UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: April 25, 2011
(Date of earliest event reported)
PROVIDENT NEW YORK BANCORP
(Exact name of registrant as specified in its charter)
DE
(State or other jurisdiction
of incorporation)
0-25233
(Commission File Number)
80-0091851
(IRS Employer
Identification Number)
400 RELLA BOULEVARD, MONTEBELLO, NY
(Address of principal executive offices)
10901
(Zip Code)
845-369-8040
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
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Item 2.02. Results of Operations and Financial Condition On April 25, 2011 Provident New York Bancorp (the "Company") issued a press release regarding its earnings for the second fiscal quarter ending March 31, 2011. The press release is included as Exhibit 99 to this report. The press release includes information about the Company's earnings, excluding securities gains and the fair value adjustment of interest rate caps. The Company presents earnings excluding these factors so that investors can better understand the results of its core banking operations and to better align with the views of the investment community. The information included in Exhibit 99 is considered to be "furnished" and shall not be deemed "filed" under the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document
Item 9.01. Financial Statements and Exhibits
(a) Financial statements:
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: April 25, 2011 |
PROVIDENT NEW YORK BANCORP
By: /s/ Paul A. Maisch |
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| Exhibit No. | Description |
| 99.1 | Press Release of PROVIDENT NEW YORK BANCORP dated April 25, 2011 |
MONTEBELLO, NY -- (Marketwire - April 25, 2011) - Provident New York Bancorp (NASDAQ: PBNY), the parent company of Provident Bank, today announced second-quarter results for the quarter ended March 31, 2011. Net income for the quarter was $3.6 million, or $0.10 per diluted share, compared to net income of $4.2 million or $0.11 per diluted share for same quarter last year and net income of $6.7 million, or $0.18 per diluted share for the linked quarter ended December 31, 2010. As described in more detail below, results in both comparative quarters were affected by securities gains to a greater extent than those in the current quarter. Net income for fiscal 2011 year-to-date was $10.3 million, or $0.27 per diluted share compared to $10.3 million or $0.27 per diluted share for year-to-date fiscal 2010.
President's Comments
George Strayton, President and CEO, commented, "Stable operating performance in a challenging environment was, once again, a hallmark of our results. We continue to believe this is a period of uncertainty regarding the direction and velocity of change in interest rates. To address that concern, over the past two years we positioned our balance sheet to have a high level of capital, high level of liquidity, and low level of interest rate risk at the expense of current operating income. This has been offset by gains realized from sales of investment securities and fee income from sales of 1-4 family loan originations. This strategy reduced net interest margin over the past nine quarters. This past quarter, however, net interest margin turned slightly upward. Although it is too early to call this a trend, it is a positive sign and possibly signals an end to margin contraction.
"This past quarter we also saw several positive credit risk indicators in our loan portfolio. Criticized/classified loans declined by $37 million as $24 million in ADC loans were upgraded to pass. We are also seeing strong payments in our ADC portfolio as closings take place on home sales. Paydowns on this portfolio totaled $32 million during the past quarter. While these indicators are positive, we are still carrying $19 million of loans (roughly half are properties secured by commercial mortgages) in the process of foreclosure, which will be on our balance sheet for some time pending sales. We also saw an uptick in nonperforming loans and net charge-offs as we continue to work through the credit cycle. We may see continued fluctuations in levels of net charge-offs and problem assets as the cycle progresses."
Key items for the quarter
-- Excluding the after tax effect of securities gains and the fair value
adjustment of interest rate caps and a supplemental retirement plan
settlement, earnings were $0.09 per diluted share. This compares to
$0.11 for the linked quarter and $0.09 for the second quarter of fiscal
2010. While we actively manage our securities portfolio as a component
of our asset/liability management, we also present earnings excluding
net securities gains and fair market value adjustments on interest rate
caps and, this quarter, we adjusted for a settlement of retirement
benefits. We believe these adjustments affords investors a better
understanding of our core banking operations, and aligns more closely
to the views of the investment community, which tends to adjust for
more variable components of income.
