8-K

SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  October 23, 2009PROVIDENT NEW YORK BANCORP
(Exact Name of Registrant as Specified in Charter)

Delaware	0-25233	80-0091851
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

400 Rella Boulevard, Montebello, New York	10901
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (845) 369-8040

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.        Results of Operations and Financial Condition

On October 23, 2009 Provident New York Bancorp issued a press release regarding its earnings for the fourth fiscal quarter and fiscal year ending September 30, 2009. The press release is included as Exhibit 99 to this report. 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

The Index of Exhibits immediately precedes the attached exhibits.

SIGNATURES

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.

PROVIDENT NEW YORK BANCORP
DATE:	October 23, 2009	By:	/s/ Paul A. Maisch
			Paul A. Maisch
			Executive Vice President and
			Chief Financial Officer

EXHIBIT INDEX

The following exhibits are filed as part of this report:

Exhibit No.	Description
99	Press Release of Provident New York Bancorp Dated October 23, 2009

EX-99

Exhibit 99

Provident New York Bancorp Announces Fiscal 2009 Earnings of $0.67 per Diluted Share, an Increase of 10%

MONTEBELLO, N.Y.--(BUSINESS WIRE)--October 23, 2009--Provident New York Bancorp (NASDAQ-Global Select Market: PBNY), the parent company of Provident Bank, today announced fourth-quarter results for the fiscal year ending Sept. 30, 2009. Net income for the quarter was $5.1 million, or $0.13 per diluted share, compared to net income of $6.5 million, or $0.17 per diluted share for the fourth quarter of fiscal 2008. Net income for the twelve months ended September 30, 2009 was $25.9 million, or $0.67 per diluted share, compared to $23.8 million, or $0.61 per diluted share for the same period in 2008.

President’s Comments

“While fiscal 2009 proved to be a challenging year for the banking industry as a whole, we continued to perform well under the difficult economic and real estate market conditions,” said George Strayton, President and CEO. “Although, earnings increased by 9% to $25.9 million over last year, loan charge offs for the year amounted to $10.7 million or 0.62 percent of average loans and were centered on our small business loan area which we identify as 'community business portfolio.' We continued to control expenses exclusive of an FDIC special assessment and were able to reduce the impact of faster prepayments by monetizing gains on mortgage backed securities, totaling $10.7 million after tax. These actions resulted in a gain in EPS year over year which fortified an already strong capital position. New business opportunities arose as non-bank loan originators exited the market and bank consolidations in our market led consumers to seek new banking relationships with strong stable banks. As a result, our average level of transaction and savings accounts grew $81 million and our loan portfolio excluding residential mortgages grew by $24 million. As we move forward, we are focused on reducing the amount of classified and criticized loans resulting from the business downturn and taking advantage of new business opportunities presented in the market place.”

Overview of Fiscal 2009

The past two years have been a period of contraction for the economy on a global as well as a local level. This economic slowdown has impacted our banking operations and many of our borrowers. While most of our portfolios have held their credit quality, our community business borrowers were the first to reflect the impact of this slowdown. In fiscal 2008 net charge offs in the community business sector were $3.5 million and increased to $6.9 million in fiscal 2009, primarily in the first half of the year. In fiscal 2009, our ADC portfolio began to show deterioration from the continuing contraction in the residential real estate markets. We therefore have increased the allowance for loan losses to reflect the increase in criticized and classified loans. The result is that provisions for loan losses increased from $7.2 million in fiscal 2008 to $17.6 million in fiscal 2009.

The economic decline has caused the Federal Reserve to engage in quantitative easing, as well as decreasing short term interest rates by 450 basis points in the past two fiscal years ending at an unprecedented federal funds target rate of zero to 0.25 percent. This resulted in increases in the fair values in our investment portfolio, but also increased the likelihood of significant prepayments. Management decided to monetize a portion of the appreciation and recorded $18.1 million in gains on sales of securities. The reinvestment of proceeds in shorter term securities, coupled with the impact of the general reduction in short term interest rates, resulted in a decrease in net interest margin from 3.96 percent in fiscal 2008 to 3.81 percent in fiscal 2009 and net interest income therefore declined by $1.5 million from fiscal 2008.

