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
