Provident
New York Bancorp
Provident New York Bancorp
400 Bella Boulevard
Montebello, NY 10901-4243
FOR IMMEDIATE RELEASE Stock Symbol: PBNY
January 23, 2006 Traded on NASDAQ National Market
PROVIDENT BANK CONTACT:
Paul A. Maisch, EVP & Chief Financial Officer
Christina L. Maier, SVP & Controller
845. 369.8040
PROVIDENT NEW YORK BANCORP
ANNOUNCES
QUARTERLY EARNINGS OF $5.2 MILLION, OR $0.12 PER DILUTED SHARE
MONTEBELLO, NY - January 23, 2006 - Provident New York Bancorp (Nasdaq-National
Market: PBNY), the parent company of Provident Bank, today announced that for
the three months ended December 31, 2005, net income was $5.2 million, or $0.12
per diluted share, compared to net income of $5.0 million, or $0.11 per diluted
share, for the three months ended December 31, 2004.
First quarter summary follows:
o 8.2% increase in non-interest income
o 3.0% decrease in net interest income
o 6.3% annualized increase in earning assets (1.6% for the quarter),
with an overall 1.2% increase in total assets
o 40 basis-point increase in yield on earning assets
o 8.5% annualized growth in commercial loans
o 473,171 shares of common stock repurchased as part of the Company's
repurchase program
o Increase in stock-based compensation expense due to:
o The effect of implementing the Statement of Financial Accounting
Standards (SFAS) No. 123R, which requires the expensing of stock
option grants, resulting in a $365,000 expense for the quarter
o The pre-tax expense of $368,000 for the acceleration of certain
restricted stock awards
o 1.7% overall decrease in non-interest expense despite an 80% increase
in stock-based compensation expense
George Strayton, President and CEO, commented: "I am pleased to report that,
despite the implementation of expensing stock options, our net income grew by
$145,000. The flat yield curve continues to negatively impact our net interest
margin and our ability to improve income through wholesale leverage. Although
short-term rates have risen 250 basis points in the past year, due to the
balanced structure of our deposit mix, we have experienced an increase of only
77 basis points in the cost of average interest bearing liabilities and 29 basis
points in the linked quarter. The migration of core deposits to savings products
with higher rates continues to be modest, albeit persistent. We believe we have
managed this deposit migration in a measured way, satisfying most of our
interest-sensitive customers. Commercial loan growth continues to be strong,
offsetting some of the increase in interest expense.
Strayton added, "The quality earnings are a result of deposit pricing management
and loan growth, coupled with prudent capital management strategies. In
addition, the Company's internal analysis of non-interest related items reflects
improving efficiency."
Key Balance Sheet Changes at December 31, 2005 vs. September 30, 2005
- ---------------------------------------------------------------------
o Total assets at December 31, 2005, were $2.6 billion, an increase of
$31.8 million, or 1.2%, from September 30, 2005.
o Gross loans increased $25.1 million to $1.4 billion, largely due to a
$15.2 million, or 2.1%, increase in commercial loans.
o Securities increased $4.6 million to $898.5 million, with municipal
securities primarily contributing to the increase.
o Interest bearing deposits decreased $22.6 million to $1.3 billion and
non-interest bearing deposits decreased $28.5 million to $379.2
million.
o Non-performing assets increased $3.4 million from September 30, 2005,
due primarily to a $2.2 million loan that reached maturity prior to
September 30, 2005 but was greater than 90 days past due at December
31, 2005, and was not renewed. This loan was fully paid off in January
2006.
o Equity decreased $2.6 million to $392.6 million as current earnings of
$5.2 million were more than offset by the repurchase of 473,171 shares
and an increase in other comprehensive loss (SFAS #115) of $2.0
million to $10.2 million.
Key Average Balance Sheet Changes For The Three Months Ended December 31, 2005
- ------------------------------------------------------------------------------
vs. Three Months Ended September 30, 2005
- -----------------------------------------
o Average loans increased by $29.2 million, or 2.2%.
o Non-interest bearing deposits increased from $374.4 million to $382.0
million, up $7.6 million, or 2.0%.
o Interest bearing deposits declined from $1.364 billion to $1.320
billion, down $44.4 million, resulting from disintermediation of lower
rate savings and money market products to alternative instruments,
given the high level of short-term rates.
o Average borrowings increased from $409.6 million to $485.8 million to
fund the increase in average loans, the decline in average deposits
and stock repurchases.
Operating Highlights
- --------------------
Net interest income decreased by 3%, or $643,000, to $21.1 million primarily as
a result of a decrease in net interest margin, from 4.00% to 3.78%, and the
additional cost from borrowings utilized to fund balance sheet changes and stock
repurchases (net interest margin for the linked quarter ended September 30, 2005
was 3.90%). Income from increases in loans and investments grew by $3.1 million,
while interest on borrowings due to funding loan growth and the aforementioned
stock repurchases, and deposit disintermediation increased interest expense by
$3.7 million.