Additionally, conforming fixed rate residential mortgages were sold into the secondary market in 2009 netting $1.0 million in gains on sales of loans and the bank recorded $736,000 in nontaxable proceeds for a BOLI death benefit. Non-interest expense increased $4.7 million over fiscal 2008 levels due to increased levels of FDIC assessments of $3.4 million and increases in pension and medical benefit costs of $1.5 million. This resulted in net income of $25.9 million in fiscal 2009 compared to $23.8 million in fiscal 2008.

Credit Quality key items for the quarter

• Non-accrual loans increased a $1.3 million over June 30, 2009 levels to $21.9 million, but were essentially unchanged from March 31, 2009, while non-performing loans increased from $23.8 million at June 30, 2009 to $26.5 million at September 30, 2009.

• Classified loans (i.e. substandard and doubtful) increased from $44.2 million to $89.4 million during the quarter, primarily due to downgrades in the Acquisition, Development and Construction (“ADC”) portfolio. A loan that is not performing as originally planned requires a credit downgrade despite the fact that payments are still being made and interest is accruing.
• The loan-loss provision for the fourth quarter was $4.5 million, an increase of $1.0 million from the linked quarter and an increase of $2.4 million over the same quarter in fiscal 2008. The provision for the quarter was $2.0 million in excess of net charge-offs.
• Allowance for loan losses totaled $30.1 million, or 1.76 percent of loans outstanding and 114 percent of non-performing loans as of September 30, 2009.

Other Key items for the quarter include:

• Realized gains on sales of securities were $1.6 million for the three months ended September 30, 2009 compared to $10.0 million for the linked quarter ended June 30, 2009.
• Net interest margin on a fully tax-equivalent basis was 3.71 percent for the fourth quarter of fiscal 2009, compared to 3.74 percent for the linked quarter and 4.16 percent for the fourth quarter of fiscal 2008.
• Commercial transaction accounts grew $16.3 million or 7.4 percent over the linked quarter. Total transaction accounts were $844.9 million at September 30, 2009, compared to $614.3 million at June 30, 2009. Municipal tax deposits, which are included in transaction account balances, were $201 million at September 30, 2009.
• The Bank remained well capitalized at September 30, 2009, with total risk-based capital ratio of 13.83 percent and a Tier 1 leverage ratio of 8.64 percent. The Company’s tangible capital ratio as a percent of tangible assets was 9.14 percent compared to 9.55 percent at June 30, 2009.

Credit Quality:

The performance of certain sectors of our loan portfolio, specifically the credit scored Community Business and ADC portfolio, continue to reflect weak real estate conditions. However, we have seen improvement in our community business portfolio as charge offs have abated in recent quarters. There has been no appreciable deterioration in loan quality in our residential mortgage, Commercial and Industrial (“C&I”) and commercial mortgage portfolios. Non performing residential mortgages and commercial mortgages are approximately 1.0 percent of their respective total portfolios. C&I and consumer non- performing loans are both less than 0.5 percent of respective outstandings.

Net charge-offs for the year and for the quarter have been concentrated in the community business portfolio, while credit downgrades are concentrated in the ADC portfolio. Net charge-offs in the community business portfolio were $879,000 on average outstandings of $100.6 million for the fourth quarter and $6.8 million on average outstandings of $104.0 million for the year ended September 30, 2009.

We continue to experience credit downgrades in the ADC portfolio as the extended period of reduced activity has stressed the liquidity resources of many borrowers, even though many continue to make current interest payments. Largely driven by downgrades in this portfolio, substandard loans, which include all non-performing loans, grew to $89.4 million ($46.1 million is related to ADC loans) at September 30, 2009 from $44.2 million as of June 30, 2009. The greater growth in the substandard category as compared to the more modest growth in nonperforming loans is primarily caused by our downgrades in the ADC portfolio although many borrowers continue to pay interest on a current basis.

All significant loans classified substandard or special mention are reviewed for impairment, under applicable accounting and regulatory standards. Specific reserves for impairment were $3.0 million at September 30, 2008, $5.9 million at June 30, 2009 and $6.4 million at September 30, 2009. These reserves are included in the balance of the allowance for loan losses of $30.1 million at September 30, 2009.

Provident has $674,000 in addition to non accrual loans classified as Troubled Debt Restructures (“TDRs”) as of September 30, 2009.

