EXHIBIT 99
PRESS RELEASE OF PROVIDENT BANCORP, INC.
[letterhead of Provident Bancorp, Inc.]
NEWS RELEASE
FOR IMMEDIATE RELEASE Stock Symbol: PBCP
Thursday, April 22, 2004 Traded on Nasdaq National Market
CONTACT:
Paul A. Maisch, SVP & Chief Financial Officer
Roberta Lenett, VP & Manager of Shareholder Relations
(845) 369-8082
PROVIDENT BANCORP ANNOUNCES
SECOND QUARTERLY EARNINGS
MONTEBELLO, NY - April 22, 2004 -- Provident Bancorp, Inc. (Nasdaq-National
Market: PBCP), the parent company of Provident Bank, today announced that for
the three months ended March 31, 2004, net income before the after tax charges
for the establishment of the charitable foundation ($3 million), merger
integration costs ($430,000) and amortization of core deposit intangibles
($422,000) was $3.9 million, or $0.10 per diluted share. On a GAAP basis, net
income for the three months ended March 31, 2004 was $72,000, compared to net
income of $ 2.5 million for the three months ended March 31, 2003, a decrease of
$ 2.4 million. Basic and diluted earnings per share were less than $0.01 for the
quarter ended March 31, 2004, compared to $0.07 for both basic and diluted
earnings per share, for the same period last year. Included within the quarter
were the above noted charges related to the establishment of the charitable
foundation in connection with the second-step conversion and merger integration
costs, which were only partially offset by the increase in earnings from the
investment of the $192.4 million in net proceeds from the Company's second-step
stock conversion and 2 1/2 months of operations related to ENB. Net income for
the six months ended March 31, 2004 was $3.1 million, compared to net income of
$5.6 million for the six months ended March 31, 2003, a decrease of $2.5
million, due to the above mentioned items. Basic and diluted earnings per share
were $0.09 and $0.09, respectively, for the six months ended March 31, 2004
compared to $0.16 and $0.16, respectively, for the same period last year.
Earnings per share results for the prior periods have been restated to reflect
the 4.4323 conversion ratio as a result of the Company's second-step conversion.
George Strayton, the Company's President and CEO, commented "The past quarter
has proven to be filled with excitement while at the same time has been a
challenging period. In January, we completed our second step stock offering
raising $195.7 million from our depositors, established a $5 million pre-tax
charitable trust and acquired ENB Holding Company, parent of Ellenville National
Bank, which added 9 branches and $350 million in assets, and welcomed former
Ellenville employees to Provident. Through the efforts of many dedicated
employees from throughout the Provident Organization, the systems conversions
and branch integration onto Provident's platform in February, went smoothly. We
look forward to providing enhanced services to our new customers now that all
Provident accounts are housed on the same data processing systems.
Further, in March we announced the signing of a definitive agreement to acquire
and merge Warwick Community Bancorp, Inc. into Provident. With Warwick's 9
branches (six in Orange County) we will become the market leader in deposits in
Orange County. With the addition of Warwick's $760 million in assets we will be
approaching $2.5 billion in assets.
We remain focused on serving the Ellenville customers and are already working
diligently toward the Warwick expansion."
Total assets as of March 31, 2004 were $1.7 billion, an increase of $540
million, or 46.0% over assets of $1.2 billion at September 30, 2003, and an
increase of $623 million, or 57.1%, over assets of $1.1 billion at March 31,
2003. The increase is due primarily to the January acquisition of ENB, whose
assets totaled $349.7 million on the merger date and proceeds from the offering
in the second-step conversion of $192.4 million, net of related costs.
Net Loans as of March 31, 2004 were $945 million, an increase of $242 million,
or 34.4%, over net loan balances of $703 million at September 30, 2003, and an
increase of $265 million, or 39.0%, over balances at March 31, 2003. Loans
acquired from ENB totaled $219.2 million, while allowances for loan losses
acquired in connection with ENB were $5.7 million, or 2.6%, of outstanding loan
balances, net. Post-acquisition, residential loans increased by $8.4 million, or
2.2%, over balances at September 30, 2003. Commercial loans increased by $201.1
million, or 79.5%, during the six month period, while consumer loans increased
by $38.0 million, or 47.1%, both primarily attributable to the ENB acquisition.
