Provident New York Bancorp Announces Fourth Quarter and Fiscal 2011 Results
(firmenpresse) - MONTEBELLO, NY -- (Marketwire) -- 10/31/11 -- (NASDAQ: PBNY), Net loss for the quarter was $493,000, or $(0.01) per diluted share, compared to net income of $5.4 million, or $0.14 per diluted share for same quarter last year and net income of $1.9 million, or $0.05 per diluted share for the linked quarter ended June 30, 2011. Net income for fiscal 2011 year-to-date was $11.7 million, or $0.31 per diluted share compared to $20.5 million or $0.54 per diluted share for year-to-date fiscal 2010. As described in more detail below gains on sales of securities and net charge-offs on loans affected results in the current quarter to a greater extent than comparative quarters and in the linked quarter (discussed in more detail in the credit quality section of this release).
Jack Kopnisky, President and CEO, commented, "We have substantially completed a comprehensive review of operations and opportunities at Provident, and new strategies designed to drive growth in revenues and earnings have been implemented. Achieving these longer-range goals comes at a current cost, however, including fourth quarter charges of $2.1 million associated with the relocation of two branches and $1.1 million of severance expense associated with workforce realignment. Credit costs also impacted the quarter. We charged off $6.7 million on two ADC relationships and $1.2 million as we sold a $2.5 million pool of non-performing residential mortgages. I am encouraged by our commercial loan originations, which were $147.3 million for the fourth quarter, up $21.8 million over the linked quarter. The commercial loan approved pipeline is up 31 percent over the linked quarter and up 111 percent over the same quarter of the previous year. During the quarter we opened two new commercial banking centers in Bergen County, New Jersey, as part of our revenue enhancement strategies. These locations already have loans in our pipeline. While fiscal 2011 was challenging on many fronts, we have taken necessary steps to position the Company for growth as well as risk mitigation in the upcoming fiscal year."
Provisions for loan losses were $8.8 million for the quarter compared to $3.6 million for the linked quarter, and $2.3 million for the same quarter last year.
Commercial loan originations were $147.3 million compared to $125.5 million for the linked quarter and $97.9 million for the same quarter last year.
Net charge-offs of $10.3 million are up $5.9 million from the linked quarter and up $7.8 million from the same quarter last year, primarily due to the ADC credit mentioned above. Charge-offs during the quarter included loans with $1.4 million previously provisioned for as of June 30, 2011.
Non-performing loans, a subset of substandard loans, decreased to $40.6 million, down $7.5 million from the linked quarter and are up $13.7 million over the same quarter in the prior year.
Restructuring charges in the fourth quarter of 2011 included $1.1 million in severances and $2.1 million in branch relocation or an after tax effect of $0.06 on diluted earnings per share.
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Net interest income was $22.8 million for the fourth quarter of fiscal 2011, a decrease of $525,000 from the same quarter of fiscal 2010 as funding costs declined at a slower pace than interest income. The current quarter was also negatively effected by non-performing loans net of prepayment fees, reducing interest income on loans by $630,000 in the fourth quarter of 2011 and $68,000 in the fourth quarter of 2010. The tax-equivalent yield on investments decreased 35 basis points and loan yields were down 26 basis points compared to the fourth quarter fiscal 2010. As a result, the yield on interest-earning assets declined 34 basis points. For the same period, the cost of deposits decreased 8 basis points to 0.26 percent, and the cost of borrowings increased by 16 basis points to 3.69 percent. The resulting net interest margin on a tax-equivalent basis was 3.58 percent for the fourth quarter of fiscal 2011, compared to 3.75 percent for the same period a year ago.
Fourth quarter fiscal 2011 compared with linked quarter ended June 30, 2011
Net interest income for the quarter ended September 30, 2011 remained relatively unchanged compared to the linked quarter ended June 30, 2011. The tax-equivalent net interest margin decreased 12 basis points from 3.70 percent in the linked quarter. The overall yield on loans decreased 19 basis point to 5.22 percent. The current quarter was negatively effected by non-performing loans net of prepayment fees to a greater extent than the linked quarter, $630,000 and $65,000 respectively. The yield on the investment portfolio decreased 6 basis points. Further, the cash balance increase at the federal reserve from municipal deposit collection depressed net interest margin by a further 2 basis points. The overall yield on earning assets decreased 17 basis points to 4.33 percent. The cost of deposits declined 3 basis points, reflecting the already low level of deposit pricing. The average cost of borrowing increased 2 basis points as a result of a change in the mix of short and long term advances.
Fiscal 2011 compared with fiscal 2010
Net interest income for fiscal 2011 was $91.3 million a decrease of $2.0 million over 2010 levels.
The net interest margin on a tax-equivalent basis was 3.65 percent for fiscal 2011, compared to 3.78 percent for 2010. The decrease was due to a decline in investment portfolio yields of 58 basis points and loan yields of 22 basis points offset in part by lower cost of deposits (14 basis points) and borrowings (7 basis points).
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Noninterest income totaled $9.1 million for the fourth quarter, an increase of $1.3 million over the fourth quarter of fiscal 2010. Higher gains on sales of securities of $4.5 million compared to $2.9 million as well as a lower fair value loss on interest rate caps of $170,000 were offset in part by an other than temporary impairment on investments securities of $251,000.
Fourth quarter fiscal 2011 compared with linked quarter ended June 30, 2011
Noninterest income increased $3.9 million on a linked quarter basis, mainly due to higher gains on the sale of securities of $4.5 million compared $542,000 for the linked quarter.