The table below outlines non-performing loans at September 30, 2009, by category with the related weighted loan to value ratios and specific reserves against such loans:

								WLTV after
	Book				Specific			Specific
Loans with Specific Reserves	Value		WLTV*		Reserve			Reserve
ADC	$	7,124,121	83	%	$		1,353,209	65	%
Commercial mortgage		1,872,690	69				373,820	56
Residential mortgage		2,856,538	88				741,246	75
Loans with out Specific Reserves
ADC		4,207,255	86				-	86
Commercial mortgage		4,227,333	70				-	70
Residential Mortgage		5,016,366	72				-	72
Total Mortgage secured		25,304,303	79				2,468,275	71
Loans not Mortgage Secured
Loans with specific reserves		230,645					51,721
Loans without specific reserves		934,152					-
Total non-performing loans		26,469,100					2,519,996
General reserves							27,530,004
Troubled Debt Restructures		673,731
Total allowance for loan losses						$	30,050,000
ORE balance		1,712,237
Total non-performing assets	$	28,855,068

*Weighted average LTV is the gross loan value plus negative escrows (before specific reserves) divided by current appraised value of the collateral securing the loan.

The following table reflects activity in millions on our ADC portfolio for fiscal 2009:

ADC Loan Portfolio as of October 1, 2008	$	171
New Loans Advanced		37
Seasoned Loans Advanced		30
Total Advanced		67
Charge-offs		2
New Loan Payments		1
Seasoned Loan Payments		41
ADC Loan Portfolio as of September 30, 2009	$	194

Net Interest Income and Margin

Fourth quarter fiscal 2009 compared with fourth quarter fiscal 2008

Net interest income was $22.5 million for the fourth quarter of fiscal 2009, a $3.1 million decrease from the same quarter of fiscal 2008. The net interest margin on a tax-equivalent basis was 3.71 percent for the fourth quarter of fiscal 2009, compared to 4.16 percent for same period a year ago. The year-over-year comparison reflects the impact of the cuts in the federal funds target rate totaling 175 basis points. The Company executed on its planned sale program, starting in February 2009, of approximately $350 million in mortgage backed securities with a book yield of 5.15 percent and an average life of 4.1 years, which were reinvested in securities having a yield of 3.34 percent and an average life of 3.2 years. The tax-equivalent yield on investments decreased 132 basis points compared to the same quarter in 2008. As a result, the yield on interest-earning assets declined 94 basis points. For the same period, the cost of interest-bearing deposits decreased 70 basis points to 0.84 percent, and the cost of borrowings increased 45 basis points to 3.92 percent, reflecting the carry cost of term borrowings outstanding and repayment of short-term borrowings.

Fourth quarter fiscal 2009 compared with linked quarter ended June 30, 2009

Net interest income for the quarter ended September 30, 2009, decreased $263,000 from the quarter ended June 30, 2009. The tax-equivalent net interest margin decreased 3 basis points from 3.74 percent for the same period. During the quarter the Bank sold $83.3 million in securities and purchased $250.4 million. The overall yield of the investment portfolio declined 83 basis points during the fourth quarter. Further, proceeds from normal principal payments have been kept liquid at the Federal Reserve, earning 25 basis points on an average balance of $42.0 million. While this decision significantly enhanced the liquidity position of the Bank, the low yield received had an 8 basis point negative impact on the net interest margin.

Noninterest Income

Fourth quarter fiscal 2009 compared with fourth quarter fiscal 2008

Noninterest income totaled $7.8 million for the fiscal fourth quarter, an increase of $2.5 million from $5.3 million in the fourth quarter of fiscal 2008. The increase was due to gains of $1.6 million resulting from the Company’s decision to realize a portion of the recent appreciation in its securities portfolio, monetizing other comprehensive income and reducing prepayment risk. Other factors contributing to the increase were gains on the sale of $9.2 million of loans of $215,000, and $736,000 received on the payment of a death claim from Bank Owned Life Insurance during the fourth quarter. The Bank has been selling current conforming fixed rate residential mortgage loan originations in the secondary market to control interest rate risk. Fee income was relatively unchanged in the fourth quarter.

Fourth quarter fiscal 2009 compared with linked quarter ended June 30, 2009

Noninterest income decreased on a linked-quarter basis, due to high levels of securities gains realized, partially offset by a death payment received from Bank Owned Life Insurance and gains on the sales of loans.

