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: October 31, 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 October 31, 2011 Provident New York Bancorp (the "Company") issued a press release regarding its earnings for the fourth fiscal quarter and fiscal year ending September 30, 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: October 31, 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 October 31, 2011 |
MONTEBELLO, NY -- (Marketwire - October 31, 2011) - Provident New York Bancorp (NASDAQ: PBNY), the parent company of Provident Bank, today announced fourth-quarter and fiscal year results for the period ended September 30, 2011. Net loss for the quarter was $493,000, or $(0.01) per diluted share, compared to net income of $5.4 million, or $0.14 per diluted share for same quarter last year and net income of $1.9 million, or $0.05 per diluted share for the linked quarter ended June 30, 2011. Net income for fiscal 2011 year-to-date was $11.7 million, or $0.31 per diluted share compared to $20.5 million or $0.54 per diluted share for year-to-date fiscal 2010. As described in more detail below gains on sales of securities and net charge-offs on loans affected results in the current quarter to a greater extent than comparative quarters and in the linked quarter (discussed in more detail in the credit quality section of this release).
President's Comments
Jack Kopnisky, President and CEO, commented, "We have substantially completed a comprehensive review of operations and opportunities at Provident, and new strategies designed to drive growth in revenues and earnings have been implemented. Achieving these longer-range goals comes at a current cost, however, including fourth quarter charges of $2.1 million associated with the relocation of two branches and $1.1 million of severance expense associated with workforce realignment. Credit costs also impacted the quarter. We charged off $6.7 million on two ADC relationships and $1.2 million as we sold a $2.5 million pool of non-performing residential mortgages. I am encouraged by our commercial loan originations, which were $147.3 million for the fourth quarter, up $21.8 million over the linked quarter. The commercial loan approved pipeline is up 31 percent over the linked quarter and up 111 percent over the same quarter of the previous year. During the quarter we opened two new commercial banking centers in Bergen County, New Jersey, as part of our revenue enhancement strategies. These locations already have loans in our pipeline. While fiscal 2011 was challenging on many fronts, we have taken necessary steps to position the Company for growth as well as risk mitigation in the upcoming fiscal year."
As a reminder, Provident New York Bancorp will host a conference call on October 31, 2011, at 11:00 AM EDT to discuss the Company's fourth quarter results. Interested parties are invited to listen in by dialing 1-866-551-3680 and entering PIN number 88613469#. Accompanying slides will be available on the Company's website.
Key items for the quarter
Net Interest Income and Margin
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Net interest income was $22.8 million for the fourth quarter of fiscal 2011, a decrease of $525,000 from the same quarter of fiscal 2010 as funding costs declined at a slower pace than interest income. The current quarter was also negatively effected by non-performing loans net of prepayment fees, reducing interest income on loans by $630,000 in the fourth quarter of 2011 and $68,000 in the fourth quarter of 2010. The tax-equivalent yield on investments decreased 35 basis points and loan yields were down 26 basis points compared to the fourth quarter fiscal 2010. As a result, the yield on interest-earning assets declined 34 basis points. For the same period, the cost of deposits decreased 8 basis points to 0.26 percent, and the cost of borrowings increased by 16 basis points to 3.69 percent. The resulting net interest margin on a tax-equivalent basis was 3.58 percent for the fourth quarter of fiscal 2011, compared to 3.75 percent for the same period a year ago.
Fourth quarter fiscal 2011 compared with linked quarter ended June 30, 2011
Net interest income for the quarter ended September 30, 2011 remained relatively unchanged compared to the linked quarter ended June 30, 2011. The tax-equivalent net interest margin decreased 12 basis points from 3.70 percent in the linked quarter. The overall yield on loans decreased 19 basis point to 5.22 percent. The current quarter was negatively effected by non-performing loans net of prepayment fees to a greater extent than the linked quarter, $630,000 and $65,000 respectively. The yield on the investment portfolio decreased 6 basis points. Further, the cash balance increase at the federal reserve from municipal deposit collection depressed net interest margin by a further 2 basis points. The overall yield on earning assets decreased 17 basis points to 4.33 percent. The cost of deposits declined 3 basis points, reflecting the already low level of deposit pricing. The average cost of borrowing increased 2 basis points as a result of a change in the mix of short and long term advances.
