EXHIBIT 99
PRESS RELEASE OF PROVIDENT NEW YORK BANCORP
DATED April 25, 2006
<page>
Provident
New York Bancorp
Provident New York Bancorp
400 Rella Boulevard
Montebello, NY 10901-4243
T 845.369.8040
F 845.369.8255
www.providentbanking.com
FOR IMMEDIATE RELEASE Stock Symbol: PBNY
April 25, 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 $4.4 MILLION, OR $0.11 PER DILUTED SHARE
MONTEBELLO, NY - April 25, 2006 - Provident New York Bancorp (Nasdaq-National
Market: PBNY), the parent company of Provident Bank, today announced that for
the three months ended March 31, 2006, net income was $4.4 million, or $0.11 per
diluted share, compared to net income of $5.2 million, or $0.12 per diluted
share, for the three months ended March 31, 2005. For the six months ended March
31, 2006 net income was $9.6 million, or $0.23 per diluted share, compared to
net income of $10.2 million, or $0.23 per diluted share, for the six months
ended March 31, 2005.
"While the rising rate environment impacted earnings as anticipated based on our
projections, our investment and loan portfolios are structured with relatively
short durations - a strategy which I am confident will improve our earnings
performance going forward," said George Strayton, President and CEO. "In
addition, I am pleased with the strong growth of our non-interest income which
increased by 7.8% including securities gains in 2005."
"Clearly, our quarterly earnings reflect that over the past year, the movement
of core deposits from passbooks and statement savings accounts to higher
yielding deposit products has occurred at a faster pace than the re-pricing of
loans and investments," added Strayton. "We believe the imbedded strength of our
balance sheet will emerge over time based on our projections of an initial
reduction in net interest income followed by a stabilized and then increasing
net interest margin. So as interest rate increases begin to peak, we expect
interest income from our loan and investment portfolios will increase faster
than our interest expense on deposits. When considering our changing balance
sheet along with this quarter's short-term expense adjustments, I believe our
earnings prospects will continue to strengthen."
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Provident New York Bancorp Press Release cont.
Second quarter summary follows:
o 19.8% annualized increase in earning assets (4.9% for the quarter),
with an overall 5.7% increase in total assets
o 7.0% annualized growth in commercial loans (1.3% for the quarter)
o 7.8% increase in non-interest income
o 2.8% decrease in net interest income
o 53 basis-point increase in yield on earning assets
o 641,400 shares of common stock repurchased as part of the Company's
repurchase program
o 6.3% overall increase in non-interest expense primarily due to a
274.4% 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 $232,000 expense for the quarter
o The pre-tax expense of $388,000 for an adjustment to Employee
Stock Ownership Plan (ESOP) expense due to additional shares
released (see below).
o A full quarter's expense of $452,000 related to restricted stock
awards, which were granted in March 2005.
The ESOP expense increase reflects the release of the same number of shares for
fiscal 2005 as in the past years. The additional expense for the quarter
reflects an increased average stock price and a prior expectation that fewer
shares would be released during the calendar year 2005, than were actually
released.
Key Balance Sheet Changes at March 31, 2006 vs. September 30, 2005
- ------------------------------------------------------------------
o Total assets at March 31, 2006, increased to $2.7 billion, up $148.3
million, or 5.7%, from September 30, 2005.
o Gross loans grew $43.5
million to $1.4 billion, largely due to a $24.8 million, or 3.5%,
increase in commercial loans.
o Securities increased $99.5 million to $993.4 million, with
mortgage-backed securities primarily contributing to the increase.
o Interest bearing deposits grew $76.0 million to $1.4 billion and
non-interest bearing deposits decreased $23.1 million to $362.0
million, reflecting the seasonality of our transaction account deposit
base.
o Non-performing assets increased $2.5 million from September 30, 2005,
due primarily to two commercial loan relationships from the acquired
Ellenville National Bank portfolio. We also charged off $770,000 of
one of these relationships.
o Equity decreased $7.9 million to $387.3 million as current earnings of
$9.6 million were more than offset by the repurchase of 1,114,571
shares and an increase in other comprehensive loss on
available-for-sale securities (SFAS #115) of $5.2 million to $13.6
million.
o $1.0 million was reclassified from the allowance for loan losses to
other liabilities, reflecting reserves required for contingent loan
commitments (lines and letters of credit). This occurred during the
second quarter in accordance with SFAS #114.