Noninterest Expense

Fourth quarter fiscal 2009 compared with fourth quarter fiscal 2008

The Company remained focused on controlling operating expenses, and as a result, non interest expense remained relatively unchanged decreasing $140,000 when compared to the fourth quarter fiscal 2008.

Fourth quarter fiscal 2009 compared with linked quarter ended June 30, 2009

On a quarter-to-quarter basis, non-interest expense decreased due to the expenses related to FDIC special assessments recognized in the third quarter.

Income Taxes

The Company’s effective tax rate was 28.2 percent for fiscal 2009 and 29.4 percent for fiscal 2008. For the linked quarter ended June 30, 2009, the Company’s effective tax rate was 31.0 percent.

Key Balance Sheet Changes at September 30, 2009 compared to September 30, 2008

• Net loan balances decreased year over year by $35.2 million. While loan demand is softer than a year ago due to the economic slowdown, commercial loan originations during the year were $342 million. Residential originations were $76.8 million, essentially flat over 2008 levels. Fixed rate conforming residential loan sales into the secondary market totaled $44.1 million during 2009, as the Company mitigated interest rate exposure. Gross loans totaled $1.70 billion, compared to $1.73 billion compared to September 30, 2008.
• Securities increased $42.5 million to $877.2 million, as the Company repositioned its investment portfolio during 2009.
• Borrowings decreased $83.9 million to $482.1 million as the increase in deposits, at lower rates, made it beneficial to reduce borrowings.

• Commercial transaction accounts continued to grow, up $32.8 million over the prior year. Period-end total deposits increased $93.1 million from September 30, 2008. Municipal transaction account balances due to seasonal tax collections were $242 million and $201 million at September 30, 2008 and 2009 respectively. Money market accounts increased $78.1 million to $384.6 million as municipalities left additional funds on deposit that historically would have been competitively bid on a term basis as certificates of deposits.

Capital and Liquidity

Provident Bank remained well-capitalized with excellent liquidity in the fourth quarter, as it continued to build capital during fiscal 2009, with the Bank’s Tier 1 leverage ratio at 8.64 percent. The Company’s tangible capital as a percent of tangible assets increased to 9.14 percent as of September 30, 2009, while its tangible book value improved to $6.60 from $5.78 at September 30, 2008. Total capital increased $28.3 million from September 30, 2008, to $427.5 million at September 30, 2009, due to a $14.5 million increase in the Company’s retained earnings and a $12.1 million improvement in accumulated other comprehensive income, after realizing securities gains in the fiscal year of $18.1 million. The Company repurchased 86,860 common shares, at a cost of $804,000 during the quarter.

The Bank continued to focus on increasing its liquidity, and strengthening its balance sheet, which resulted in a compression in net interest margin in the quarter. As of September 30, 2009, the Bank maintained $41.3 million in cash at the Federal Reserve Bank compared to $6.7 million at September 30, 2008 for enhanced liquidity purposes. Further, the Bank has no outstanding overnight borrowings under its $200 million line of credit facility with the Federal Home Loan Bank. The Company’s high-quality available for sale investment portfolio consists primarily of securities issued by U.S. Government Sponsored Agencies and general obligations of municipalities and provides an additional source of liquidity.

Additional Information

• The sharp rise in FDIC insurance premiums during the year has added $3.4 million to the Company’s noninterest expense during fiscal 2009. The FDIC approved a new plan on May 22, 2009, which imposed a special assessment on insured banks of 5 basis points of total assets, in addition to regular insurance premiums. This special assessment is reflected fully upon the books of the Company as of September 30, 2009.
• The Company holds $364.6 million in mortgage backed securities issued by FHLMC and FNMA. It also holds private label CMO pass through securities having a fair value of $10.4 million and an amortized cost basis of $11.2 million all of which were performing at September 30, 2009.

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 33 branches that serve the Hudson Valley region and Bergen County, New Jersey. 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 2009 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 2009, even though the new information was received by management in fiscal 2010 subsequent to the date of this release.

Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share and per share data)
					September 30,			September 30,
					2009			2008
Assets:
Cash and due from banks				$	160,408		$	125,810
Total securities					877,197			834,701
Loans held for sale					1,213			189
Loans:
	One- to four-family residential mortgage loans				460,728			513,381
	Commercial real estate, commercial business				797,179			798,453
	Acquisition, development and construction loans				193,828			170,979
	Consumer loans				251,522			248,740
			Total loans, gross		1,703,257			1,731,553
	Allowance for loan losses				(30,050	)		(23,101	)
			Total loans, net		1,673,207			1,708,452
Federal Home Loan Bank stock, at cost					23,177			28,675
Premises and equipment, net					40,692			36,716
Goodwill					160,861			160,861
Other amortizable intangibles					5,489			7,674
Bank owned life insurance					49,611			47,650
Other assets					30,038			33,643
			Total assets	$	3,021,893		$	2,984,371
Liabilities:
	Deposits
		Retail		$	169,122		$	162,161
		Commercial			236,516			203,682
		Municipal			86,596			122,047
		Personal NOW deposits			127,595			115,442
		Business NOW deposits			36,972			20,881
		Municipal NOW deposits			188,074			196,581
			Total transaction accounts		844,875			820,794
		Savings			357,814			335,986
		Money market deposits			384,632			306,504
		Certificates of deposit			494,961			525,913
			Total deposits		2,082,282			1,989,197
	Borrowings				430,628			566,008
	Borrowings Senior Note				51,494			-
	Mortgage escrow funds and other				30,033			30,008
			Total liabilities		2,594,437			2,585,213
Stockholders’ equity					427,456			399,158
			Total liabilities and stockholders’ equity	$	3,021,893		$	2,984,371
Shares of common stock outstanding at period end					39,547,207			39,815,213
Book value per share				$	10.81		$	10.03

Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited, in thousands, except share and per share data)
						Quarter
		Quarter Ended				Ended		Twelve Months Ended
		September 30,				June 30,		September 30,
		2009		2008		2009			2009		2008
Interest and dividend income:
	Loans and loan fees	$	23,615	$	26,532	$	23,848	$	97,149	$	107,633
	Securities taxable		4,666		7,889		5,460		25,552		31,947
	Securities non-taxable		1,841		1,767		1,915		7,520		6,832
	Other earning assets		360		518		428		1,369		2,570
			30,482		36,706		31,651		131,590		148,982
Interest expense:
	Deposits		3,190		5,449		4,104		18,375		28,344
	Borrowings		4,829		5,720		4,821		19,345		25,298
Total interest expense			8,019		11,169		8,925		37,720		53,642
Net interest income			22,463		25,537		22,726		93,870		95,340
Provision for loan losses			4,500		2,100		3,500		17,600		7,200
Net interest income after provision for loan losses			17,963		23,437		19,226		76,270		88,140
Non-interest income:
	Deposit fees and service charges		3,137		3,246		3,083		12,393		12,429
	Net gain on sales of securities		1,630		-		10,023		18,076		983
	Title insurance fees		337		300		254		1,005		919
	Bank owned life insurance		1,248		515		502		2,755		1,832
	Gain on sale of premises and equipment		-		-		-		517		-
	Gain on sale of loans		215		-		450		961		-
	Investment management fees		747		770		622		2,576		3,012
	Other		490		475		321		1,670		1,867
Total non-interest income			7,804		5,306		15,255		39,953		21,042
Non-interest expense:
	Compensation and benefits		9,894		10,109		10,058		39,520		37,045
	Stock-based compensation plans		621		916		639		2,942		3,809
	Occupancy and office operations		3,195		3,125		3,310		12,802		12,434
	Advertising and promotion		629		710		614		3,093		3,338
	Professional fees		720		751		788		3,090		3,339
	Data and check processing		563		638		558		2,284		2,551
	Amortization of intangible assets		513		611		531		2,185		2,599
	FDIC insurance and regulatory assessments		752		234		2,305		4,257		875
	ATM/debit card expense		563		524		564		2,115		1,936
	Other		1,909		1,881		2,150		7,899		7,574
Total non-interest expense			19,359		19,499		21,517		80,187		75,500
Income before income tax expense			6,408		9,244		12,964		36,036		33,682
Income tax expense			1,332		2,749		4,014		10,175		9,904
Net income		$	5,076	$	6,495	$	8,950	$	25,861	$	23,778
Per common share:
	Basic earnings	$	0.13	$	0.17	$	0.23	$	0.67	$	0.61
	Diluted earnings		0.13		0.17		0.23		0.67		0.61
	Dividends declared		0.06		0.06		0.06		0.24		0.24
Weighted average common shares:
	Basic		38,405,947		38,589,361		38,536,716		38,537,881		38,907,372
	Diluted		38,532,411		38,893,860		38,683,135		38,705,837		39,226,641

