $27,587. |
| * Tax exempt income assumed at a statutory 35% federal tax rate. |
| For the Quarter Ended | |||||||||||||||||
| 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | |||||||||||||
| Per Share Data | |||||||||||||||||
| Basic earnings per share | $ | 0.15 | $ | 0.15 | $ | 0.16 | $ | 0.06 | $ | 0.17 | |||||||
| Diluted earnings per share | 0.15 | 0.15 | 0.16 | 0.06 | 0.17 | ||||||||||||
| Dividends declared per share | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 | ||||||||||||
| Book value per share | 10.83 | 11.15 | 11.14 | 11.12 | 11.73 | ||||||||||||
| Shares of common stock outstanding | 44,353,276 | 44,353,276 | 44,348,787 | 44,173,470 | 37,899,007 | ||||||||||||
| Basic weighted average common shares outstanding | 43,801,867 | 43,743,640 | 43,637,315 | 41,054,458 | 37,302,693 | ||||||||||||
| Diluted weighted average common shares outstanding | 43,906,158 | 43,848,486 | 43,721,091 | 41,099,237 | 37,330,467 | ||||||||||||
| Performance Ratios (annualized) | |||||||||||||||||
| Return on average assets | 0.68 | % | 0.70 | % | 0.73 | % | 0.26 | % | 0.80 | % | |||||||
| Return on average equity | 5.18 | % | 5.37 | % | 5.65 | % | 1.89 | % | 5.65 | % | |||||||
| Return on average tangible equity 1 | 7.88 | % | 8.21 | % | 8.71 | % | 2.92 | % | 9.01 | % | |||||||
| Core operating efficiency 1 | 59.1 | % | 64.6 | % | 62.9 | % | 72.0 | % | 65.5 | % | |||||||
| Analysis of Net Interest Income | |||||||||||||||||
| Yield on loans | 4.80 | % | 4.93 | % | 5.04 | % | 4.97 | % | 5.01 | % | |||||||
| Yield on investment securities - tax equivalent2 | 2.38 | % | 2.32 | % | 2.29 | % | 2.44 | % | 2.79 | % | |||||||
| Yield on earning assets - tax equivalent2 | 3.97 | % | 3.96 | % | 3.98 | % | 4.01 | % | 4.20 | % | |||||||
| Cost of deposits | 0.17 | % | 0.22 | % | 0.28 | % | 0.27 | % | 0.22 | % | |||||||
| Cost of borrowings | 2.84 | % | 3.49 | % | 3.58 | % | 3.65 | % | 3.77 | % | |||||||
| Cost of interest bearing liabilities | 0.66 | % | 0.70 | % | 0.79 | % | 0.83 | % | 0.78 | % | |||||||
| Net interest rate spread - tax equivalent basis2 | 3.31 | % | 3.26 | % | 3.19 | % | 3.18 | % | 3.42 | % | |||||||
| Net interest margin - tax equivalent basis2 | 3.46 | % | 3.41 | % | 3.37 | % | 3.38 | % | 3.59 | % | |||||||
| Capital | |||||||||||||||||
| Tier 1 leverage ratio - Bank only | 8.49 | % | 8.62 | % | 8.23 | % | 7.49 | % | 8.67 | % | |||||||
| Tier 1 risk-based capital - Bank only | $ | 311,508 | 3 | $ | 304,696 | 3 | $ | 297,089 | $ | 289,441 | $ | 257,621 | |||||
| Total risk-based capital - Bank only | 340,078 | 3 | 332,447 | 3 | 325,410 | 317,929 | 283,033 | ||||||||||
| Tangible equity as a % of tangible assets - consolidated 1 | 8.50 | % | 9.18 | % | 8.94 | % | 8.32 | % | 9.38 | % | |||||||
| Asset Quality | |||||||||||||||||
| Non-performing loans (NPLs): non-accrual | $ | 27,244 | $ | 27,019 | $ | 27,730 | $ | 35,444 | $ | 41,048 | |||||||
| Non-performing loans (NPLs): still accruing | 4,216 | 4,257 | 5,823 | 4,370 | 3,450 | ||||||||||||
| Other real estate owned | 4,376 | 5,486 | 7,053 | 6,403 | 7,292 | ||||||||||||
| Non-performing assets (NPAs) | 35,836 | 36,762 | 40,606 | 46,217 | 51,790 | ||||||||||||
| Net charge-offs | 3,070 | 3,170 | 3,118 | 2,805 | 2,512 | ||||||||||||
| Net charge-offs a % of average loans (annualized) | 0.54 | % | 0.58 | % | 0.58 | % | 0.57 | % | 0.55 | % | |||||||
| NPLs a % of total loans | 1.35 | % | 1.42 | % | 1.53 | % | 1.88 | % | 2.40 | % | |||||||
| NPAs a % of total assets | 0.94 | % | 0.99 | % | 1.07 | % | 1.15 | % | 1.64 | % | |||||||
| Allowance for loan losses a % of NPLs | 90.2 | % | 88.1 | % | 83.8 | % | 71.0 | % | 62.0 | % | |||||||