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Provident New York Bancorp Press Release cont.
Key Operating Results - Quarter
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Net interest income decreased by 2.8%, or $595,000, to $20.8 million primarily
as a result of a decrease in net interest margin, from 3.96% to 3.71%, and the
additional cost from borrowings utilized to fund balance sheet changes and stock
repurchases (net interest margin for the linked quarter ended December 31, 2005
was 3.78%). Income from loans and investments grew by $4.3 million, primarily
due to increases in average balances, while additional borrowings utilized to
fund loan and investment securities growth and stock repurchases, in addition to
deposit migration into higher rate products, increased interest expense by $4.9
million.
Moreover, we continue our efforts to improve non-interest income, which
increased by $301,000, or 7.8%. 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 increased by $1.1 million from the prior year's quarter due
primarily to a $1.2 million increase in stock-based compensation expense, as
previously described. As a result of shifting our data processing operations
in-house, which was a cost-control initiative, 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 March 31, 2006 was 32.5%,
compared to 35.6% for the quarter ended March 31, 2005, reflecting higher
utilization of tax-advantaged assets such as bank-owned life insurance and
tax-exempt securities.
Key Operating Results - Year to Date
- ------------------------------------
Net interest income for the six-month period ended March 31, 2006 decreased by
$1.2 million, or 2.9%, compared to the same period last year. Net interest
income was negatively impacted due to a decline of 28 basis points in net
interest margin.
The provision for loan losses was $600,000 for the six-month period this year
compared to $300,000 for the six-month period ended March 31, 2005. The increase
in the provision was made in order to maintain the allowance for loan losses at
a level to absorb probable loan losses inherent in the existing portfolio.
The Company's focus on improving non-interest income, which is less susceptible
to interest-rate fluctuations, is reflected in the increase of $638,000, or
8.1%, in this area. Income from our title insurance subsidiary and from our BOLI
investments increased by $149,000 and $196,000, respectively.
Non-interest expense for the current year-to-date increased by $787,000, or
2.3%, compared to the same period last year. Stock-based compensation increased
by $1.9 million, or 147%, of which $388,000 was the additional ESOP charge
previously mentioned and $368,000 was for the acceleration of certain restricted
stock awards, as well as stock option expenses under new accounting rules of
$599,000. The movement of our data processing operations in-house in November
2005 is primarily responsible for a $740,000 decrease in data and check
processing costs, which is offset by related increases in compensation and
occupancy costs.
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Provident New York Bancorp Press Release cont.
The Company's effective tax rate for the six months ended March 31, 2006 was
32.8%, compared to 35.9% for the six-month period ended March 31, 2005. A key
factor in the lower rate is the shifting to tax-exempt securities, which
represented 10.7% of the average securities portfolio for the current six-month
period, compared to 5.5% of the average securities portfolio for the prior
fiscal year's period.
Subsequent Event
- ----------------
On April 13, 2006, the Company entered into a definitive agreement to acquire
substantially all the assets of an investment management company for which it
will pay $5 million, 50% of which will be in stock. We expect this acquisition
to enhance our non-interest income. The transaction is expected to close during
the third quarter of the Company's fiscal year.