Fiscal 2011 compared with fiscal 2010
Net interest income for fiscal 2011 was $91.3 million a decrease of $2.0 million over 2010 levels.
The net interest margin on a tax-equivalent basis was 3.65 percent for fiscal 2011, compared to 3.78 percent for 2010. The decrease was due to a decline in investment portfolio yields of 58 basis points and loan yields of 22 basis points offset in part by lower cost of deposits (14 basis points) and borrowings (7 basis points).
Noninterest Income
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Noninterest income totaled $9.1 million for the fourth quarter, an increase of $1.3 million over the fourth quarter of fiscal 2010. Higher gains on sales of securities of $4.5 million compared to $2.9 million as well as a lower fair value loss on interest rate caps of $170,000 were offset in part by an other than temporary impairment on investments securities of $251,000.
Fourth quarter fiscal 2011 compared with linked quarter ended June 30, 2011
Noninterest income increased $3.9 million on a linked quarter basis, mainly due to higher gains on the sale of securities of $4.5 million compared $542,000 for the linked quarter.
Fiscal 2011 compared with fiscal 2010
Non-interest income increased by $2.8 million for fiscal 2011 as compared to 2010. Increases were seen in gains on securities sales and loans of $1.9 million and $160,000, respectively, as well as a lower loss on fair value of interest rate caps of $909,000 offset in part by declines in deposit fees of $417,000.
Noninterest Expense
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Noninterest expense increased $3.0 million, when compared to the fourth quarter fiscal 2010. The increase is primarily due to charges of $3.2 million related to branch relocations and employee severances. In addition, increased expenses associated with foreclosed property were offset in part by lower incentive compensation and regulatory fees from FDIC insurance.
Fourth quarter fiscal 2011 compared with the linked quarter ended June 30, 2011
On a linked quarter basis, noninterest expense increased $1.7 million. Increases were due to the aforementioned restructuring charge offset in part by costs associated with the transition in CEO in the prior quarter.
Fiscal 2011 compared with fiscal 2010
Non interest expense increased $6.9 million in fiscal 2011 over 2010. Expenses associated with defined benefit settlement, restructuring charges, transition in CEO, a full year of operations in Nyack and Yonkers, and additional REO expense were offset in part by declines in intangible amortization and FDIC assessments.
Income Taxes
The Company recorded an income tax credit for the fourth quarter of $826,000 compared to an effective tax rate of 27 percent for the same period in fiscal 2010 (increased effect of BOLI income and tax-exempt municipal security interest relative to pre-tax income). On a year-to-date basis the effective tax rate was 19 percent for fiscal 2011 and 25 percent for 2010.
Credit Quality
Nonperforming loans decreased to $40.6 million at September 30, 2011 from $48.1 million at June 30, 2011, as the Company executed a sale of non-performing residential mortgages as well as charging off of non-performing loans in the quarter. Net charge offs for the quarter ended September 30, 2011 were $10.3 million compared to $4.3 million for the linked quarter and $2.4 million for the quarter ended September 30, 2010. The increase was caused primarily by an additional $5.5 million charge related to one ADC relationship due to lack of sales and the related drop in appraised value for which we had previously charged off $2.0 million in the third quarter. Our provision was $8.8 million for the current quarter, resulting in an allowance for loan losses of $27.9 million, or 69 percent of non-performing loans at September 30, 2011. This compares to 61 percent at June 30, 2011 and 115 percent at September 30, 2010. Substandard loans at September 30, 2011 were $94.0 million, down from $103.8 million at June 30, 2011, and $132.1 million at September 30, 2010. Special mention loans were $23.0 million compared to $24.1 million at June 30, 2011 and $37.9 million at September 30, 2010.