-- Net charge-offs of $3.0 million are up from the linked quarter and from
the same quarter last year. Charge-offs during the quarter included
loans with $952,000 previously provisioned for as of December 31,
2010. On a year-to-date basis net charge-offs were $4.9 million against
provisions of $4.2 million.
-- Special mention loans decreased $36.5 million during the quarter,
primarily due to the upgrading of approximately $24 million in ADC
loans. Substandard loans declined to $113.9 million as of
March 31, 2011.
-- Non-performing loans, a subset of substandard loans, increased to
$37.2 million over the linked quarter.
-- The Company repurchased 125,744 shares of common stock during the
quarter at a cost of $1.2 million. There are 1,025,821 shares remaining
under its repurchase authorization.
Net Interest Income and Margin
Second quarter fiscal 2011 compared with second quarter fiscal 2010
Net interest income was $22.5 million for the second quarter of fiscal 2011, a decrease of $423,000 from the same quarter of fiscal 2010 as funding costs declined at a slower pace than interest income. The net interest margin on a tax-equivalent basis was 3.68 percent for the second quarter of fiscal 2011, compared to 3.76 percent for the same period a year ago. The tax-equivalent yield on investments decreased 54 basis points and loan yields were down 19 basis points compared to the second quarter fiscal 2010. As a result, the yield on interest-earning assets declined 31 basis points. For the same period, the cost of deposits decreased 14 basis points to 0.31 percent, and the cost of borrowings decreased by 6 basis points to 3.58 percent.
Second quarter fiscal 2011 compared with linked quarter ended December 31, 2010
Net interest income for the quarter ended March 31, 2011 decreased 2.9 percent compared to the linked quarter ended December 31, 2010. The tax-equivalent net interest margin increased 2 basis points from 3.66 percent in the linked quarter. The overall yield on loans declined to 5.40 percent, as the effect of non-accrual loans was greater in the second quarter of fiscal 2011. The yield on the investment portfolio increased 9 basis points as we are now seeing replacement rates greater than our overall portfolio rate. The overall yield on earning assets declined 3 basis points. The cost of interest-bearing deposits declined 2 basis points, reflecting the already low level of deposit pricing. The cost of borrowing increased 9 basis points over the linked quarter, as the average balances on the lower yield FHLBNY overnight line were $38.4 million lower in the second quarter. Yields on long-term FHLBNY advances declined from 4.06 percent in the linked quarter to 3.85 percent.
Noninterest Income
Second quarter fiscal 2011 compared with second quarter fiscal 2010
Noninterest income totaled $5.8 million for the second quarter, a decrease of $318,000 from the second quarter of fiscal 2010. The decrease was primarily due to lower gains on sale of securities, offset in part by a lower fair value loss on interest rate caps, as other categories of noninterest income were relatively stable.
Second quarter fiscal 2011 compared with linked quarter ended December 31, 2010
Noninterest income decreased on a linked-quarter basis, mainly due to lower securities gains and a fair value gain related to interest rate caps in the linked quarter.
Noninterest Expense
Second quarter fiscal 2011 compared with second quarter fiscal 2010
Noninterest expense increased 2.9 percent when compared to the second quarter fiscal 2010. The increase is primarily due to medical benefit expense, the retirement benefit settlement charge, and occupancy expense offset in part by lower ATM/debit card expense, intangible amortization and stock-based compensation cost.
Second quarter fiscal 2011 compared with the linked quarter ended December 31, 2010
On a quarter-to-quarter basis, noninterest expense increased 2.5 percent. Increases were seen in occupancy and office operations related to the harsh winter conditions in the second quarter as well as the defined retirement settlement charge.