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)
March 31, September 30, March 31,
--------- ------------ ---------
2006 2005 2005
---- ---- ----
Assets:
Cash and due from banks $ 55,110 $ 64,117 $ 50,039
Total securities 993,401 893,901 898,610
Loans held for sale 460 --- 653
Loans:
One- to- four family residential mortgage loans 463,003 456,794 437,386
Commercial real estate, commercial business
and construction loans 738,276 713,471 697,110
Consumer loans 204,317 191,808 167,721
---------- -------- ----------
Total gross loans 1,405,596 1,362,073 1,302,217
Allowance for loan losses (20,093) (22,008) (22,249)
---------- -------- ----------
Total loans, net 1,385,503 1,340,065 1,279,968
---------- -------- ----------
Federal Home Loan Bank stock, at cost 27,260 21,333 20,569
Premises and equipment, net 32,461 32,101 29,081
Goodwill 157,526 157,656 158,132
Core deposit intangible 12,122 13,770 13,902
Bank owned life insurance 38,475 37,667 27,176
Other assets 43,310 36,752 39,983
---------- -------- ----------
Total assets $2,745,628 $2,597,362 $2,518,113
========== ========== ==========
Liabilities:
Deposits:
Demand deposits $ 378,182 $ 407,662 $ 362,098
NOW deposits 143,381 143,363 135,780
---------- -------- ----------
Total transaction accounts 551,025 497,878
521,563
Savings and money market deposits 668,958 703,765 771,458
Certificates of deposit 588,768 471,611 414,943
---------- -------- ----------
Total deposits 1,779,289 1,726,401 1,684,279
---------- -------- ----------
Borrowings 546,210 442,203 395,452
Mortgage escrow funds and other 32,836 33,601 29,612
---------- -------- ----------
Total liabilities 2,358,335 2,202,205 2,109,343
Stockholders' equity 387,293 395,157 408,770
---------- -------- ----------
Total liabilities and stockholders' equity $2,745,628 $2,597,362 $2,518,113
========== ========== ==========
Shares of common stock outstanding at period end 42,424,255 43,505,659 45,505,378
Book value per share $9.13 $9.08 $8.98
Provident New York Bancorp Press Release cont.
Provident New York Bancorp and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except share and per share data)
Three Months Ended Six Months Ended
March 31, March 31,
2006 2005 2006 2005
---- ---- ---- ----
Interest and dividend income:
Loans $22,940 $19,506 45,126 $38,919
Securities 9,267 8,641 17,896 17,027
Other earning assets 358 137 656 350
------- ------- ------- -------
Total interest and dividend income 32,565 28,284 63,678 56,296
------- ------- ------- -------
Interest expense:
Deposits 6,096 3,494 11,354 6,913
Borrowings 5,643 3,369 10,439 6,261
------- ------- ------- -------
Total interest expense 11,739 6,863 21,793 13,174
------- ------- ------- -------
Net interest income 20,826 21,421 41,885 43,122
Provision for loan losses 300 150 600 300
------- ------- ------- -------
Net interest income after provision for loan losses 20,526 21,271 41,285 42,822
------- ------- ------- -------
Non-interest income:
Deposit fees and service charges 2,531 2,405 5,199 4,940
Loan fees and late charges 312 248 712 631
Net gain on sales of securities available for sale --- 263 --- 317
Net gain on sales of loans 86 21 67 80
Title insurance fees 390 300 807 658
Bank owned life insurance 394 295 807 611
Other 429 309 912 629
------- ------- ------- -------
Total non-interest income 4,142 3,841 8,504 7,866
------- ------- ------- -------
Non-interest expense:
Compensation and employee benefits 8,351 7,955 16,191 15,787
Stock-based compensation plans 1,670 446 3,182 1,286
Occupancy and office operations 3,015 2,459 5,652 4,607
Advertising and promotion 402 650 994 1,812
Professional fees 795 610 1,649 1,279
Data and check processing 789 1,158 1,666 2,406
Merger integration costs --- 341 --- 721
Amortization of intangible assets 811 990 1,648 2,117
ATM/debit card expense 338 304 683 630
Other 1,974 2,155 3,897 4,130
------- ------- ------- -------
Total non-interest expense 18,145 17,068 35,562 34,775
------- ------- ------- -------
Income before income tax expense 6,523 8,044 14,227 15,913
Income tax expense 2,118 2,864 4,663 5,718
------- ------- ------- -------
Net income $ 4,405 $ 5,180 $ 9,564 $10,195
======= ======= ======= =======
Per common share:
Basic earnings $0.11 $0.12 $0.23 $0.23
Diluted earnings 0.11 $0.12 $0.23 0.23
Dividends declared 0.05 0.045 $0.10 0.08
Weighted average common shares:
Basic 40,939,326 43,868,765 41,069,557 44,098,312
Diluted 41,406,485 44,439,229 41,541,154 44,687,028
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Provident New York Bancorp Press Release cont.