| Allowance for loan losses a % of total loans | 1.21 | % | 1.25 | % | 1.28 | % | 1.33 | % | 1.49 | % | |||||||
| Allowance for loan losses a % of total loans, excluding Gotham loans1 | 1.30 | % | 1.36 | % | 1.41 | % | 1.47 | % | 1.49 | % | |||||||
| Special mention loans | $ | 24,327 | $ | 41,778 | $ | 29,755 | $ | 42,422 | $ | 37,555 | |||||||
| Substandard / doubtful loans | 62,165 | 70,688 | 83,109 | 88,674 | 88,395 | ||||||||||||
| 1 See reconciliation of non-GAAP measure on following page. |
| 2 Tax equivalent adjustment represents interest income earned on municipal securities divided by the applicable Federal tax rate of 35% for all periods presented |
| 3 Represents preliminary results for the quarter ended June 30, 2013. |
| Non GAAP Financial Measures | As of and for the Quarter Ended | |||||||||||||||
| (in thousands except share and per share data) | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | |||||||||||
| The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors. | ||||||||||||||||
| The following table shows the reconciliation of stockholders' equity to tangible equity and the tangible equity ratio: | ||||||||||||||||
| Total assets | $ | 3,824,429 | $ | 3,710,440 | $ | 3,789,514 | $ | 4,022,982 | $ | 3,150,040 | ||||||
| Goodwill and other amortizable intangibles | (169,318 | ) | (169,655 | ) | (170,173 | ) | (170,411 | ) | (164,579 | ) | ||||||
| Tangible assets | 3,655,111 | 3,540,785 | 3,619,341 | 3,852,571 | 2,985,461 | |||||||||||
| Stockholders' equity | 480,165 | 494,711 | 493,883 | 491,122 | 444,670 | |||||||||||
| Goodwill and other amortizable intangibles | (169,318 | ) | (169,655 | ) | (170,173 | ) | (170,411 | ) | (164,579 | ) | ||||||
| Tangible stockholders' equity | 310,847 | 325,056 | 323,710 | 320,711 | 280,091 | |||||||||||
| Shares of common stock outstanding at period end | 44,353,276 | 44,353,276 | 44,348,787 | 44,173,470 | 37,899,007 | |||||||||||
| Tangible equity as a % of tangible assets | 8.50 | % | 9.18 | % | 8.94 | % | 8.32 | % | 9.38 | % | ||||||
| Tangible book value per share | $ | 7.01 | $ | 7.33 | $ | 7.30 | $ | 7.26 | $ | 7.39 | ||||||
| The Company believes that tangible equity is useful as a tool to help assess a company's capital position. | ||||||||||||||||
| The following table shows the reconciliation of return on average tangible equity: | ||||||||||||||||
| Average stockholders' equity | $ | 494,049 | $ | 492,725 | $ | 492,506 | $ | 475,652 | $ | 441,956 | ||||||
| Average goodwill and other amortizable intangibles | (169,509 | ) | (170,042 | ) | (172,723 | ) | (167,623 | ) | (164,751 | ) | ||||||
| Average tangible stockholders' equity | 324,540 | 322,683 | 319,783 | 308,029 | 277,205 | |||||||||||
| Net income | 6,376 | 6,529 | 7,020 | 2,261 | 6,209 | |||||||||||
| Net income, if annualized | 25,574 | 26,479 | 27,851 | 8,995 | 24,972 | |||||||||||
| Return on average tangible equity | 7.88 | % | 8.21 | % | 8.71 | % | 2.92 | % | 9.01 | % | ||||||
| The Company believes that the return on average tangible stockholders' equity is useful as a tool to help measure and assess a company's use of equity. | ||||||||||||||||
| The following table shows the reconciliation of the core operating efficiency ratio: | ||||||||||||||||
| Net interest income | $ | 28,317 | $ | 27,819 | $ | 27,923 | $ | 25,239 | $ | 24,082 | ||||||
| Non-interest income | 6,581 | 6,852 | 7,659 | 9,026 | 7,979 | |||||||||||
| Total net revenues | 34,898 | 34,671 | 35,582 | 34,265 | 32,061 | |||||||||||
| Tax equivalent adjustment on securities interest income | 808 | 802 | 785 | 830 | 852 | |||||||||||
| Net gain on sales of securities | (1,945 | ) | (2,229 | ) | (1,416 | ) | (3,152 | ) | (2,412 | ) | ||||||