Key Balance Sheet Changes
Capital and Liquidity
Provident Bank remained well-capitalized at September 30, 2011 with the Bank's Tier 1 leverage ratio at 8.14 percent. The Company's tangible capital as a percent of tangible assets decreased 43 basis points from June 30, 2011 levels to 8.94 percent at September 30, 2011, while tangible book value per share increased to $7.02 from $6.93 at June 30, 2011 (a reconciliation of these Non-GAAP equity ratios are included with the ratios listed on the last page). Total capital increased $2.1 million from June 30, 2011, to $431.1 million at September 30, 2011, due to a net decrease of $2.9 million in the Company's retained earnings, a $870,000 increase in treasury stock, a decrease of $45,000 due to stock based compensation items, offset by a $5.9 million improvement in accumulated other comprehensive income. The Company repurchased 183,000 shares in the open market during the fourth fiscal quarter. The remaining authorization for share repurchases is 776,713 shares.
Other Information
The Company holds four private label mortgage backed securities with an amortized cost of $5.4 million and an estimated fair value of $4.9 million. One security included within these amounts has a carrying value of $1.7 million after recording an other than temporary impairment charge of $75,000. The amortized cost of this security is $1.9 million. Additionally, at September 30, 2011 an equity security was held with a carrying amount of $837,000 after recording an impairment charge of $203,000 due to other than temporary impairment being recognized. It is not likely that the Company will be required to sell these two securities prior to recovery of its amortized cost basis less any applicable current-period credit loss.
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 36 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 completion of the annual audit of the Company's financial statements and the filing of its fiscal 2011 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 2011, even though the new information was received by management in fiscal 2012 subsequent to the date of this release.
Reconciliation of Non GAAP Adjusted Earnings:
Twelve Months
Quarter Ended Ended
September 30, June 30, September 30,
2011 2010 2011 2011 2010
-------- -------- -------- -------- --------
Net Income (loss)
Net Income (loss) $ (493) $ 5,403 $ 1,939 $ 11,739 $ 20,492
Securities net gains and
credit losses(1) (2,535) (1,746) (306) (5,780) (4,844)
Defined benefit
settlement charge/CEO
transition(1) - - 887 1,052 -
Restructuring charges(1)
(2) 2,243 2,243
Fair value loss on
interest rate caps(1) 101 163 154 117 657
-------- -------- -------- -------- --------
Net adjusted income
(loss) $ (684) $ 3,820 $ 2,674 $ 9,371 $ 16,305
======== ======== ======== ======== ========
Earnings per common
share
Diluted Earnings per
common share $ (0.01) $ 0.14 $ 0.05 $ 0.31 $ 0.54
Securities net gains and
credit losses(1) (0.07) (0.05) (0.01) (0.15) (0.13)
Defined benefit
settlement charge/CEO
transition (1) - - 0.02 0.03 -
Restructuring charges(1)
(2) 0.06 - 0.06 -
Fair value loss on
interest rate caps(1) - - - - 0.02
-------- -------- -------- -------- --------
Diluted adjusted
earnings per common
share $ (0.02) $ 0.10 * $ 0.07 * $ 0.25 $ 0.43
======== ======== ======== ======== ========
Non-interest income
Total non-interest
income $ 9,056 $ 7,714 $ 5,217 $ 29,951 $ 27,201
Securities net gains and
credit losses (4,268) (2,940) (515) (9,733) (8,157)
Fair value loss on
interest rate caps 170 275 259 197 1,106