Selected Financial Condition Data: Three Months Ended
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(in 000's except share and per share data) 3/31/2006 12/31/05 09/30/05 06/30/05 03/31/05
--------------- --------------- ---------------- --------------- ---------------
(In thousands)
End of Period
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Total assets $ 2,745,628 $ 2,629,835 $ 2,597,362 $ 2,559,378 $ 2,518,113
Loans, gross (1) 1,405,596 1,387,148 1,362,073 1,314,716 1,302,217
Securities available for sale 926,037 832,578 822,952 845,451 833,828
Securities held to maturity 67,364 65,949 70,949 71,194 64,782
Bank owned life insurance 38,475 38,080 37,667 37,256 27,176
Goodwill and core deposit intangibles 169,648 170,589 171,426 172,880 172,034
Other non-earning assets 75,771 68,190 68,853 66,795 69,064
Deposits 1,779,289 1,675,312 1,726,401 1,748,270 1,684,279
Borrowings 546,210 533,843 442,203 377,626 395,452
Equity 387,293 392,579 395,157 399,694 408,770
Average Balances
- ----------------
Total assets $ 2,664,774 $ 2,603,777 $ 2,568,851 $ 2,524,925 $ 2,532,840
Loans, gross:
Real estate- residential mortgage 457,030 453,018 439,242 433,938 435,208
Real estate- commercial mortgage 514,089 502,435 490,107 492,760 486,587
Real estate- construction & land development 78,176 69,314 75,434 72,778 69,326
Commercial and industrial 147,775 146,116 146,982 139,115 137,658
Consumer loans 199,014 192,819 183,750 169,801 165,172
Loans total 1,396,084 1,363,702 1,335,515 1,308,392 1,293,951
Securities (taxable) 825,284 797,115 808,057 833,718 874,647
Securities (non-taxable) 100,693 94,324 86,258 65,239 50,687
Total earning assets 2,330,822 2,259,617 2,227,680 2,204,193 2,217,679
Non earning assets 333,952 344,160 341,171 320,732 315,161
Non-interest bearing checking 362,955 382,009 374,432 348,387 337,622
Interest bearing NOW accounts 141,064 138,273 149,061 160,234 156,838
Total transaction accounts 504,019 520,282 523,493 508,621 494,460
Savings and money market accounts 670,253 692,932 742,938 764,071 788,528
Certificates of deposit 521,399 488,517 472,081 458,023 393,508
Total deposits 1,695,671 1,701,731 1,738,512 1,730,715 1,676,496
Total interest bearing deposits 1,332,716 1,319,722 1,364,080 1,382,328 1,338,874
Borrowings 556,201 485,800 409,596 384,073 417,952
Equity 390,958 392,037 397,645 394,827 419,859
Other comprehensive loss (SFAS 115),
reflected in equity (9,992) (10,269) (5,370) (6,012) (3,319)
Selected Operating Data:
Condensed Tax Equivalent Income Statement
- -----------------------------------------
Interest and dividend income $ 32,565 $ 31,113 $ 30,062 $ 28,911 $ 28,284
Tax equivalent adjustment* 508 477 417 321 259
Interest expense 11,739 10,054 8,584 7,643 6,863
--------------- --------------- --------------- -------------- ---------------
Net interest income (tax equivalent) 21,334 21,536 21,895 21,589 21,680
Provision for loan losses 300 300 225 225 150
--------------- --------------- --------------- -------------- ---------------
Net interest income after provision for loan
losses 21,034 21,236 21,670 21,364 21,530
Non-interest income 4,142 4,355 4,610 5,433 3,841
Non-interest expense 18,145 17,409 17,665 18,141 17,068
--------------- --------------- --------------- -------------- ---------------
Income before income tax expense 7,031 8,182 8,615 8,656 8,303
Income tax expense (tax equivalent) 2,626 3,022 3,227 2,997 3,123
--------------- --------------- --------------- -------------- ---------------
Net income $ 4,405 $ 5,160 $ 5,388 $ 5,659 $ 5,180
=============== =============== =============== ============== ===============
<FN>
(1) Does not reflect allowance for loan losses of $20,093, $21,819, $22,008 $22,252 and $22,249.