Income Taxes
The effective tax rate for the second quarter of fiscal 2011 was 19.1 percent compared to 22.5 percent for the same period in fiscal 2010 (lower rate in second quarter due to BOLI). On a year-to-date basis the effective tax rate was 27.1 percent for fiscal 2011 compared to 26.0 percent for 2010.
Credit Quality
Substandard loans at March 31, 2011 were $113.9 million compared to $114.7 million at December 31, 2010, and down from $131.8 million at September 30, 2010. Special mention loans were $27.0 million compared to $63.6 million at December 31, 2010 and $37.9 million at September 30, 2010. Non-performing loans were $37.2 million at March 31, 2011 compared to $36.2 million at December 31, 2010. Net charge-offs for the second fiscal quarter were $3.0 million compared to $1.9 million in the linked quarter and $2.0 million for the second quarter of fiscal 2010. Our provision was $2.1 million, decreasing our allowance for loan losses to $30.1 million, or 81 percent of non-performing loans at March 31, 2011. This compares to 86 percent at December 31, 2010 and 115 percent at September 30, 2010. Total TDRs increased by $4.9 million over the linked quarter, with virtually all of the increase due to one relationship that is accruing and performing.
Key Balance Sheet Changes
-- The balance sheet was $102 million, or 3.4 percent, smaller at
March 31, 2010 compared to September 30, 2010, with reductions in most
major categories.
-- Period-end total deposits decreased $52.8 million compared to year end
September 30, 2010, due to the rolling off of municipal tax deposits.
On a linked quarter basis deposits are up 7.3 percent excluding
wholesale deposits. We continue to see an overall increase in average
transaction accounts, up over 2.3 percent from the linked quarter and
over 12.3 percent from September 30, 2010.
-- Total loan originations during second quarter fiscal 2011 were
$117.4 million, an increase of 9 percent over the second quarter of
fiscal 2010. Commercial loan balances increased by $18 million over
September 30, 2010 levels, despite a reduction of $26.0 million in ADC
loans due to payments of $61 million. Residential 1-4 family mortgages
declined over the same period by $23.9 million as the Bank sold $43.7
million in the secondary market.
-- Securities decreased $73.6 million to $861.2 million over September
30, 2010 levels, as $48 million in securities were called during the
quarter. The Company partially invested cash generated by deposit
inflows into medium term securities, with durations between two and
five years. In addition, declines in market values totaled
$26.6 million compared to September 30, 2010 as US Treasury interest
rates in the five to ten year maturity range have increased
approximately 101 to 96 basis points over September 2010.
-- Borrowings decreased over September 30, 2010 levels by $35.8 million.
Included are $89.1 million of FHLBNY advances that have been
restructured and will continue to reduce interest expense by $945,000
on an annual basis from the December quarter level, assuming no
increase in interest rates. The Company supplemented its borrowings at
March 31, 2011 with $43.4 million in wholesale deposits at a weighted
average rate of 0.71 percent.
Capital and Liquidity
Growth in core deposits has provided ample liquidity to maintain available for sale securities (gross of unrealized loss). Provident Bank remained well-capitalized at March 31, 2011 with the Bank's Tier 1 leverage ratio at 9.10 percent. The Company's tangible capital as a percent of tangible assets increased 11 basis points from September 30, 2010 levels to 9.31 percent as of March 31, 2011, while tangible book value per share declined to $6.74 from $6.96 at September 30, 2010. Total capital decreased $10.7 million from September 30, 2010, to $420.3 million at March 31, 2011, due to a net increase of $5.9 million in the Company's retained earnings, an increase of $0.6 million due to stock based compensation items, a $1.9 million increase in treasury stock and a $15.2 million decrease in accumulated other comprehensive income. The Company continued its share repurchase program repurchasing 125,744 shares at a cost of $1.2 million during the second fiscal quarter.