Asset quality continues to be strong. At $4.3 million, or 0.25% of total assets,
non-performing assets are down from $4.7 million at September 30, 2003 and $5.8
million at March 31, 2003.
Deposits as of March 31, 2004 were $1.2 billion, up $339 million, or 39.0%, from
September 30, 2003, and $368 million, or 43.8%, from March 31, 2003. Deposits
acquired from ENB totaled $326.8 million. As of March 31, 2004 retail and
commercial transaction accounts were 28.2% of deposits compared to 25.9% at
September 30, 2003 and 24.7% at March 31, 2003.
Stockholders' equity increased by $230.2 million at March 31, 2004 over the
$117.9 million at September 30, 2003. The Company completed its second-step
stock conversion in January, 2004, raising $192.4 million in new capital, net of
related costs. In addition, $39.7 million and $4.0 million, respectively, in new
stock was issued for the purchase of ENB and for the formation of the charitable
foundation. Net income of $3.1 million for the six-month period also increased
capital. Partially offsetting the increases were the payments of cash dividends
totaling $1.8 million and the establishment of a new ESOP plan for $10.0
million.
Income Information - Quarter
Net interest income after provision for loan losses for the three months ended
March 31, 2004 was $15.7 million, compared to $11.2 million for the three months
ended March 31, 2003, an increase of $4.5 million or 41%. The increase in net
interest income was largely due to a $496 million increase in average earning
assets to $1.5 billion during the quarter ended March 31, 2004, as compared to
$974 million for the same quarter in the prior year, due primarily to the ENB
acquisition and net proceeds from the second-step offering. The increase in
average earning assets was partially offset by a decline in average yield of 79
basis points from 6.01% to 5.22%. A decrease in the average cost of interest
bearing liabilities of 32 basis points still resulted in a $201,000 increase in
interest expense for the quarter compared to the same quarter in 2003, as
average interest-bearing liabilities increased by $291 million. Net interest
margin declined by 43 basis points to 4.36%, while net interest spread declined
by 47 basis points to 4.08%.
Non-interest income for the three months ended March 31, 2004 was $ 2.8 million
compared to $2.4 million for the three months ended March 31, 2003, an increase
of $417,000, or 17.6%. Realized gains on securities available for sale were
$518,000 for the current three-month period, compared to $427,000 for the same
period last year. During the three-month period ending March 31, 2004, the
Company also recorded gains on sales of loans totaling $84,000, compared to
$403,000 for the same period last year. Excluding the effects of gains on sales
of securities and loans, the increase was $645,000, or 42.0%. Banking fees and
service
charges increased by $692,000, or 62.1%, of which $403,000 was generated from
the acquired Ellenville branches. The remaining increase of $289,000 was due
primarily to volume-driven increases in overdraft, non-sufficient funds, and ATM
and debit card fees. Other non-interest income decreased by $47,000, or 11.1%,
due primarily to lower rates on the Company's bank owned life insurance
investments.
Non-interest expenses, excluding the Charitable Foundation contribution of $5
million pre-tax, for the three months ended March 31, 2004 increased by $4.1
million, or 42.8%, to $13.7 million, compared to $9.6 million for the three
months ended March 31, 2003. The acquisition of ENB in January 2004, played a
major role in the increases in most categories, contributing to increases in
compensation and employee benefits of $937,000. Excluding the
acquisition-related salaries and benefits, the increase in compensation and
benefits was $746,000, or 14.9%. The increase is primarily due to $193,000, or
5.5%, in annual salary increases and staff additions; and a $273,000 increase in
stock-based compensation plans as the Company's stockholders enjoyed an
increased share value during the current period. Occupancy and office operations
increased by $305,000, or 22.5%, for the three months ended March 31, 2004,
almost all of which was attributable to the acquired Ellenville properties.