Though net interest income decreased 3%, adjusted income (as calculated in the
table at the end of this release) decreased by only $26,000, or 0.1%, compared
to the same quarter last year.
Moreover, we continue our efforts to improve non-interest income, which
increased by $330,000, or 8.2%. Such increases reflect our focus on generating
additional sources of non-interest income, which tend to be less vulnerable to
interest rate cycles and fluctuations.
Non-interest expense decreased by $299,000 from the prior year's quarter despite
a $672,000 increase in stock-based compensation expense, as previously
described. As a result of shifting our data processing operations in-house,
certain costs have been redistributed to salaries and benefits as well as
occupancy and equipment. We continue to review opportunities to increase our
operating efficiencies.
The Company's effective tax rate for the quarter ended December 31, 2005 was
33.0%, compared to 36.3% for the quarter ended December 31, 2004, reflecting
higher utilization of tax-advantaged assets such as bank owned life insurance
and tax-exempt securities.
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 that 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 New York Bancorp Press Release cont.
Provident New York Bancorp and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(unaudited, in thousands, except share and per share data)
December 31, September 30,
------------ ------------
2005 2005
---- ----
Assets:
Cash and due from banks $ 61,579 $ 64,117
Total securities 898,528 893,901
Loans held for sale 0
833
Loans:
One- to- four family residential mortgage loans 461,218 456,794
Commercial real estate, commercial business
and construction loans 728,669 713,471
Consumer loans 197,261 191,808
---------- ----------
Gross loans 1,387,148 1,362,073
Allowance for loan losses (21,819) (22,008)
---------- ----------
Total loans, net 1,365,329 1,340,065
---------- ----------
Federal Home Loan Bank stock, at cost 26,677 21,333
Premises and equipment, net 32,739 32,101
Goodwill 157,656 157,656
Core deposit intangible 12,933 13,770
Bank owned life insurance 38,080 37,667
Other assets 35,481 36,752
---------- ----------
Total assets $2,629,835 $2,597,362
========== ==========
Liabilities:
Deposits:
Demand deposits $ 379,175 $ 407,662
NOW deposits 135,527 143,363
---------- ----------
Total transaction accounts 514,702 551,025
---------- ----------
Savings and money market deposits 667,633 703,765
Certificates of deposit 492,977 471,611
---------- ----------
Total deposits 1,675,312 1,726,401
---------- ----------
Borrowings 533,843 442,203
Mortgage escrow funds and other 28,101 33,601
---------- ----------
Total liabilities 2,237,256 2,202,205
Stockholders' equity 392,579 395,157
---------- ----------
Total liabilities and stockholders' equity $2,629,835 $2,597,362
========== ==========
Shares of common stock outstanding at period end 43,044,299 43,505,659
Book value per share $ 9.12 $ 9.08
Provident New York Bancorp and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except share and per share data)
Three Months Ended
December 31,
2005 2004
---- ----
Interest and dividend income:
Loans $22,186 $19,413
Securities 8,889 8,478
Other earning assets 38 121
------- -------
Total interest and dividend income 31,113 28,012
------- -------
Interest expense:
Deposits 5,258 3,367
Borrowings 4,796 2,943
------- -------
Total interest expense 10,054 6,310
------- -------
Net interest income 21,059 21,702
Provision for loan losses 300 150
------- -------
Net interest income after provision for loan losses 20,759 21,552
------- -------
Non-interest income:
Deposit fees and service charges 2,670 2,535
Loan fees and late charges 401 383
Net gain on sales of securities available for sale --- 49
Net gain (loss) on sales of loans (20) 59
Title insurance fees 416 358
Bank owned life insurance 413 316
Other 475 325
------- -------
Total non-interest income 4,355 4,025
------- -------
Non-interest expense:
Compensation and employee benefits 7,840 7,834
Stock-based compensation plans 1,512 840
Occupancy and office operations 2,636 2,148
Advertising and promotion 592 1,163
Professional fees 854 668
Data and check processing 878 1,248
Merger integration costs --- 380
Amortization of intangible assets 837 1,127
ATM/debit card expense 344 326
Other 1,916 1,975
------- -------
Total non-interest expense 17,409 17,709
------- -------
Income before income tax expense 7,705 7,868
Income tax expense 2,545 2,853
------- -------
Net income $ 5,160 $ 5,015
======= =======
Per common share:
Basic earnings $0.13 $0.11
Diluted earnings 0.12 0.11
Dividends declared 0.05 0.04
Weighted average common shares:
Basic 41,193,958 44,322,927
Diluted 41,670,008 44,926,104
Provident New York Bancorp Press Release cont.