Fiscal 2011 compared with fiscal 2010
Non-interest income increased by $2.8 million for fiscal 2011 as compared to 2010. Increases were seen in gains on securities sales and loans of $1.9 million and $160,000, respectively, as well as a lower loss on fair value of interest rate caps of $909,000 offset in part by declines in deposit fees of $417,000.
Fourth quarter fiscal 2011 compared with fourth quarter fiscal 2010
Noninterest expense increased $3.0 million, when compared to the fourth quarter fiscal 2010. The increase is primarily due to charges of $3.2 million related to branch relocations and employee severances. In addition, increased expenses associated with foreclosed property were offset in part by lower incentive compensation and regulatory fees from FDIC insurance.
Fourth quarter fiscal 2011 compared with the linked quarter ended June 30, 2011
On a linked quarter basis, noninterest expense increased $1.7 million. Increases were due to the aforementioned restructuring charge offset in part by costs associated with the transition in CEO in the prior quarter.
Fiscal 2011 compared with fiscal 2010
Non interest expense increased $6.9 million in fiscal 2011 over 2010. Expenses associated with defined benefit settlement, restructuring charges, transition in CEO, a full year of operations in Nyack and Yonkers, and additional REO expense were offset in part by declines in intangible amortization and FDIC assessments.
The Company recorded an income tax credit for the fourth quarter of $826,000 compared to an effective tax rate of 27 percent for the same period in fiscal 2010 (increased effect of BOLI income and tax-exempt municipal security interest relative to pre-tax income). On a year-to-date basis the effective tax rate was 19 percent for fiscal 2011 and 25 percent for 2010.
Nonperforming loans decreased to $40.6 million at September 30, 2011 from $48.1 million at June 30, 2011, as the Company executed a sale of non-performing residential mortgages as well as charging off of non-performing loans in the quarter. Net charge offs for the quarter ended September 30, 2011 were $10.3 million compared to $4.3 million for the linked quarter and $2.4 million for the quarter ended September 30, 2010. The increase was caused primarily by an additional $5.5 million charge related to one ADC relationship due to lack of sales and the related drop in appraised value for which we had previously charged off $2.0 million in the third quarter. Our provision was $8.8 million for the current quarter, resulting in an allowance for loan losses of $27.9 million, or 69 percent of non-performing loans at September 30, 2011. This compares to 61 percent at June 30, 2011 and 115 percent at September 30, 2010. Substandard loans at September 30, 2011 were $94.0 million, down from $103.8 million at June 30, 2011, and $132.1 million at September 30, 2010. Special mention loans were $23.0 million compared to $24.1 million at June 30, 2011 and $37.9 million at September 30, 2010.
The balance sheet grew $161.3 million or 5.4 percent compared to June 30, 2011 due to an increase cash and due from banks resulting from deposits of municipal tax collections.
Deposits increased $41.2 million compared to June 30, 2011, excluding municipal and wholesale deposits. Transaction accounts, excluding municipal deposits increased $53.1 million compared to June 30, 2011. Deposits as of September 30, 2011, included approximately $280 million in municipal tax deposits.
Total loan originations during fourth quarter fiscal 2011 were $180.6 million compared to $148.3 million from the linked quarter. Commercial real estate balances increased by $49.9 million over June 30, 2011 levels. Residential 1-4 family mortgages declined over the same period by $12.3 million.
Securities decreased $95.3 million over June 30, 2011 levels, primarily due to sales of $242.7 million in securities during the fourth quarter with associated gains of $4.5 million as well as $54.7 million in called bonds which were partially offset by new purchases of investments of $203.8 million.
Borrowings decreased over June 30, 2011 levels by $26.8 million as year end cash and municipal transaction account levels resulted in paying off Federal Home Loan Bank of New York overnight borrowings.
Provident Bank remained well-capitalized at eptember 30, 2011 with the Bank's Tier 1 leverage ratio at 8.14 percent. The Company's tangible capital as a percent of tangible assets decreased 43 basis points from June 30, 2011 levels to 8.94 percent at September 30, 2011, while tangible book value per share increased to $7.02 from $6.93 at June 30, 2011 (a reconciliation of these Non-GAAP equity ratios are included with the ratios listed on the last page). Total capital increased $2.1 million from June 30, 2011, to $431.1 million at September 30, 2011, due to a net decrease of $2.9 million in the Company's retained earnings, a $870,000 increase in treasury stock, a decrease of $45,000 due to stock based compensation items, offset by a $5.9 million improvement in accumulated other comprehensive income. The Company repurchased 183,000 shares in the open market during the fourth fiscal quarter. The remaining authorization for share repurchases is 776,713 shares.
The Company holds four private label mortgage backed securities with an amortized cost of $5.4 million and an estimated fair value of $4.9 million. One security included within these amounts has a carrying value of $1.7 million after recording an other than temporary impairment charge of $75,000. The amortized cost of this security is $1.9 million. Additionally, at September 30, 2011 an equity security was held with a carrying amount of $837,000 after recording an impairment charge of $203,000 due to other than temporary impairment being recognized. It is not likely that the Company will be required to sell these two securities prior to recovery of its amortized cost basis less any applicable current-period credit loss.
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 36 branches that serve the Hudson Valley region. The Bank offers a complete line of commercial, retail and investment management services. For more information, visit the Company's web site at .
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 2011 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 2011, even though the new information was received by management in fiscal 2012 subsequent to the date of this release.
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Datum: 31.10.2011 - 06:30 Uhr
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