Provident New York Bancorp Reports Operating Results (10-Q)
Provident New York Bancorp has a market cap of $362.4 million; its shares were traded at around $9.28 with a P/E ratio of 14.7 and P/S ratio of 2.1. The dividend yield of Provident New York Bancorp stocks is 2.6%. 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, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:For the six months ended March 31, 2010, net income was $10.3 million or $0.27 per diluted share, compared to $11.8 million or $0.30 per diluted share for the same period ended March 31, 2009. Net interest income of $45.8 million decreased $2.9 million from the same period in the prior year. Provision for loan losses was $5.0 million, down from $9.6 million in the same period of the prior year. Gains on sales of securities totaled $4.3 million as the Company continues to monetize a portion of the appreciation in the portfolio compared to $6.4 million for the six months ended March 31, 2009. Non interest income decreased $2.7 million due mostly 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 and FDIC assessments.
Total assets as of March 31, 2010 were $2.9 billion, a decrease of $85.9 million or 2.8% compared to September 30, 2009 levels. The decrease in assets is primarily due to a $122.6 million decrease in cash and due from banks as a result of a large deferred cash letter in the amount of $102.1 million received on September 30, 2009. Net loans decreased $36.2 million to $1.64 billion from September 30, 2009. Partially offsetting these decreases was an increase in securities of $55.5 million, as the company invested excess cash in the investment portfolio. Other assets increased $14.8 million due mostly to an increase in prepaid FDIC insurance as well as an increase in the Company s deferred tax assets.
Net Loans as of March 31, 2010 were $1.64 billion, down $36.2 million from September 30, 2009. Acquisition, Development and Construction loans (“ADC”) increased by $11.7 million, or 5.8%, over balances at September 30, 2009, primarily due to activity on newly approved loans. Commercial real estate and commercial business loans declined by $12.0 million, or 1.5%, from September 30, 2009 balances. Consumer loans decreased by $7.7 million, or 3.0%, during the six month period ended March 31, 2010, while residential mortgage loans decreased by $27.9 million or 6.1% primarily due to new conforming fixed rate loan originations of $23.9 million being sold in the secondary market. Total loan originations were $221.6 million for the six months ended March 31, 2010 and repayments were $229.3 million. While loan demand remains weak due to the economic slowdown, commercial loan originations during the six months ending March 31, 2010 were $119.0 million compared to $102.9 million for the six months ended March 31, 2009.
Total securities increased by $55.5 million, or 6.3%, to $932.7 million at March 31, 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 $54.5 million primarily due to sales of $165.0 million and pay downs of $41.2 million, partially offset by purchases totaling $152.7 million. US Treasury notes increased $65.0 million and U.S. Government federal agency securities increased $29.3 million. The Company owns private label CMO s at amortized cost of $10.1 million and a carrying value of $9.4 million. See note six to the consolidated financial statements for further discussion on determination of fair value for these securities.
Deposits as of March 31, 2010 were $2.01 billion, a decrease of $75.3 million, or 3.6%, 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 grow by $7.4 million from $570.2 million to $577.6 million at March 31, 2010. Other categories showing major changes were as follows: savings accounts increased $26.1 million, money market accounts increased $60.7 million and certificates of deposits decreased $13.2 million over September 30, 2009 balances.
Net income for the three months ended March 31, 2010 was $4.2 million, a decrease of $1.4 million compared to $5.5 million for the same period in fiscal 2009. Excluding net securities gains and the fair value adjustment of interest rate caps earnings was $0.09 per diluted share for the three months ended March 31, 2010 compared to $0.05 for the same period in fiscal 2009. Net interest income before provision for loan losses for the three months ended March 31, 2010, decreased by $701,000 or 2.3%, to $22.9 million, compared to $23.6 million for the same period in the prior year. The provision for loan losses for the three months ended March 31, 2010 was $2.5 million, a decrease of $4.6 million, compared to $7.1 million for the same period in the prior year. Net interest margin on a tax equivalent basis for the three months ended March 31, 2010, decreased 4 basis points compared to the same period last year from 3.80% to 3.76%. Non-interest income for the three months ended March 31, 2010, was $6.1 million, a decrease of $5.0 million, compared to $11.1 million for the same period in fiscal 2009 due to decreases in gains on sales of securities of $4.2 million and $616,000 fair value loss on interest rate caps. Non-interest expense increased $1.1 million, or 5.5%, to $21.2 million for the three months ended March 31, 2010, compared to $20.1 million for the same period in the prior year primarily due to increased medical and pension expense, FDIC insurance and occupancy expense.
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