-------- -------- -------- -------- --------
Adjusted non interest-
income $ 4,958 $ 5,049 $ 4,961 $ 20,415 $ 20,150
======== ======== ======== ======== ========
Non-interest expense
Total non-interest
expense $ 24,382 $ 21,362 $ 22,669 $ 90,111 $ 83,170
Restructuring charges (3,201) - - (3,201) -
Defined benefit
settlement charge/CEO
transaition1 - - (1,494) (1,772) -
-------- -------- -------- -------- --------
Adjusted non interest-
expense $ 21,181 $ 21,362 $ 21,175 $ 85,138 $ 83,170
======== ======== ======== ======== ========
(1)After marginal tax effect 40.61%
*Rounding
(2)A valuation allowance for $342,000 was established for capital losses
related to certain asset write-offs
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,
2011 2010 2011
------------- ------------- -------------
Assets:
Cash and due from banks $ 281,512 $ 90,872 $ 45,530
Total securities 849,884 934,860 945,230
Loans held for sale 4,176 5,890 -
Loans:(1)
One- to four-family
residential mortgage loans 389,765 434,900 402,072
Commercial real estate,
commercial business 913,279 797,159 863,370
Acquisition, development and
construction loans 175,931 231,258 193,312
Consumer loans 224,824 238,224 226,518
------------- ------------- -------------
Total loans, gross 1,703,799 1,701,541 1,685,272
Allowance for loan losses (27,917) (30,843) (29,385)
------------- ------------- -------------
Total loans, net 1,675,882 1,670,698 1,655,887
Federal Home Loan Bank stock,
at cost 17,584 19,572 18,807
Premises and equipment, net 40,886 43,598 42,249
Goodwill 160,861 160,861 160,861
Other amortizable intangibles 4,629 3,640 4,967
Bank owned life insurance 56,967 50,938 56,454
Other assets 45,021 40,096 46,072
------------- ------------- -------------
Total assets $ 3,137,402 $ 3,021,025 $ 2,976,057
============= ============= =============
Liabilities:
Deposits
Retail $ 194,299 $ 174,731 $ 174,652
Commercial 296,505 277,217 279,659
Municipal 160,422 77,909 15,559
Personal NOW deposits 164,637 139,517 155,141
Business NOW deposits 37,092 34,105 29,892
Municipal NOW deposits 200,773 241,995 113,876
------------- ------------- -------------
Total transaction
accounts 1,053,728 945,474 768,779
Savings 429,825 392,321 428,120
Money market deposits 509,483 427,334 512,478
Certificates of deposit 303,659 377,573 388,696
------------- ------------- -------------
Total deposits 2,296,695 2,142,702 2,098,073
Borrowings 323,522 363,751 350,333
Borrowings Senior Note 51,499 51,496 51,498
Mortgage escrow funds and
other liabilities 34,552 32,121 47,116
------------- ------------- -------------
Total liabilities 2,706,268 2,590,070 2,547,020
Stockholders' equity 431,134 430,955 429,037
------------- ------------- -------------
Total liabilities and
stockholders' equity $ 3,137,402 $ 3,021,025 $ 2,976,057
============= ============= =============
Shares of common stock
outstanding at period end 37,864,008 38,262,288 38,005,866
Book value per share $ 11.39 $ 11.26 $ 11.29
(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 (LOSS)
(unaudited, in thousands, except share and per share data)
Quarter
Quarter Ended Ended Twelve Months Ended
September 30, June 30, September 30,
2011 2010 2011 2011 2010
----------- ----------- ----------- ----------- -----------
Interest
and
dividend
income:
Loans and
loan fees $ 21,995 $ 23,094 $ 22,261 $ 89,500 $ 92,542
Securities
taxable 3,825 4,016 3,607 14,493 18,208
Securities
non-
taxable 1,786 1,941 1,829 7,441 7,774
Other
earning
assets 211 270 237 1,180 1,250
----------- ----------- ----------- ----------- -----------