Other Information
The Company made an in-service lump sum distribution under its non-qualified supplemental retirement plan and recorded a settlement charge of approximately $300,000. On April 1, 2011 the Company made a similar distribution under its qualified defined benefit pension plan and expects to record an additional settlement expense of approximately $500,000 in the third quarter. A preliminary analysis performed by the Company has shown reduced FDIC regulatory assessments of approximately $1.0 million per annum associated with the change in assessment base scheduled to take effect with the April 1, 2011 assessment period.
About Provident New York Bancorp
Headquartered in Montebello, New York, Provident New York Bancorp is the parent company of Provident Bank, an independent full-service community bank. Provident Bank operates 35 branches that serve the Hudson Valley region. The Bank offers a complete line of commercial, retail and investment management services. For more information, visit the Company's web site at www.providentbanking.com.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK FACTORS
In addition to historical information, this earnings release may contain forward-looking statements for purposes of applicable securities laws. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are subject to numerous assumptions, risks and uncertainties. There are a number of important factors described in documents previously filed by the Company with the Securities and Exchange Commission, and other factors that could cause the Company's actual results to differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
Financial information contained in this release should be considered to be an estimate pending the filing of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 with the Securities and Exchange Commission. While the Company is not aware of any need to revise the results disclosed in this release, accounting literature may require adverse 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.
Reconciliation of Adjusted Earnings:
Quarter Ended Six Months Ended
March 31, December 31, March 31,
2011 2010 2010 2011 2010
-------- -------- -------- -------- --------
Net Income
Net Income $ 3,573 $ 4,167 $ 6,720 $ 10,293 $ 10,333
Securities gains(1) (444) (1,119) (2,496) (2,940) (2,537)
Defined benefit
settlement charge(1) 165 - - 165 -
Fair value (gain) loss
on interest rate caps(1) 1 366 (139) (138) 140
-------- -------- -------- -------- --------
Net adjusted income $ 3,295 $ 3,414 $ 4,085 $ 7,380 $ 7,936
======== ======== ======== ======== ========
Earnings per common share
Diluted Earnings per
common share $ 0.10 $ 0.11 $ 0.18 $ 0.27 $ 0.27
Securities gains(1) (0.01) (0.03) (0.07) (0.08) (0.07)
Defined benefit
settlement charge(1) - - - - -
Fair value loss on
interest rate caps(1) - 0.01 - - -
-------- -------- -------- -------- --------
Diluted adjusted earnings
per common share $ 0.09 $ 0.09 $ 0.11 $ 0.20* $ 0.21*
======== ======== ======== ======== ========
Non-interest income
Total non-interest income $ 5,795 $ 6,113 $ 9,883 $ 15,678 $ 14,206
Securities gains (748) (1,884) (4,202) (4,950) (4,272)
Fair value (gain) loss on
interest rate caps 2 616 (234) (232) 236
-------- -------- -------- -------- --------
Adjusted non
interest-income $ 5,049 $ 4,845 $ 5,447 $ 10,496 $ 10,170
======== ======== ======== ======== ========
