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

December 14, 2012 | About:
10qk

10qk

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Provident New York Bancorp (PBNY) filed Annual Report for the period ended 2012-09-30.

Provident New York Bancorp has a market cap of $400 million; its shares were traded at around $9.17 with a P/E ratio of 19.7 and P/S ratio of 2.7. The dividend yield of Provident New York Bancorp stocks is 2.7%. Provident New York Bancorp had an annual average earning growth of 5.5% over the past 10 years.

Highlight of Business Operations:

Interest Income. Interest income on a tax equivalent basis for the year ended September 30, 2012 increased to $100.0 million, a increase of $4.7 million, or 4.9 %, compared to the prior year. Average interest-earning assets for the year ended September 30, 2012 were $2.8 billion, an increase of $234.2 million, or 9.0%, over average interest-earning assets for the year ended September 30, 2011. Average loan balances increased by $140.8 million, average balances at the Federal Reserve Bank increased $37.3 million and average balances of other earning assets decreased by $2.0 million, primarily FHLB stock. On a tax-equivalent basis, average yields on interest earning assets decreased by 30 basis points to 4.17% for the year ended September 30, 2012, from 4.47% for the year ended September 30, 2011. The primary reasons for the decrease in asset yields are declines in general market interest rates on new lending activity, and the sale of securities with subsequent reinvestment at lower yields.

Non-interest income was $32.2 million for the fiscal year ended September 30, 2012 compared to $29.9 million at September 30, 2011. Income on securities sales, deposit fees and service charges, investment management fees, net increases in the cash surrender value of bank-owned life insurance (“BOLI”) contracts, and net gains on the sale of loans made up the majority of non interest income. During the year ended September 30, 2012, the Company recorded gains on sales of investment securities totaling $10.5 million compared to $10.0 million for the prior year. Deposit fees and service charges increased by $566,000, or 5.24%. During fiscal 2012 the Company originated and sold $80.6 million in residential mortgage loans and recorded $1.9 million in gains compared to $49.8 million in loans sold with $1.0 million in gains at September 30, 2011.

Interest Income. Interest income on a tax equivalent basis for the year ended September 30, 2011 decreased to $116.6 million, a decrease of $7.3 million, or 5.9%, compared to the prior year. The decrease was primarily due to declines in general market interest rates on new lending activity, impact of loans being classified as non accrual, sales of taxable securities in which gains of $9.7 million were realized and the proceeds reinvested at lower rates. Average interest-earning assets for the year ended September 30, 2011 were $2.6 billion, an increase of $29.7 million, or 1.2%, over average interest-earning assets for the year ended September 30, 2010. Average loan balances increased by $9.3 million, average balances at the Federal Reserve Bank decreased $6.0 million and average balances of other earning assets decreased by $4.1 million, primarily FHLB stock. On a tax-equivalent basis, average yields on interest earning assets decreased by 33 basis points to 4.47% for the year ended September 30, 2011, from 4.80% for the year ended September 30, 2010. Loan activity, the sale of securities with subsequent reinvestment and lower loan balances were the primary reasons for the decrease in asset yields.

Provision for Loan Losses. We recorded $16.6 million in loan loss provisions for the year ended September 30, 2011 compared to $10.0 million in the prior year, an increase of $6.6 million. We increased the provision due to increased net charge-offs, which were $19.5 million at September 30, 2011 compared to $9.2 million in the previous year. Our charge-offs were centered in our ADC portfolio, which incurred $8.9 million on average outstanding loans of $224.1 million. Of the $8.9 million in ADC charge-offs one relationship accounted for $7.5 million due to a dramatic reduction in sales activity in the second half of our fiscal year on a particular property which resulted in a reduction in collateral value. We incurred $5.6 million in net charge-offs in our CBL C&I portfolio on average outstanding of $84.3 million. The other significant component of net charge-offs was our residential mortgage portfolio, in which we recorded $2.1 million in net charge-offs as the foreclosure process has extended on average to three or more years, home prices have continued to be weak, and taxes continue to accrue. We sold a portion of these loans in foreclosure to reduce a portion of this exposure. We recorded a loss of $1.1 million included above, on the sale of $1.3 million in the book value of loans.

Non-interest income consists primarily of income on securities sales, deposit fees and service charges, net increases in the cash surrender value of bank-owned life insurance (“BOLI”) contracts, title insurance fees and investment management fees. Non-interest income was $30.0 million for the fiscal year ended September 30, 2011 compared to $27.2 million at September 30, 2010. During the year ended September 30, 2011, the Company recorded gains on sales of investment securities totaling $10.0 million compared to $8.2 million for the prior year. Deposit fees and service charges decreased by $417,000, or 3.71%. Title insurance

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