Selected Financial Condition Data: Three Months Ended
-----------------------------------------------------------------------------
(in 000's except share and per share data) 12/31/05 09/30/05 06/30/05 03/31/05 12/31/04
----------- ----------- ----------- ----------- -----------
(In thousands)
End of Period
Total assets $2,629,835 $2,597,362 $2,559,378 $2,518,113 $2,553,430
Loans, gross (1) 1,387,148 1,362,073 1,314,716 1,302,217 1,286,918
Securities available for sale 832,578 822,952 845,451 833,828 880,626
Securities held to maturity 65,949 70,949 71,194 64,782 67,455
Bank owned life insurance 38,080 37,667 37,256 27,176 26,882
Goodwill and core deposit intangibles 170,589 171,426 172,880 172,034 172,614
Other non-earning assets 68,190 68,853 66,795 69,064 61,061
Deposits 1,675,312 1,726,401 1,748,270 1,684,279 1,701,775
Borrowings 533,843 442,203 377,626 395,452 392,845
Equity 392,579 395,157 399,694 408,770 426,541
Average Balances
- ----------------
Total assets $2,603,777 $2,568,851 $2,524,925 $2,532,840 $2,528,200
Loans, gross:
Real estate- residential mortgage 453,018 439,242 433,938 435,208 439,092
Real estate- commercial mortgage 502,435 490,107 492,760 486,587 481,061
Real estate- construction & land development 69,314 75,434 72,778 69,326 77,919
Commercial and industrial 146,116 146,982 139,115 137,658 119,080
Consumer loans 192,819 183,750 169,801 165,172 162,572
Loans total 1,363,702 1,335,515 1,308,392 1,293,951 1,279,724
Securities (taxable) 797,115 808,057 833,718 874,647 829,407
Securities (non-taxable) 94,324 86,258 65,239 50,687 48,051
Total earning assets 2,259,617 2,227,680 2,204,193 2,217,679 2,175,767
Non earning assets 344,160 341,171 320,732 315,161 352,433
Non-interest bearing checking 382,009 374,432 348,387 337,622 327,381
Interest bearing NOW accounts 138,273 149,061 160,234 156,838 142,660
Total transaction accounts 520,282 523,493 508,621 494,460 470,041
Savings and money market accounts 692,932 742,938 764,071 788,528 841,310
Certificates of deposit 488,517 472,081 458,023 393,508 404,069
Total deposits 1,701,731 1,738,512 1,730,715 1,676,496 1,715,420
Total interest bearing deposits 1,319,722 1,364,080 1,382,328 1,338,874 1,388,039
Borrowings 485,800 409,596 384,073 417,952 355,492
Equity 392,037 397,645 394,827 419,859 424,515
Other comprehensive loss (SFAS 115),
reflected in equity (10,269) (5,370) (6,012) (3,319) (2,255)
Selected Operating Data:
Condensed Tax Equivalent Income Statement
Interest and dividend income $ 31,113 $ 30,062 $ 28,911 $ 28,284 $ 28,012
Tax equivalent adjustment* 477 417 321 259 239
Interest expense 10,054 8,584 7,643 6,863 6,310
Net interest income (tax equivalent) 21,536 21,895 21,589 21,680 21,941
Provision for loan losses 300 225 225 150 150
Net interest income after provision for loan
losses
21,236 21,670 21,364 21,530 21,791
Non-interest income 4,355 4,610 5,433 3,841 4,025
Non-interest expense 17,409 17,665 18,141 17,068 17,709
---------- ---------- ---------- ---------- ----------
Income before income tax expense 8,182 8,615 8,656 8,303 8,107
Income tax expense (tax equivalent) 3,022 3,227 2,997 3,123 3,092
---------- ---------- ---------- ---------- ----------
Net income $ 5,160 $ 5,388 $ 5,659 $ 5,180 $ 5,015
========== ========== ========== ========== ==========
(1) Does not reflect allowance for loan losses of $21,819, $22,008, $22,252,
$22,249 and $22,165. * Tax exempt income assumed at a 35% federal rate.
Provident New York Bancorp Press Release cont.