Selected Financial Condition Data:		Three Months Ended
(in thousands except share and per share data)			09/30/09		06/30/09		03/31/09		12/31/08		09/30/08
End of Period
Total assets		$	3,021,893	$	2,824,356	$	2,954,701	$	2,921,551	$	2,984,371
Loans, gross (1)			1,703,257		1,714,429		1,735,507		1,746,605		1,731,553
Securities available for sale			832,583		689,286		739,595		795,017		791,688
Securities held to maturity			44,614		42,790		50,630		50,561		43,013
Bank owned life insurance			49,611		49,106		48,654		48,163		47,650
Goodwill			160,861		160,861		160,861		160,861		160,861
Other amortizable intangibles			5,489		6,002		6,533		7,090		8,329
Other non-earning assets			70,730		68,735		72,843		66,072		67,318
Deposits			2,082,282		1,872,983		2,008,766		1,898,142		1,989,197
Borrowings			482,122		488,228		490,139		566,519		566,008
Equity			427,456		420,775		421,406		416,998		399,158
Other comprehensive income / (loss) (SFAS 115),
reflected in stockholders' equity			9,502		1,531		6,977		6,597		(5,892	)
Average Balances
Total assets		$	2,837,511	$	2,875,999	$	2,961,719	$	2,907,948	$	2,867,613
Loans, gross:
Real estate- residential mortgage			465,472		484,276		504,406		510,386		513,016
Real estate- commercial mortgage			548,195		547,846		551,011		553,483		552,930
Real estate- Acquisition, Development & Construction			191,826		190,875		185,911		176,135		159,698
Commercial and industrial			246,590		245,375		248,047		246,913		244,537
Consumer loans			252,667		254,475		254,216		249,738		241,776
Loans total (1)			1,704,750		1,722,847		1,743,591		1,736,655		1,711,957
Securities (taxable)			576,363		520,948		623,470		647,414		629,322
Securities (non-taxable)			192,733		196,385		197,786		189,316		183,115
Total earning assets			2,511,431		2,549,237		2,632,350		2,582,405		2,535,187
Non earning assets			326,080		326,762		329,369		325,543		332,426
Non-interest bearing checking			402,643		373,252		365,971		380,021		379,679
Interest bearing NOW accounts			228,761		227,039		241,190		231,807		198,621
Total transaction accounts			631,404		600,291		607,161		611,828		578,300
Savings (including mortgage escrow funds)			386,943		378,263		352,199		347,826		371,499
Money market deposits			394,718		394,628		405,221		304,346		302,205
Certificates of deposit			494,530		575,713		646,527		595,595		539,269
Total deposits and mortgage escrow			1,907,595		1,948,895		2,011,108		1,859,595		1,791,273
Total interest bearing deposits			1,504,952		1,575,643		1,645,137		1,479,574		1,411,594
Borrowings			488,443		488,846		511,340		628,988		655,281
Equity			423,361		421,529		417,652		401,104		402,314
Selected Operating Data:
Condensed Tax Equivalent Income Statement
Interest and dividend income		$	30,482	$	31,651	$	33,586	$	35,871	$	36,706
Tax equivalent adjustment*			991		1,031		1,029		998		951
Interest expense			8,019		8,925		9,951		10,825		11,169
	Net interest income (tax equivalent)		23,454		23,757		24,664		26,044		26,488
Provision for loan losses			4,500		3,500		7,100		2,500		2,100
	Net interest income after provision for loan
	losses		18,954		20,257		17,564		23,544		24,388
Non-interest income			7,804		15,255		11,123		5,771		5,306
Non-interest expense			19,359		21,517		20,076		19,235		19,499
Income before income tax expense			7,399		13,995		8,611		10,080		10,195
Income tax expense (tax equivalent)*			2,323		5,045		3,067		3,789		3,700
	Net income	$	5,076	$	8,950	$	5,544	$	6,291	$	6,495
(1) Does not reflect allowance for loan losses of $30,050, $28,027, $26,437, $23,645 and $23,101
* Tax exempt income assumed at a 35% federal rate