27,817 29,321 27,934 112,614 119,774
Interest
expense:
Deposits 1,384 1,677 1,493 6,104 8,517
Borrowings 3,642 4,328 3,637 15,220 17,923
----------- ----------- ----------- ----------- -----------
Total
interest
expense 5,026 6,005 5,130 21,324 26,440
----------- ----------- ----------- ----------- -----------
Net interest
income 22,791 23,316 22,804 91,290 93,334
Provision
for loan
losses 8,784 2,250 3,600 16,584 10,000
----------- ----------- ----------- ----------- -----------
Net interest
income
after
provision
for loan
losses 14,007 21,066 19,204 74,706 83,334
Non-
interest
income:
Deposit
fees and
service
charges $ 2,727 $ 2,695 $ 2,674 $ 10,811 $ 11,228
Net gain
on sales
of
securities 4,519 2,940 542 10,011 8,157
Other than
temporary
loss on
securities (251) - (27) (278) -
Title
insurance
fees 275 273 312 1,224 1,157
Bank owned
life
insurance 514 491 488 2,049 2,044
Gain on
sale of
loans 166 422 9 1,027 867
Investment
management
fees 733 759 815 3,080 3,070
Fair value
loss on
interest
rate caps (170) (275) (259) (197) (1,106)
Other 543 409 663 2,224 1,784
----------- ----------- ----------- ----------- -----------
Total non-
interest
income 9,056 7,714 5,217 29,951 27,201
Non-
interest
expense:
Compensation
and
benefits 10,129 11,440 11,122 43,662 43,589
Defined
benefit
settlement
charge/CEO
transition - - 1,494 1,772 -
Restructuring
charge
(severance/
branch
relocation) 3,201 - - 3,201 -
Stock-
based
compensation
plans 303 338 284 1,162 1,543
Occupancy
and
office
operations 3,693 3,403 3,423 14,508 13,434
Advertising
and
promotion 677 675 855 3,328 3,252
Professional
fees 1,147 1,208 1,137 4,389 4,019
Data and
check
processing 718 587 712 2,763 2,285
Amortization
of intangible
assets 338 432 305 1,426 1,849
FDIC
insurance
and
regulatory
assessments 636 1,033 587 2,910 3,675
ATM/debit
card
expense 425 347 400 1,584 1,601
Foreclosed
property
expense 677 21 461 1,171 137
Other 2,438 1,878 1,889 8,235 7,786
----------- ----------- ----------- ----------- -----------
Total non-
interest
expense 24,382 21,362 22,669 90,111 83,170
Income
(Loss)
before
income tax
expense (1,319) 7,418 1,752 14,546 27,365
Income tax
(benefit)
expense (826) 2,015 (187) 2,807 6,873
----------- ----------- ----------- ----------- -----------
Net income $ (493) $ 5,403 $ 1,939 $ 11,739 $ 20,492
=========== =========== =========== =========== ===========
Per common
share:
Basic
(loss)
earnings $ (0.01) $ 0.14 $ 0.05 $ 0.31 $ 0.54
Diluted
(loss)
earnings (0.01) 0.14 0.05 0.31 0.54
Dividends
declared 0.06 0.06 0.06 0.24 0.24
Weighted
average
common
shares:
Basic 37,332,121 37,793,860 37,368,391 37,452,596 38,161,180
Diluted 37,332,245 37,793,860 37,370,213 37,453,542 38,185,122
Selected
Financial
Condition Data: Three Months Ended
----------------------------------------------------------
(in thousands
except share and
per share data) 09/30/11 06/30/11 03/31/11 12/31/10 09/30/10
---------- ----------- ---------- ---------- ----------
End of Period
Total assets $3,137,402 $ 2,976,057 $2,919,291 $2,940,513 $3,021,025
Loans, gross (1) 1,703,799 1,685,272 1,684,827 1,699,502 1,701,541
Securities
available for
sale 739,844 919,805 833,179 869,996 901,012
Securities held
to maturity 110,040 25,425 28,054 30,425 33,848
Bank owned life
insurance 56,967 56,454 51,985 51,433 50,938
Goodwill 160,861 160,861 160,861 160,861 160,861
Other amortizable
intangibles 4,629 4,967 2,857 3,229 3,640
Other non-earning
assets 85,907 88,321 96,809 94,933 83,694
Deposits 2,296,695 2,098,073 2,089,904 1,980,068 2,142,702
Borrowings 375,021 401,831 379,441 495,783 415,247