Non-interest expense
Total non-interest
expense $ 21,791 $ 21,173 $ 21,269 $ 43,060 $ 41,067
Defined benefit
settlement charge (278) - - (278) -
-------- -------- -------- -------- --------
Adjusted non
interest-expense $ 21,513 $ 21,173 $ 21,269 $ 42,782 $ 41,067
======== ======== ======== ======== ========
(1) After marginal tax effect 40.61%
* Rounding
Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share and per share data)
March 31, September 30,
2011 2010
------------ ------------
Assets:
Cash and due from banks $ 72,670 $ 90,872
Total securities 861,233 934,860
Loans held for sale - 5,890
Loans:(1)
One- to four-family residential mortgage
loans 411,014 434,899
Commercial real estate, commercial business 841,129 797,160
Acquisition, development and construction
loans 205,293 231,258
Consumer loans 227,391 238,224
------------ ------------
Total loans, gross 1,684,827 1,701,541
Allowance for loan losses (30,130) (30,843)
------------ ------------
Total loans, net 1,654,697 1,670,698
Federal Home Loan Bank stock, at cost 18,179 19,572
Premises and equipment, net 42,830 43,598
Goodwill 160,861 160,861
Other amortizable intangibles 2,857 3,640
Bank owned life insurance 51,985 50,938
Other assets 53,979 40,096
------------ ------------
Total assets $ 2,919,291 $ 3,021,025
============ ============
Liabilities:
Deposits
Retail $ 174,286 $ 174,731
Commercial 273,876 277,217
Municipal 15,641 77,909
Personal NOW deposits 153,388 139,517
Business NOW deposits 34,870 34,105
Municipal NOW deposits 122,153 241,995
------------ ------------
Total transaction accounts 774,214 945,474
Savings 420,775 392,321
Money market deposits 546,173 427,334
Certificates of deposit 348,742 377,573
------------ ------------
Total deposits 2,089,904 2,142,702
Borrowings 327,943 363,751
Borrowings Senior Note 51,498 51,496
Mortgage escrow funds and other liabilities 29,677 32,121
------------ ------------
Total liabilities 2,499,022 2,590,070
Stockholders' equity 420,269 430,955
------------ ------------
Total liabilities and stockholders'
equity $ 2,919,291 $ 3,021,025
============ ============
Shares of common stock outstanding at period
end 38,072,942 38,262,288
Book value per share $ 11.04 $ 11.26
(1) Certain amounts from prior periods have been reclassed to conform to
current fiscal year presentation
Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited, in thousands, except share and per share data)
Quarter Quarter
Ended Ended Six Months Ended
March 31, December 31, March 31,
2011 2010 2010 2011 2010
---------- ---------- ----------- ----------- ----------
Interest and
dividend income:
Loans and loan
fees 22,039 $ 22,655 $ 23,205 $ 45,244 $ 46,055
Securities
taxable 3,531 4,724 3,530 7,061 9,476
Securities
non-taxable 1,901 1,901 1,925 3,826 3,796
Other earning
assets 332 347 400 732 718
---------- ---------- ----------- ----------- ----------
27,803 29,627 29,060 56,863 60,045
Interest expense:
Deposits 1,585 2,201 1,642 3,227 4,991
Borrowings 3,707 4,492 4,234 7,941 9,234
---------- ---------- ----------- ----------- ----------
Total interest
expense 5,292 6,693 5,876 11,168 14,225
---------- ---------- ----------- ----------- ----------
Net interest
income 22,511 22,934 23,184 45,695 45,820
Provision for
loan losses 2,100 2,500 2,100 4,200 5,000
---------- ---------- ----------- ----------- ----------
Net interest
income after
provision for