Three Months Ended
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12/31/05 09/30/05 06/30/05 03/31/05 12/31/04
----------- ----------- ---------- ---------- ----------
Performance Ratios (annualized)
Return on Average Assets 0.79% 0.83% 0.90% 0.83% 0.79%
Return on Average Equity 5.22% 5.38% 5.75% 5.00% 4.69%
Non-Interest Income to Average Assets 0.66% 0.71% 0.86% 0.62% 0.63%
Non-Interest Expense to Average Assets 2.65% 2.73% 2.88% 2.73% 2.78%
Operating efficiency Unadjusted 68.5% 67.7% 67.9% 67.6% 68.8%
Operating efficiency Adjusted (2) 64.0% 62.7% 64.5% 62.3% 62.5%
Analysis of Net Interest Income
Yield on:
Loans 6.56% 6.51% 6.33% 6.22% 6.13%
Investment Securities- Tax Equivalent 4.06% 3.85% 3.88% 3.90% 3.90%
Earning Assets- Tax Equivalent 5.55% 5.43% 5.32% 5.22% 5.15%
Cost of:
Interest Bearing Deposits 1.58% 1.40% 1.27% 1.06% 0.96%
Borrowings 3.92% 3.64% 3.43% 3.27% 3.28%
Interest Bearing Liabilities 2.21% 1.92% 1.74% 1.58% 1.44%
Net Interest Tax Equivalent:
Net Interest Rate Spread- Tax Equivalent Basis 3.34% 3.51% 3.58% 3.64% 3.72%
Net Interest Margin- Tax Equivalent Basis 3.78% 3.90% 3.93% 3.96% 4.00%
Capital Information Data
Tier 1 Leverage Ratio- Bank Only 8.34% 8.20% 8.30% 8.20% 7.80%
Tier 1 Risked-Based Capital- Bank Only $ 205,686 $ 198,828 $ 198,535 $ 193,042 $ 186,724
Total Risked-Based Capital- Bank Only 227,505 220,122 219,271 213,410 206,288
Tangible Capital Consolidated $ 221,990 $ 223,731 $ 226,814 $ 236,736 $ 253,927
Tangible Capital as a % of Tangible Assets 9.03% 9.22% 9.50% 10.09% 10.67%
Shares Outstanding 43,044,299 43,505,659 43,848,778 45,505,378 45,910,902
Shares Repurchased Per Stock Repurchase Program 473,171 343,200 1,656,600 1,187,800 -
Basic weighted common shares outstanding 41,193,958 41,513,219 42,440,624 43,871,714 44,322,927
Diluted common shares outstanding 41,670,008 42,141,403 43,073,358 44,542,256 44,926,104
Per Common Share:
Basic Earnings $ 0.13 $ 0.13 $ 0.13 $ 0.12 $ 0.11
Diluted Earnings 0.12 0.13 0.13 0.12 0.11
Dividends Paid 0.050 0.050 0.045 0.045 0.040
Book Value 9.12 9.08 9.11 8.98 9.29
Tangible Book Value 5.16 5.14 5.17 5.20 5.53
Asset Quality Measurements
Non-performing loans (NPLs) $ 5,054 $ 1,641 $ 3,249 $ 2,767 $ 3,390
Non-performing assets (NPAs) 5,145 1,733 3,342 2,860 3,390
Net Charge-offs 489 469 222 66 218
Net Charge-offs as % of average loans (annualized) 0.14% 0.14% 0.07% 0.02% 0.07%
NPLs as % of total loans 0.36% 0.12% 0.25% 0.21% 0.26%
NPAs as % of total assets 0.20% 0.07% 0.13% 0.11% 0.13%
Allowance for loan losses as % of NPLs 432% 1341% 685% 804% 654%
Allowance for loan losses as % of total loans 1.57% 1.62% 1.69% 1.71% 1.72%
(2) Efficiency Ratio
Non-interest expense $ 17,414 $ 17,665 $ 18,141 $ 17,068 $ 17,709
----------- ----------- ---------- ---------- ----------
Interest & non-interest income $ 25,414 $ 26,088 $ 26,701 $ 25,262 $ 25,727
GAAP efficiency ratio 68.5% 67.7% 67.9% 67.6% 68.8%
================================================================================
Non-interest expense $ 17,414 $ 17,665 $ 18,141 $ 17,068 $ 17,709
less:
merger integration costs - (159) (249) (341) (380)
amortization of intangible assets (837) (893) (929) (990) (1,127)
--------------------------------------------------------------------------------
Adjusted non-interest expense $ 16,577 $ 16,613 $ 16,963 $ 15,737 $ 16,202
Interest & Non-interest income $ 25,414 $ 26,088 $ 26,701 $ 25,262 25,727
add: Tax equivalent adjustment 477 417 321 259 239
less:
gains on sales of securities - - (57) (263) (49)
gain on low income housing LLP - - (681) - -
--------------------------------------------------------------------------------
Adjusted income $ 25,891 $ 26,505 $ 26,284 $ 25,258 $ 25,917
Adjusted (Non-GAAP) efficiency ratio 64.0% 62.7% 64.5% 62.3% 62.5%
================================================================================