Equity 431,134 429,037 420,269 419,642 430,955
Other
comprehensive
income related
to investment
securities
reflected in
stockholders'
equity 13,604 5,769 (3,146) (2,932) 12,621
Average Balances
Total assets $2,978,273 $ 2,915,988 $2,940,299 $2,961,458 $2,919,961
Loans, gross:
Real estate-
residential
mortgage 398,420 384,582 386,592 400,229 417,584
Real estate-
commercial
mortgage 681,165 648,371 619,145 606,701 570,023
Real estate-
Acquisition,
Development &
Construction 186,398 198,120 216,914 226,816 227,165
Commercial and
industrial 208,181 222,128 229,632 236,390 243,691
Consumer loans 226,687 228,993 232,712 237,106 239,908
Loans total (1) 1,700,851 1,682,194 1,684,995 1,707,242 1,698,371
Securities
(taxable) 717,893 688,445 684,834 692,346 655,794
Securities (non-
taxable) 208,692 208,643 214,634 221,802 222,024
Total earning
assets 2,634,941 2,580,429 2,594,131 2,628,815 2,578,024
Non earning
assets 343,332 335,559 346,168 332,643 341,937
Non-interest
bearing checking 486,504 464,197 468,031 470,873 449,666
Interest bearing
NOW accounts 309,729 296,677 338,503 317,876 266,950
Total transaction
accounts 796,233 760,874 806,534 788,749 716,616
Savings
(including
mortgage escrow
funds) 461,566 444,913 416,777 405,177 424,012
Money market
deposits 504,476 529,286 490,215 433,865 421,989
Certificates of
deposit 371,907 346,903 367,099 406,241 415,059
Total deposits
and mortgage
escrow 2,134,182 2,081,976 2,080,625 2,034,032 1,977,676
Total interest
bearing deposits 1,647,678 1,617,779 1,612,594 1,563,159 1,528,010
Borrowings 391,391 397,531 420,069 481,939 486,060
Equity 433,841 424,961 419,847 428,900 430,862
Selected
Operating Data:
Condensed Tax Equivalent
Income (Loss) Statement
Interest and
dividend income $ 27,817 $ 27,934 $ 27,803 $ 29,060 $ 29,321
Tax equivalent
adjustment* 962 985 1,024 1,036 1,045
Interest expense 5,026 5,130 5,292 5,876 6,005
---------- ----------- ---------- ---------- ----------
Net interest
income (tax
equivalent) 23,753 23,789 23,535 24,220 24,361
Provision for
loan losses 8,784 3,600 2,100 2,100 2,250
---------- ----------- ---------- ---------- ----------
Net interest
income after
provision for
loan losses 14,969 20,189 21,435 22,120 22,111
Non-interest
income 9,056 5,217 5,795 9,883 7,714
Non-interest
expense 24,382 22,669 21,791 21,269 21,362
---------- ----------- ---------- ---------- ----------
Income (loss)
before income
tax expense (357) 2,737 5,439 10,734 8,463
Income tax
expense
(tax equivalent)* 136 798 1,866 4,014 3,060
---------- ----------- ---------- ---------- ----------
Net income
(loss) $ (493) $ 1,939 $ 3,573 $ 6,720 $ 5,403
========== =========== ========== ========== ==========
(1) Does not reflect allowance for loan losses of $27,917, $29,385, $30,130,
$31,036 and $30,843.
* Tax exempt income assumed at a 35% federal rate
Three Months Ended
---------------------------------------------------------------
09/30/11 06/30/11 03/31/11 12/31/10 09/30/10
----------- ----------- ----------- ----------- -----------
Performance
Ratios
(annualized)
Return on
Average
Assets -0.07% 0.27% 0.49% 0.90% 0.73%
Return on
Average
Equity -0.45% 1.83% 3.45% 6.22% 4.98%
Non-
Interest
Income to
Average
Assets 1.21% 0.72% 0.80% 1.32% 1.05%
Non-
Interest
Expense to
Average
Assets 3.25% 3.12% 3.01% 2.85% 2.90%
Operating
Efficiency
Adjusted
(2) 68.91% 70.99% 73.56% 70.59% 71.09%
Analysis of
Net
Interest
Income
Yield on
Loans 5.22% 5.41% 5.40% 5.47% 5.48%
Yield on
Investment
Securities
- Tax
Equivalent 2.81% 2.87% 2.91% 2.82% 3.16%
Yield on
Earning
Assets-
Tax