| Other than temporary loss on securities | - | 7 | 25 | 3 | 6 | |||||||||||
| Other, (other gains and fair value loss on interest rate caps) | - | - | (4 | ) | (64 | ) | 14 | |||||||||
| Core total revenues | 33,761 | 33,251 | 34,972 | 31,882 | 30,521 | |||||||||||
| Non-interest expense | 21,789 | 23,339 | 22,546 | 28,784 | 21,162 | |||||||||||
| Merger related expense | (1,516 | ) | (542 | ) | - | (4,928 | ) | (451 | ) | |||||||
| Foreclosed property expense | 28 | (915 | ) | (285 | ) | (573 | ) | (428 | ) | |||||||
| Amortization of intangible assets | (337 | ) | (388 | ) | (261 | ) | (334 | ) | (283 | ) | ||||||
| Core non-interest expense | 19,964 | 21,494 | 22,000 | 22,949 | 20,000 | |||||||||||
| Core efficiency ratio | 59.1 | % | 64.6 | % | 62.9 | % | 72.0 | % | 65.5 | % | ||||||
| The core efficiency ratio reflects total revenues inclusive of the tax equivalent adjustment on municipal securities and excludes securities gains, other than temporary impairments and the other adjustments shown above. Core non-interest expense is adjusted to exclude the effect of foreclosed property expense and amortization of intangible assets. The Company believes this non-GAAP information provides useful information to users to assess the Company's core operations. | ||||||||||||||||
| The following table shows the reconciliation of the allowance for loan losses to total loans and to total loans excluding Gotham loans: | ||||||||||||||||
| Total loans | $ | 2,336,534 | $ | 2,204,555 | $ | 2,193,129 | $ | 2,119,472 | $ | 1,851,027 | ||||||
| Gotham loans | (152,825 | ) | (176,383 | ) | (194,518 | ) | (201,794 | ) | - | |||||||
| Total loans, excluding Gotham loans | 2,183,709 | 2,028,172 | 1,998,611 | 1,917,678 | 1,851,027 | |||||||||||
| Allowance for loan losses | 28,374 | 27,544 | 28,114 | 28,282 | 27,587 | |||||||||||
| Allowance for loan losses to total loans | 1.21 | % | 1.25 | % | 1.28 | % | 1.33 | % | 1.49 | % | ||||||
| Allowance for loan losses to total loans, excluding Gotham loans | 1.30 | % | 1.36 | % | 1.41 | % | 1.47 | % | NA | |||||||
| As required by GAAP, the Company recorded at fair value the loans acquired in the Gotham transaction. These loans carry no allowance for loan losses in losses for the periods reflected above. | ||||||||||||||||
| Non-GAAP Financial Measures | As of and for the Quarter Ended | |||||||||||||||
| (in thousands except share and per share data) | 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | |||||||||||
| The Company provides supplemental reporting of non-GAAP measures as management believes this information is useful to investors. | ||||||||||||||||
| The following table shows the reconciliation of net income and earnings per share excluding merger-related expenses: | ||||||||||||||||
| Income before income tax expense | $ | 9,209 | $ | 8,732 | $ | 10,086 | $ | 1,981 | $ | 8,587 | ||||||
| Income tax expense | 2,833 | 2,203 | 3,066 | (280 | ) | 2,378 | ||||||||||
| Net income | 6,376 | 6,529 | 7,020 | 2,261 | 6,209 | |||||||||||
| Merger-related expenses | 1,516 | 542 | - | 4,928 | 451 | |||||||||||
| Income tax benefit | 466 | 137 | - | 697 | 125 | |||||||||||
| After-tax merger-related expenses | 1,050 | 405 | - | 4,231 | 326 | |||||||||||
| Net income excluding merger-related expenses | $ | 7,426 | $ | 6,934 | $ | 7,020 | $ | 6,492 | $ | 6,535 | ||||||
| Diluted shares | 43,906,158 | 43,848,486 | 43,721,091 | 41,099,237 | 37,330,467 | |||||||||||
| Diluted EPS as reported | $ | 0.15 | $ | 0.15 | $ | 0.16 | $ | 0.06 | $ | 0.17 | ||||||
| Diluted EPS excluding merger-related expenses | $ | 0.17 | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.18 | ||||||
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