* Tax exempt income assumed at a 35% federal rate.
</FN>
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Provident New York Bancorp Press Release cont.
Three Months Ended
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03/31/06 12/31/05 09/30/05 06/30/05 03/31/05
--------------- --------------- --------------- --------------- ---------------
Performance Ratios (annualized)
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Return on Average Assets 0.67% 0.79% 0.83% 0.90% 0.83%
Return on Average Equity 4.57% 5.22% 5.38% 5.75% 5.00%
Non-Interest Income to Average Assets 0.62% 0.66% 0.71% 0.86% 0.62%
Non-Interest Expense to Average Assets 2.72% 2.65% 2.73% 2.88% 2.73%
Operating efficiency 72.7% 68.5% 67.7% 67.9% 67.6%
Analysis of Net Interest Income
- -------------------------------
Yield on:
Loans 6.77% 6.56% 6.51% 6.33% 6.22%
Investment Securities- Tax Equivalent 4.28% 4.06% 3.85% 3.88% 3.90%
Earning Assets- Tax Equivalent 5.75% 5.55% 5.43% 5.32% 5.22%
Cost of:
Interest Bearing Deposits 1.86% 1.58% 1.40% 1.27% 1.06%
Borrowings 4.11% 3.92% 3.64% 3.43% 3.27%
Interest Bearing Liabilities 2.52% 2.21% 1.92% 1.74% 1.58%
Net Interest Tax Equivalent:
Net Interest Rate Spread- Tax Equivalent
Basis 3.23% 3.34% 3.51% 3.58% 3.64%
Net Interest Margin- Tax Equivalent Basis 3.71% 3.78% 3.90% 3.93% 3.96%
Capital Information Data
- ------------------------
Tier 1 Leverage Ratio- Bank Only 7.43% 8.37% 8.20% 8.30% 8.20%
Tier 1 Risk-Based Capital- Bank Only $ 191,775 $ 206,062 $ 198,828 $ 198,535 $ 193,042
Total Risk-Based Capital- Bank Only 211,868 227,713 220,122 219,271 213,410
Tangible Capital Consolidated $ 217,645 $ 221,990 $ 223,731 $ 226,814 $ 236,736
Tangible Capital as a % of Tangible Assets 8.45% 9.03% 9.22% 9.50% 10.09%
Shares Outstanding 42,424,255 43,044,299 43,505,659 43,848,778 45,505,378
Shares Repurchased Per Stock Repurchase Program 641,400 473,171 343,200 1,656,600 1,187,800
Basic weighted common shares outstanding 40,939,326 41,193,958 41,513,219 42,440,624 43,868,765
Diluted common shares outstanding 41,406,485 41,670,008 42,141,403 43,073,358 44,439,229
Per Common Share:
Basic Earnings $ 0.11 $ 0.13 $ 0.13 $ 0.13 $ 0.12
Diluted Earnings 0.11 0.12 0.13 0.13 0.12
Dividends Paid 0.05 0.05 0.045 0.045 0.04
Book Value 9.13 9.12 9.08 9.11 8.98
Tangible Book Value 5.13 5.16 5.14 5.17 5.20
Asset Quality Measurements
- --------------------------
Non-performing loans (NPLs) $ 4,144 $ 5,054 $ 1,641 $ 3,249 $ 2,767
Non-performing assets (NPAs) 4,234 5,145 1,733 3,342 2,860
Net Charge-offs 992 489 469 222 66
Net Charge-offs as % of average loans
(annualized) 0.28% 0.14% 0.14% 0.07% 0.02%
NPLs as % of total loans 0.29% 0.36% 0.12% 0.25% 0.21%
NPAs as % of total assets 0.15% 0.20% 0.07% 0.13% 0.11%
Allowance for loan losses as % of NPLs 485% 432% 1341% 685% 804%
Allowance for loan losses as % of total loans 1.43% 1.57% 1.62% 1.69% 1.71%