loan losses 20,411 20,434 21,084 41,495 40,820
Non-interest income:
Deposit fees
and service
charges $ 2,643 $ 2,744 $ 2,767 $ 5,410 $ 5,737
Net gain on
sales of
securities 748 1,884 4,202 4,950 4,272
Title insurance
fees 274 237 363 637 548
Bank owned
life insurance 553 496 494 1,047 1,050
Gain (loss) on
sale of
premises and
equipment - (10) - - (54)
Gain on sale
of loans 310 117 542 852 400
Investment
management fees 789 776 743 1,532 1,555
Fair value
gain (loss)
interest rate
caps (2) (616) 234 232 (236)
Other 480 485 538 1,018 934
---------- ---------- ----------- ----------- ----------
Total non-interest
income 5,795 6,113 9,883 15,678 14,206
Non-interest
expense:
Compensation
and benefits 11,183 10,824 11,228 22,411 21,088
Retirement benefit
settlement charge 278 - - 278 -
Stock-based
compensation
plans 296 581 279 575 1,033
Occupancy and
office
operations 3,757 3,537 3,635 7,392 6,863
Advertising
and promotion 843 794 953 1,796 1,536
Professional
fees 1,043 914 1,062 2,105 1,748
Data and check
processing 691 577 642 1,333 1,127
Amortization
of intangible
assets 371 472 412 783 965
FDIC insurance
and regulatory
assessments 919 931 768 1,687 1,715
ATM/debit card
expense 366 536 393 759 1,090
Other 2,044 2,007 1,897 3,941 3,902
---------- ---------- ----------- ----------- ----------
Total non-interest
expense 21,791 21,173 21,269 43,060 41,067
Income before
income tax
expense 4,415 5,374 9,698 14,113 13,959
Income tax
expense 842 1,207 2,978 3,820 3,626
---------- ---------- ----------- ----------- ----------
Net income $ 3,573 $ 4,167 $ 6,720 $ 10,293 $ 10,333
========== ========== =========== =========== ==========
Per common
share:
Basic
earnings $ 0.10 $ 0.11 $ 0.18 $ 0.27 $ 0.27
Diluted
earnings 0.10 0.11 0.18 0.27 0.27
Dividends
declared 0.06 0.06 0.06 0.12 0.12
Weighted
average common
shares:
Basic 37,496,395 38,188,191 37,552,245 37,524,627 38,384,180
Diluted 37,497,467 38,209,766 37,552,245 37,524,950 38,430,506
Selected Financial
Condition Data: Three Months Ended
--------------------------------------------------------
(in thousands
except share and
per share data) 03/31/11 12/31/10 09/30/10 06/30/10 03/31/10
---------- ---------- ---------- ---------- ----------
End of Period
-------------
Total assets $2,919,291 $2,940,513 $3,021,025 $2,963,706 $2,935,956
Loans, gross (1) 1,684,827 1,699,502 1,701,541 1,705,737 1,667,428
Securities
available for
sale 833,179 869,996 901,012 878,370 888,994
Securities held to
maturity 28,054 30,425 33,848 40,452 43,675
Bank owned life
insurance 51,985 51,433 50,938 50,447 49,945
Goodwill 160,861 160,861 160,861 160,861 160,861
Other amortizable
intangibles 2,857 3,229 3,640 4,072 4,524
Other non-earning
assets 96,809 94,933 83,694 85,398 87,811
Deposits 2,089,904 1,980,068 2,142,702 1,961,005 2,006,953
Borrowings 379,441 495,783 415,247 526,912 472,801
Equity 420,269 419,642 430,955 429,115 422,372
Other comprehensive
income related to
investment securities
reflected in
stockholders'
equity (3,146) (2,932) 12,621 9,953 3,970
Average Balances
----------------
Total assets $2,940,299 $2,961,458 $2,919,961 $2,928,626 $2,918,953
Loans, gross:
Real estate-
residential
mortgage 386,592 400,229 417,584 427,801 436,967
Real estate-
commercial
mortgage 619,145 606,701 570,023 552,888 539,679
Real estate-
Acquisition,
Development &
Construction 216,914 226,816 227,165 222,958 212,454
Commercial and