Amortization of core deposit intangible increased by $588,000 as a result of the
ENB deposits acquired. Other expenses increased by $617,000 or 40.8% due
primarily to increases of $126,000, $134,000, $107,000 and $67,000, all
respectively in director's stock-based compensation plans, office supplies,
correspondent bank expense and postage. Further, merger integration expenses
were $717,000.
Income Information - Six Months
Net interest income after provision for loan losses increased by $4.6 million,
or 20.5%, to $27.1 million for the six months ended March 31, 2004 from $22.5
million for the same period in 2003. The increase in interest income reflects an
increase in average earning assets of $316.3 million to $1.3 billion, offset by
a decline in yield of 88 basis points to 5.17%. The cost of interest bearing
liabilities declined by $422,000 as the average rate paid on average interest
bearing funds decreased 34 basis points to 1.23%, even though average balances
increased by $153.1 million to $964.0 million. Net interest margin decreased
from 4.75% to 4.25% and net interest spread declined from 4.49% to 3.94%.
Non-interest income for the six month period ended March 31, 2004 increased to
$5.6 million, an increase of $1.2 million, or 28%, compared to $4.4 million for
the same six month period last year. Realized gains on securities available for
sale and gains on sales of loans were $1.4 million and $170,000, respectively,
for the current period, generating a combined increase of $92,000 over the
securities and loan sales gains of $1.5 million for the same period last year.
Banking fees and service charges increased to $3.2 million for the current six
month period, an increase of $987,000, or 44.8%, over the same period last year.
The increase is primarily attributable to increases in service fees of $403,000
resulting from the acquired branches, coupled with volume-related increases in
service fees on new and existing accounts at the original Provident branches.
Other income increased by $138,000, or 21.5%, to $779,000 for the six month
period ended March 31, 2004, from $641,000 for the same period last year. The
increase is primarily due to $292,000 in income from the BOLI for the current
six month period compared to $161,000 for the same period last year, as the BOLI
program was only established three months into fiscal 2003.
Non-interest expenses, excluding the Charitable Foundation contribution of $5
million, increased to $23.2 million for the six month period ended March 31,
2004, an increase of $5.2 million, or 28.9%, compared to $18.0 million for the
same six month period last year. Increases in compensation and benefits directly
attributable to the acquisition of ENB were $937,000 and in occupancy and office
operations were $299,000. Compensation and benefits increased by an additional
$1.5 million, of which $393,000 was attributable to the increased cost of
stock-based compensation plans. Additional increases in non-interest expense
categories for the current year to date period are increased advertising costs
of $124,000, or 13.6%, and a volume-related increase of $131,000, or 9.5%, in
data and check processing costs. Amortization of intangible assets increased by
$545,000 due to the addition of the ENB core deposit intangible. Other
non-interest expense increased by $688,000, or 22.5% primarily due to increases
in office supplies ($196,000), directors' stock-based compensation plans
($147,000), postage ($82,000) and correspondent bank expense ($81,000).
Provident Bancorp, Inc. will file a registration statement, a proxy
statement/prospectus and other relevant documents concerning the proposed
transaction with the Securities and Exchange Commission (the "SEC").
Stockholders are urged to read the registration statement and the proxy
statement/prospectus when it becomes available and any other relevant documents
filed with the SEC, as well as any amendments or supplements to those documents,
because they will contain important information. You will be able to obtain a
free copy of the joint proxy statement/prospectus, as well as other filings
containing information about Provident and Warwick, at the SEC's Internet site
(http://www.sec.gov). Copies of the proxy statement/prospectus to be filed by
Provident Bancorp, Inc. also can be obtained, when available and without charge,
by directing a request to Provident Bancorp, Inc., Investor Relations, attn.
Roberta Lenett, 400 Rella Boulevard, Montebello, New York 10901, (845) 369-8082
or to Warwick Community Bancorp, Inc., attn. Barbara A. Rudy - Moore, Senior
Vice President, 18 Oakland Avenue, P.O. Box 591, Warwick, New York 10990-0591,
845-986-2206 ext. 2238, or by sending a request to wsbbar@warwick.net.
