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Provident New York Bancorp Reports Operating Results (10-Q)

August 06, 2010 | About:
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10qk

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Provident New York Bancorp (PBNY) filed Quarterly Report for the period ended 2010-06-30.

Provident New York Bancorp has a market cap of $365.7 million; its shares were traded at around $9.41 with a P/E ratio of 18.1 and P/S ratio of 2.2. The dividend yield of Provident New York Bancorp stocks is 2.5%. Provident New York Bancorp had an annual average earning growth of 16.2% over the past 10 years. GuruFocus rated Provident New York Bancorp the business predictability rank of 4-star.PBNY is in the portfolios of Irving Kahn of Kahn Brothers & Company Inc., Private Capital of Private Capital Management, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

For the nine months ended June 30, 2010, net income was $15.1 million or $0.39 per diluted share, compared to $20.8 million or $0.54 per diluted share for the same period ended June 30, 2009. After adjusting for gains on securities and the fair value of interest rate caps net income was $12.5 million or $0.32 per diluted share for the nine months ended June 30, 2010, compared to $11.0 million or $0.29 per diluted share for the same period ended June 30, 2009. We present earnings excluding net securities gains and fair market value adjustments on interest rate caps as we believe this affords investors a better understanding of our core banking operations, and aligns more closely to the views of the investment community, which tends to adjust for more variable components of income. Net interest income of $70.0 million, decreased $1.4 million from the same period in the prior year. Provision for loan losses was $7.8 million, down from $13.1 million in the same period of the prior year. Gains on sales of securities totaled $5.2 million as the Company continues to monetize a portion of the appreciation in the portfolio compared to $16.4 million for the nine months ended June 30, 2009. Non interest income decreased $12.7 million mostly due to the decrease in gains on sales of securities and the cumulative loss on interest rate caps. Expenses are up slightly from the same period in 2009 due to increases in employee benefits and incentive accruals, occupancy and equipment expenses, advertising and promotion and professional fees.

Net Loans as of June 30, 2010 were essentially unchanged at $1.7 billion from September 30, 2009. ADC loans increased by $25.7 million, or 12.7%, over balances at September 30, 2009, primarily due to activity on newly approved loans. Commercial real estate and commercial business loans increased by $21.3 million, or 2.7%, from September 30, 2009 balances. Consumer loans decreased by $11.2 million, or 4.4%, during the nine month period ended June 30, 2010, while residential mortgage loans decreased by $33.3 million or 7.2% primarily due to new conforming fixed rate loan originations of $27.2 million being sold in the secondary market. Total loan originations were $379.1 million for the nine months ended June 30, 2010 while payments were $342.6 million. While overall loan demand remains weak due to the economic slowdown, commercial loan originations including community business loans during the nine months ending June 30, 2010 were $290.2 million compared to $244.2 million for the nine months ended June 30, 2009.

Total securities increased by $41.6 million, or 4.7%, to $918.8 million at June 30, 2010, compared to September 30, 2009 due to purchases of securities as the company invested excess cash. Total mortgage-backed securities at amortized cost decreased by $78.4 million, primarily due to sales of $186.8 million and pay downs of $60.6 million, partially offset by purchases totaling $170.4 million. US Treasury notes increased $59.9 million and U.S. Government federal agency securities increased $34.6 million. The Company owns private label CMO s at amortized cost of $9.6 million and a carrying value of $9.0 million. See note six to the consolidated financial statements for further discussion on determination of fair value for these securities.

Deposits as of June 30, 2010 were $2.0 billion, a decrease of $121.3 million, or 5.8%, from September 30, 2009, as municipal tax deposits of $201 million as of year end were utilized by the individual municipalities. Commercial and personal transaction accounts continued to grew by $26.7 million from $570.2 million to $596.9 million at June 30, 2010. Other categories showing major changes were as follows: savings accounts increased $47.0 million, money market accounts increased $36.4 million and certificates of deposits decreased $67.2 million over September 30, 2009 balances.

Stockholders equity increased $1.7 million from September 30, 2009, to $429.1 million at June 30, 2010, due to a net increase of $6.2 million in the Company s retained earnings, an increase of $1.3 million due to stock based compensation items, a $1.1 million increase in accumulated other comprehensive income, offset by a net change in treasury stock of $6.9 million. In addition, the Company repurchased 1,151,923 common shares, at a cost of $9.8 million during the fiscal year.

Net income for the three months ended June 30, 2010 was $4.8 million, a decrease of $4.2 million compared to $9.0 million for the same period in fiscal 2009. Excluding net securities gains and the fair value adjustment of interest rate caps earnings was $0.11 per diluted share for the three months ended June 30, 2010 compared to $0.08 for the same period in fiscal 2009. Net interest income before provision for loan losses for the three months ended June 30, 2010, increased by $1.5 million or 6.5%, to $24.2 million, compared to $22.7 million for the same period in the prior year. The provision for loan losses for the three months ended June 30, 2010 was $2.8 million, a decrease of $750,000, compared to $3.5 million for the same period in the prior year. Net interest margin on a tax equivalent basis for the three months ended June 30, 2010, increased 17 basis points compared to the same period last year from 3.74% to 3.91%. Non-interest income for the three months ended June 30, 2010, was $5.3 million, a decrease of $10.0 million, compared to $15.3million for the same period in fiscal 2009 mainly due to decreases in gains on sales of securities of $9.1 million and $595,000 fair value loss on interest rate caps. Non-interest expense decreased $776,000 or 3.6%, to $20.7 million for the three months ended June 30, 2010, compared to $21.5 million for the same period in the prior year primarily due to declines in FDIC insurance premium assessments and refund of expenses related to debit card processing.

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