industrial 229,632 236,390 243,691 236,275 234,356
Consumer loans 232,712 237,106 239,908 243,484 248,134
Loans total (1) 1,684,995 1,707,242 1,698,371 1,683,406 1,671,590
Securities
(taxable) 684,834 692,346 655,794 693,554 694,815
Securities
(non-taxable) 214,634 221,802 222,024 219,121 203,153
Total earning
assets 2,594,131 2,628,815 2,578,024 2,594,264 2,581,554
Non earning assets 346,168 332,643 341,937 334,362 337,399
Non-interest
bearing checking 468,031 470,873 449,666 430,387 419,389
Interest bearing
NOW accounts 338,503 317,876 266,950 263,709 298,935
Total transaction
accounts 806,534 788,749 716,616 694,096 718,324
Savings (including
mortgage escrow
funds) 416,777 405,177 424,012 413,315 380,600
Money market
deposits 490,215 433,865 421,989 428,612 428,605
Certificates of
deposit 367,099 406,241 415,059 467,360 446,301
Total deposits and
mortgage escrow 2,080,625 2,034,032 1,977,676 2,003,383 1,973,830
Total interest
bearing deposits 1,612,594 1,563,159 1,528,010 1,572,996 1,554,441
Borrowings 420,069 481,939 486,060 481,460 500,226
Equity 419,847 428,900 430,862 424,221 422,129
Selected Operating
Data:
Condensed Tax
Equivalent Income
Statement
------------------
Interest and
dividend income $ 27,803 $ 29,060 $ 29,321 $ 30,408 $ 29,627
Tax equivalent
adjustment* 1,024 1,036 1,045 1,098 1,023
Interest expense 5,292 5,876 6,005 6,210 6,693
---------- ---------- ---------- ---------- ----------
Net interest
income (tax
equivalent) 23,535 24,220 24,361 25,296 23,957
Provision for loan
losses 2,100 2,100 2,250 2,750 2,500
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision
for loan
losses 21,435 22,120 22,111 22,546 21,457
Non-interest
income 5,795 9,883 7,714 5,281 6,113
Non-interest
expense 21,791 21,269 21,362 20,741 21,173
---------- ---------- ---------- ---------- ----------
Income before
income tax
expense 5,439 10,734 8,463 7,086 6,397
Income tax expense
(tax equivalent)* 1,866 4,014 3,060 2,330 2,230
---------- ---------- ---------- ---------- ----------
Net income $ 3,573 $ 6,720 $ 5,403 $ 4,756 $ 4,167
========== ========== ========== ========== ==========
(1) Does not reflect allowance for loan losses of $30,130, $31,036,
$30,843, $31,021 and $30,444.
* Tax exempt income assumed at a 35% federal rate
Three Months Ended
----------------------------------------------------------
03/31/11 12/31/10 09/30/10 06/30/10 03/31/10
---------- ---------- ---------- ---------- ----------
Performance Ratios
(annualized)
------------------
Return on
Average Assets 0.49% 0.90% 0.73% 0.65% 0.58%
Return on
Average Equity 3.45% 6.22% 4.98% 4.50% 4.00%
Non-Interest
Income to
Average Assets 0.80% 1.32% 1.05% 0.72% 0.85%
Non-Interest
Expense to
Average Assets 3.01% 2.85% 2.90% 2.84% 2.94%
Operating
Efficiency
Adjusted (2) 73.41% 70.59% 71.09% 66.91% 71.73%
Analysis of Net
Interest
Income
---------------
Yield on Loans 5.40% 5.47% 5.48% 5.68% 5.59%
Yield on
Investment
Securities-
Tax Equivalent 2.91% 2.82% 3.16% 3.45% 3.45%
Yield on
Earning
Assets- Tax
Equivalent 4.51% 4.54% 4.67% 4.87% 4.82%
Cost of
Interest
Bearing
Deposits 0.40% 0.42% 0.44% 0.47% 0.57%
Cost of
Borrowings 3.58% 3.49% 3.53% 3.63% 3.64%
Cost of
Interest
Bearing
Liabilities 1.06% 1.14% 1.18% 1.21% 1.32%
Net Interest
Rate Spread-
Tax Equivalent
Basis 3.45% 3.40% 3.49% 3.66% 3.49%
Net Interest
Margin- Tax
Equivalent
Basis 3.68% 3.66% 3.75% 3.91% 3.76%
Capital
Information