Warwick Community Bancorp, Inc., and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the stockholders
of Warwick in connection with the acquisition. Information about the directors
and executive officers of Warwick and their ownership of Warwick common stock is
set forth in Warwick's most recent proxy statement as filed with the SEC, which
is available at the SEC's Internet site (http://www.sec.gov) and at Warwick's
address in the preceding paragraph. Additional information regarding the
interests of these participants may be obtained by reading the joint proxy
statement/prospectus regarding the proposed transaction when it becomes
available.
Note:
In addition to historical information, this earnings release may contain
forward-looking statements. For this purpose, any statements contained herein
that are not statements of historical fact may be deemed to be forward-looking
statements. There are a number of important factors which have been outlined in
previously filed documents 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.
Provident Bancorp, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share data)
March 31, 2004 September 30,2003 March 31, 2003
-------------- --------------- --------------
Assets:
Cash and due from banks ...................................... $ 50,523 $ 33,500 $ 31,861
Total securities ............................................. 593,949 374,259 328,194
Loans held for sale .......................................... 946 2,364 168
Loans:
One-to four-family residential mortgage loans ......... 389,154 380,776 386,461
Commercial real estate, commercial business
and construction ................................ 453,984 252,857 222,527
loans
Consumer loans ....................................... 118,579 80,620 81,437
------------ ------------ ------------
Gross loans ................................ 961,717 714,253 690,425
Allowance for loan losses ............................ (17,093) (11,069) (10,901)
------------ ------------ ------------
Total loans, net ........................... 944,624 703,184 679,524
------------ ------------ ------------
Federal Home Loan Bank stock, at cost ........................ 6,724 8,220 5,970
Premises and equipment, net .................................. 16,365 11,647 11,344
Goodwill ..................................................... 65,670 13,540 13,540
Core Deposit Intangible ...................................... 6,900 1,063 1,259
Bank owned life insurance .................................... 12,985 12,483 12,161
Other assets ................................................. 15,254 14,045 7,232
------------ ------------ ------------
Total assets .............................. $ 1,713,940 $ 1,174,305 $ 1,091,253
============ ============ ============
Liabilities:
Deposits:
Transaction accounts ............................... $ 340,305 $ 225,376 $ 207,568
Savings and money market deposits .................. 513,511 407,939 390,521
Certificates of deposit ............................ 354,558 236,238 242,512
------------ ------------ ------------
Total deposits ........................... 1,208,374 869,553 840,601
------------ ------------ ------------
Borrowings .............................................. 134,726 164,757 119,388
Mortgage escrow funds and other ......................... 22,754 22,138 17,719
------------ ------------ ------------
Total liabilities ........................ 1,365,854 1,056,448 977,708
Stockholders' equity ......................................... 348,086 117,857 113,545
------------ ------------ ------------
Total liabilities and stockholders' equity $ 1,713,940 $ 1,174,305 $ 1,091,253
============ ============ ============
Common shares outstanding at period end (1) .................. 39,619,261 35,221,365 35,334,747
Book value per share ......................................... $ 8.79 $ 3.35 $ 3.21
(1) Prior period share information has been adjusted to reflect the 4.4323
conversion ratio in connection with the Company's second step common stock offering in January 2004.
