EX-99 2 form8ka_ex99-121604.txt PROVIDENT BANCORP, INC. Pro Forma Balance Sheet September 30, 2004
PBI WCBI Purchase Note Combined Consolidated Consolidated Adjustments # Pro Forma Assets Cash and due from banks $ 107,571 $ 67,400 $ (90,393) (1) $ 84,578 Securities available for sale 534,297 291,349 - 825,646 Securities held to maturity 69,078 2,255 - 71,333 Loans, net 980,281 284,556 2,018 (2) 1,266,855 Loans held for sale 855 - - 855 Premises and equipment net 16,846 9,018 3,147 (3) 29,011 Accrued interest receivable 6,815 2,987 - 9,802 FHLB stock 10,247 7,605 - 17,852 Goodwill 65,260 886 107,080 (4) 173,226 Bank owned life insurance 13,245 13,320 - 26,565 Other identifiable intangibles 5,624 1,361 9,034 (5) 16,019 Deferred income taxes, net 5,821 4,026 5,089 (7) 14,936 Other assets 10,211 4,447 - 14,658 ----------- -------- --------- ----------- Total Assets $ 1,826,151 $689,210 $ 35,975 $ 2,551,336 =========== ======== ========= =========== Liabilities and Equity Deposits $ 1,239,532 $471,368 $ 397 (2) $ 1,711,297 Escrow deposits 2,526 745 - 3,271 Borrowings 214,909 152,100 8,421 (6) 375,430 Accrued expenses and other liabilities 19,672 17,284 - 36,956 ----------- -------- --------- ----------- Total Liabilities 1,476,639 641,497 8,818 2,126,954 ----------- -------- --------- ----------- Stockholders equity Preferred stock - - - - Common stock 397 68 7 472 Additional paid-in capital 269,325 68,701 6,094 (8) 344,120 Retained earnings 91,373 23,270 (23,270) (8) 91,373 Unallocated ESOP stock (10,854) (2,551) 2,551 (8) (10,854) Unallocated RRP stock - - - - Treasury stock (432) (40,539) 40,539 (432) Accumulated other comprehensive income (297) (1,236) 1,236 (297) ----------- -------- --------- ----------- Total Equity 349,512 47,713 27,157 424,382 ----------- -------- --------- ----------- Total liabilities and Stockholders' equity $ 1,826,151 $689,210 $ 35,975 $ 2,551,336 =========== ======== ========= ===========
PROVIDENT BANCORP, INC. Pro Forma Income Statement For the Year Ended September 30, 2004 and December 31, 2003
PBI 9/30 WCBI 12/31 Combined Consolidated Consolidated Purchase Note Pro Forma Historical Historical Adjustments # Interest Income Loans $ 54,093 $ 26,979 $(1,003) (1) $ 80,069 Securities 20,231 11,536 (3,500) (2) 28,267 Other earning assets 184 357 - 541 --------- -------- ------- -------- Total Interest Income 74,508 38,872 (4,503) 108,877 --------- -------- ------- -------- Interest Expense Interest on deposits 7,901 6,698 (253) (3) 14,346 Interest of borrowings 5,081 10,633 (2,413) (3) 13,301 --------- -------- ------- -------- Total Interest Expense 12,982 17,331 (2,666) 27,647 --------- -------- ------- -------- Net Interest Income 61,526 21,541 (1,837) 81,230 Provision for Loan Loss 800 90 - 890 --------- -------- ------- -------- Net Interest Income After Provision 60,726 21,451 (1,837) 80,340 Non-Interest Income Banking fees and services charges 6,570 5,946 - 12,516 Gain on sales of securities available for sale 2,455 405 - 2,860 Gain on sales of loans 320 451 - 771 Other 2,228 695 - 2,923 --------- -------- ------- -------- Total Non-Interest Income 11,573 7,497 - 19,070 --------- -------- ------- -------- Non-Interest Expenses Compensation and employee benefits 23,001 10,538 - 33,539 Occupancy and office operations 6,741 2,094 - 8,835 Data and check processing 3.634 1,382 - 5,016 Advertising and promotion 2,050 120 - 2,170 Professional fees 2,655 1,110 - 3,765 Amortization of core deposit intangible 2,063 206 1,975 (4) 4,244 Establishment of charitable foundation 5,000 - - 5,000 Merger integrationosts 773 - - 773 Other 10,229 3,309 - 13,538 --------- -------- ------- -------- Total non-interest expense 56,146 18,759 1,975 76,880 --------- -------- ------- -------- Net Income Before Taxes 16,153 10,189 (3,812) 22,530 Provision for Income Tax 5,136 3,729 (1,308) 7,557 --------- -------- ------- -------- Net Income $ 11,017 $ 6,460 $(2,504) $ 14,973 ========= ======== ======= ======== Earnings per share: Basic $ 0.30 $ 1.50 $ 0.35 Diluted $ 0.29 $ 1.44 $ 0.34
Footnotes to Pro Forma Consolidated Financial Statements -------------------------------------------------------- Balance Sheet ------------- (1) Represents the funds used to complete the cash portion ($72.601 million) of the acquisition purchase price paid from securities held for sale, along with pre-tax acquisition expenses of $22.5 million. Includes receipt of funds ($3.35 million) related to termination of the ESOP and repayment of the associated loan, and forfeiture of RRP shares. (2) Represents the estimated fair value adjustments relating to the loan and time deposits portfolios. The estimated lives of the portfolios are approximately three years and five years, respectively. The adjustments are assumed to amortize over the remaining lives of the underlying asset or liability on an accelerated basis. (3) Represents the estimated fair market value adjustment relating to premises and equipment. The adjustment is assumed to amortize on a straight-line basis over the remaining useful lives of the underlying assets. (4) Represents the estimate of the excess of the total direct acquisition costs over the estimated fair value of the net assets acquired based upon currently available information. Goodwill is expected to be tested for impairment annually with impairment losses, if any, charged to expense if and when they occur. (5) Represents the estimated fair market value adjustment relating to the future economic benefit of the acquired core deposits. The adjustment is assumed to amortize to expense on an accelerated basis over its estimated life of approximately 15 years. (6) Represents the estimated fair value adjustment related to the Borrower's portfolio. The estimated life of the portfolio is approximately seven years. (7) Represents the net deferred tax asset recorded at a marginal rate of 40.0% for the tax effect on the fair market value adjustments and on the deductible portion of the acquisition costs. (8) Represents the elimination of WCBI's equity as of the date of the transaction and the issuance of 6,257,892 shares at $11.92 per share to complete the common stock portion of the acquisition purchase price. Footnotes (continued) Income Statements ----------------- The pro forma income statements assume that the acquisition of Warwick Community Bancorp, Inc. was completed at the beginning of the periods presented. (1) Represents the amortization of the purchase accounting adjustment using a level yield method over the estimated life of the related asset for the years ended September 30, 2004 and December 31, 2003. (2) Represents lost earnings on merger-related costs and 50% of the purchase price that was paid in cash ($72.601 million). Reinvestment rates of 3.68% were applied for the years ended September 30, 2004 and December 31, 2003, respectively. (3) Represents the amortization of the purchase accounting adjustment using a level yield method over the estimated life of the related liabilities for the years ended September 30, 2004 and December 31, 2003. (4) Represents the amortization on an accelerated basis of the intangible asset recorded. Amortization is based on estimated life of the asset and calculated for the the years ended September 30, 2004 and December 31, 2003