		Three Months Ended
		09/30/09		06/30/09			03/31/09			12/31/08			09/30/08
Performance Ratios (annualized)
Return on Average Assets		0.71	%	1.25	%		0.76	%		0.86	%		0.90	%
Return on Average Equity		4.76	%	8.52	%		5.38	%		6.22	%		6.42	%
Non-Interest Income to Average Assets		1.09	%	2.13	%		1.52	%		0.79	%		0.74	%
Non-Interest Expense to Average Assets		2.71	%	3.00	%		2.75	%		2.62	%		2.71	%
Operating Efficiency Adjusted (2)		63.59	%	71.73	%		65.7	%		60.2	%		59.4	%
Analysis of Net Interest Income
Yield on:
Loans		5.59	%	5.64	%		5.63	%		5.98	%		6.25	%
Investment Securities- Tax Equivalent		3.87	%	4.70	%		5.17	%		5.09	%		5.19	%
Earning Assets- Tax Equivalent		4.97	%	5.14	%		5.33	%		5.66	%		5.91	%
Cost of:
Interest Bearing Deposits		0.84	%	1.04	%		1.30	%		1.56	%		1.54	%
Borrowings		3.92	%	3.96	%		3.71	%		3.17	%		3.47	%
Interest Bearing Liabilities		1.60	%	1.73	%		1.87	%		2.04	%		2.15	%
Net Interest Tax Equivalent:
Net Interest Rate Spread- Tax Equivalent Basis		3.38	%	3.41	%		3.46	%		3.63	%		3.76	%
Net Interest Margin- Tax Equivalent Basis		3.71	%	3.74	%		3.80	%		4.00	%		4.16	%
Capital Information Data
Tier 1 Leverage Ratio- Bank Only		8.64	%	9.04	%		8.49	%		8.32	%		8.01	%
Tier 1 Risk-Based Capital- Bank Only		246,339		240,392			235,902			229,395			226,053
Total Risk-Based Capital- Bank Only		270,807		264,076			259,686			253,040			249,154
Tangible Capital Consolidated		261,106		253,912			254,012			249,047			229,968
Tangible Capital as a % of Tangible
Assets Consolidated		9.14	%	9.55	%		9.11	%		9.04	%		8.17	%
Shares Outstanding		39,547,207		39,613,454			39,876,754			39,832,857			39,815,213
Shares Repurchased during qrtr(open market)		86,860		315,650			-			13,301			34,122
Basic weighted common shares outstanding		38,405,947		38,536,716			38,627,212			38,583,580			38,589,361
Diluted common shares outstanding		38,532,411		38,683,135			38,811,114			38,818,569			38,893,860
Per Common Share:
Basic Earnings	$	0.13		0.23		$	0.14		$	0.16		$	0.17
Diluted Earnings		0.13		0.23			0.14			0.16			0.17
Dividends Paid		0.06		0.06			0.06			0.06			0.06
Book Value		10.81		10.62			10.57			10.47			10.03
Tangible Book Value		6.60		6.41			6.37			6.25			5.78
Asset Quality Measurements
Non-performing loans (NPLs): non-accrual	$	21,909		20,600		$	21,567		$	13,486		$	13,589
Non-performing loans (NPLs): still accruing		4,560		3,180			4,861			4,561			3,289
Troubled Debt Restructures		674		1,199			0			0			0
Non-performing assets (NPAs)		28,855		26,566			28,202			19,821			16,962
Net Charge-offs		2,477		1,910			4,308			1,957			1,001
Net Charge-offs as %
of average loans (annualized)		0.58	%	0.44	%		0.99	%		0.45	%		0.23	%
NPLs as % of total loans		1.55	%	1.39	%		1.52	%		1.03	%		0.97	%
NPAs as % of total assets		0.95	%	0.90	%		0.95	%		0.68	%		0.57	%
Allowance for loan losses as % of NPLs		114	%	118	%		100	%		131	%		137	%
Allowance for loan losses as % of total loans		1.76	%	1.63	%		1.52	%		1.35	%		1.33	%
(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 financial 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 noninterest income). We follow these practices.

CONTACT:
Provident Bank
Paul A. Maisch, EVP & Chief Financial Officer
Miranda Grimm, VP & Controller
845-369-8040