Provident Bancorp, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except share data)
Three Months Ended Six Months Ended
March 31 March 31
2004 2003 2004 2003
---- ---- ---- ----
Interest and dividend income:
Loans ...................................................... $ 13,821 $ 11,129 $ 24,351 $ 22,475
Securities ................................................. 5,253 3,296 9,018 6,968
Other earning assets ....................................... 11 14 34 20
------------ ------------ ------------ ------------
Total interest and dividend income .............................. 19,085 14,439 33,403 29,463
------------ ------------ ------------ ------------
Interest expense:
Deposits ................................................... 1,996 1,965 3,553 4,310
Borrowings ................................................. 1,151 982 2,361 2,026
------------ ------------ ------------ ------------
Total interest expense .......................................... 3,147 2,947 5,914 6,336
------------ ------------ ------------ ------------
Net interest income ............................................. 15,938 11,492 27,489 23,127
Provision for loan losses ....................................... 200 300 350 600
------------ ------------ ------------ ------------
Net interest income after provision for loan losses ............. 15,738 11,192 27,139 22,527
------------ ------------ ------------ ------------
Non-interest income:
Banking fees and service charges ........................... 1,806 1,114 3,190 2,203
Gains on sales of securities available for sale ............ 518 427 1,448 1,084
Gains on sales of loans .................................... 84 403 170 442
Other ...................................................... 376 423 779 641
------------ ------------ ------------ ------------
Total non-interest income ....................................... 2,784 2,367 5,587 4,370
------------ ------------ ------------ ------------
Non-interest expense:
Compensation and employee benefits ......................... 6,699 5,016 11,650 9,232
Occupancy and office operations ............................ 1,663 1,358 2,990 2,490
Advertising and promotion .................................. 567 495 1,035 911
Professional fees ......................................... 406 377 792 725
Data and check processing .................................. 765 683 1,509 1,378
Merger integration costs ................................... 717 717
Amortization of intangible assets .......................... 703 115 787 242
Establishment of charitable foundation ..................... 5,000 5,000
Other ...................................................... 2,130 1,513 3,740 3,052
------------ ------------ ------------ ------------
Total non-interest expense ...................................... 18,650 9,557 28,220 18,030
------------ ------------ ------------ ------------
Income before income tax expense ................................ (128) 4,002 4,506 8,867
Income tax expense .............................................. (200) 1,482 1,389 3,306
------------ ------------ ------------ ------------
Net income ...................................................... $ 72 $ 2,520 $ 3,117 $ 5,561
============ ============ ============ ============
Per common share:
Basic earnings ............................................. $ 0.00 $ 0.07 $ 0.09 $ 0.16
Diluted earnings ........................................... 0.00 0.07 0.09 0.16
Dividends declared ......................................... 0.035 0.03 0.07 0.06
Weighted average common shares (1):
Basic ...................................................... 37,269,062 34,207,019 35,777,054 34,186,015
Diluted .................................................... 37,912,560 34,728,985 36,391,057 34,696,935
(1) Prior period information has been adjusted to reflect the 4.4232 conversion
ratio in connection with the Company's second-step stock offering.
Provident Bancorp, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except share data)
March 31, September 30, March 31,
2004 2003 2003
------------------- ------------------- --------------------
Asset Quality Data:
Non-performing loans (NPLs) $4,138 $ 4,697 $5,634
Non-performing assets (NPAs) $4,250 $ 4,697 $5,774
NPLs as % of total loans 0.44% 0.66% 0.82%
NPAs as % of total assets 0.25% 0.40% 0.53%
Allowance for loan losses as % of NPLs 413% 236% 193%
Allowance for loan losses as % of total loans 1.78% 1.55% 1.58%
Capital Ratios:
Equity to total assets (consolidated) 20.29% 10.04% 10.41%
Tier 1 capital ratio (Bank only) 11.93% 8.14% 8.49%
Tier 1 capital consolidated 16.63% 8.70% 8.85%
Three Months Ended Six Months Ended
March 31, March 31,
2004 2003 2004 2003
------------- -------------- -------------- --------------
Performance Ratios (annualized):
Return on:
Average assets 0.02% 0.97% 0.44% 1.06%
Average common equity 0.10% 9.09% 2.92% 9.96%
Net interest rate spread 4.08% 4.55% 3.94% 4.49%
Net interest margin 4.36% 4.79% 4.25% 4.75%
Average Balance Data:
Average assets $ 1,684,803 $ 1,055,754 $ 1,431,959 $ 1,047,695
Average earning assets 1,469,576 973,601 1,292,518 976,226
Average stockholders' equity 310,858 112,406 213,717 111,989