Equivalent 4.33% 4.50% 4.51% 4.54% 4.67%
Cost of
Deposits 0.26% 0.29% 0.31% 0.32% 0.34%
Cost of
Borrowings 3.69% 3.67% 3.58% 3.49% 3.53%
Cost of
Interest
Bearing
Liabilities 0.98% 1.02% 1.06% 1.14% 1.18%
Net Interest
Rate
Spread-
Tax
Equivalent
Basis 3.35% 3.48% 3.45% 3.40% 3.49%
Net Interest
Margin-
Tax
Equivalent
Basis 3.58% 3.70% 3.68% 3.66% 3.75%
Capital
Information
Data
Tier 1
Leverage
Ratio-
Bank Only 8.14% 8.77% 9.10% 8.89% 8.43%
Tier 1
Risk-Based
Capital-
Bank Only 241,196 246,291 251,338 247,503 240,230
Total Risk-
Based
Capital-
Bank Only 265,307 271,483 276,303 272,071 265,148
Tangible
Capital
Consoli-
dated (3) 265,644 263,209 256,551 255,552 266,454
Tangible
Capital as
a % of
Tangible
Assets
Consoli-
dated (3) 8.94% 9.37% 9.31% 9.20% 9.33%
Shares
Outstanding 37,864,008 38,005,866 38,072,942 38,198,686 38,262,288
Shares
Repurchased
during
qrtr (open
market) 183,000 66,108 125,744 82,602 364,000
Basic
weighted
common
shares
outstanding 37,332,121 37,368,391 37,496,395 37,552,245 37,793,860
Diluted
common
shares
outstanding 37,332,245 37,370,213 37,497,467 37,552,245 37,793,860
Basic
(loss)
earnings
per common
share $ (0.01) $ 0.05 $ 0.10 $ 0.18 $ 0.14
Diluted
(loss)
earnings
per common
share (0.01) 0.05 0.10 0.18 0.14
Dividends
Paid per
common
share 0.06 0.06 0.06 0.06 0.06
Book Value
per common
share 11.39 11.29 11.04 10.99 11.26
Tangible
Book Value
per common
share (3) 7.02 6.93 6.74 6.69 6.96
Asset
Quality
Measurements
Non-
performing
loans
(NPLs):
non-
accrual $ 36,477 $ 42,226 $ 29,765 $ 30,690 $ 21,413
Non-
performing
loans
(NPLs):
still
accruing 4,090 5,837 7,412 5,536 5,427
Other Real
Estate
Owned 5,391 5,184 5,351 3,585 3,891
Non-
performing
assets
(NPAs) 45,958 53,247 42,528 39,811 30,731
Troubled
Debt
Restructures
still
accruing 8,736 7,447 21,954 17,581 16,047
Net Charge-
offs 10,252 4,345 3,006 1,907 2,428
Net Charge-
offs as %
of average
loans
(annualized) 2.41% 1.03% 0.71% 0.45% 0.57%
NPLs as %
of total
loans 2.38% 2.85% 2.21% 2.13% 1.58%
NPAs as %
of total
assets 1.46% 1.79% 1.46% 1.35% 1.02%
Allowance
for loan
losses as
% of NPLs 69% 61% 81% 86% 115%
Allowance
for loan
losses as
% of total
loans 1.64% 1.74% 1.79% 1.83% 1.81%
Special
mention
loans 23,026 24,099 27,050 63,588 37,901
Substandard
/ doubtful
loans 93,989 103,825 113,927 114,855 132,053
----------- ----------- ----------- ----------- -----------
(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:
09/30/11 06/30/11 03/31/11 12/31/10 09/30/10
----------- ----------- ----------- ----------- -----------
Total
Assets $ 3,137,402 $ 2,976,057 $ 2,919,291 $ 2,940,513 $ 3,021,025
Goodwill
and other
amortizable
intangibles (165,490) (165,828) (163,718) (164,090) (164,501)
----------- ----------- ----------- ----------- -----------
Tangible
Assets $ 2,971,912 $ 2,810,229 $ 2,755,573 $ 2,776,423 $ 2,856,524
----------- ----------- ----------- ----------- -----------
Stockholders'
equity 431,134 429,037 420,269 419,642 430,955
Goodwill
and other
amortizable
intangibles (165,490) (165,828) (163,718) (164,090) (164,501)
----------- ----------- ----------- ----------- -----------
Tangible
Stockholders'
equity $ 265,644 $ 263,209 $ 256,551 $ 255,552 $ 266,454
----------- ----------- ----------- ----------- -----------
Outstanding
Shares 37,864,008 38,005,866 38,072,942 38,198,686 38,262,288
Tangible
capital as
a % of
tangible
assets
(consolidated) 8.94% 9.37% 9.31% 9.20% 9.33%
Tangible
book value
per share $ 7.02 $ 6.93 $ 6.74 $ 6.69 $ 6.96
PROVIDENT BANK CONTACT: Paul A. Maisch EVP & Chief Financial Officer Miranda Grimm FVP & Controller 845.369.8040