Data
---------------
Tier 1 Leverage
Ratio- Bank
Only 9.10% 8.89% 8.43% 8.75% 8.62%
Tier 1
Risk-Based
Capital- Bank
Only 251,338 247,503 240,230 244,299 239,050
Total
Risk-Based
Capital- Bank
Only 276,345 272,071 265,148 268,996 263,264
Tangible
Capital
Consolidated (3) 256,551 255,552 266,454 264,182 256,987
Tangible
Capital as a %
of Tangible
Assets
Consolidated (3) 9.31% 9.20% 9.33% 9.44% 9.28%
Shares
Outstanding 38,072,942 38,198,686 38,262,288 38,628,477 38,861,477
Shares
Repurchased
during
qrtr (open
market) 125,744 82,602 364,000 233,000 316,723
Basic weighted
common shares
outstanding 37,496,395 37,552,245 37,793,860 38,086,535 38,188,191
Diluted common
shares
outstanding 37,497,467 37,552,245 37,793,860 38,086,579 38,209,766
Basic Earnings
per common
share $ 0.10 $ 0.18 $ 0.14 $ 0.12 $ 0.11
Diluted
Earnings per
common share 0.10 0.18 0.14 0.12 0.11
Dividends Paid
per common
share 0.06 0.06 0.06 0.06 0.06
Book Value per
common share 11.04 10.99 11.26 11.11 10.87
Tangible Book
Value per
common share
(3) 6.74 6.69 6.96 6.84 6.61
Asset Quality
Measurements
--------------
Non-performing
loans (NPLs):
non-accrual $ 29,765 $ 30,690 $ 21,413 $ 21,985 $ 21,210
Non-performing
loans (NPLs):
still accruing 7,412 5,536 5,427 7,069 6,464
Other Real
Estate Owned 5,351 3,585 3,891 3,302 2,466
Non-performing
assets (NPAs) 42,528 39,811 30,731 32,356 30,140
Troubled Debt
Restructures
still accruing 21,954 17,581 16,047 414 416
Net Charge-offs 3,006 1,907 2,428 2,173 2,023
Net Charge-offs
as % of
average loans
(annualized) 0.71% 0.45% 0.57% 0.52% 0.48%
NPLs as % of
total loans 2.21% 2.13% 1.58% 1.70% 1.66%
NPAs as % of
total assets 1.46% 1.35% 1.02% 1.09% 1.03%
Allowance for
loan losses as
% of NPLs 81% 86% 115% 107% 110%
Allowance for
loan losses as
% of total
loans 1.79% 1.83% 1.81% 1.82% 1.83%
---------- ---------- ---------- ---------- ----------
(2) The 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 efficiency ratio is typically expressed on a
tax-equivalent basis. Moreover, most institutions, in calculating the
efficiency ratio, also adjust both noninterest expense and noninterest
income to exclude from these items (as calculated under generally
accepted accounting principles) 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:
03/31/11 12/31/10 09/30/10 06/30/10 03/31/10
---------- ---------- ---------- ---------- ----------
Total Assets $2,919,291 $2,940,513 $3,021,025 $2,963,706 $2,935,956
Goodwill and
other
amortizable
intangibles (163,718) (164,090) (164,501) (164,933) (165,385)
---------- ---------- ---------- ---------- ----------
Tangible Assets $2,755,573 $2,776,423 $2,856,524 $2,798,773 $2,770,571
---------- ---------- ---------- ---------- ----------
Stockholders'
equity 420,269 419,642 430,955 429,115 422,372
Goodwill and
other
amortizable
intangibles (163,718) (164,090) (164,501) (164,933) (165,385)
---------- ---------- ---------- ---------- ----------
Tangible
Stockholders'
equity $ 256,551 $ 255,552 $ 266,454 $ 264,182 $ 256,987
---------- ---------- ---------- ---------- ----------
Outstanding
Shares 38,072,942 38,198,686 38,262,288 38,628,477 38,861,477
Tangible
capital as a %
of tangible
assets
(consolidated) 9.31% 9.20% 9.33% 9.44% 9.28%
Tangible book
value per
share $ 6.74 $ 6.69 $ 6.96 $ 6.84 $ 6.61
PROVIDENT BANK CONTACT: Paul A. Maisch EVP & Chief Financial Officer Miranda Grimm FVP & Controller 845.369.8040