Provident New York Bancorp (PBNY) in Montebello, N.Y., reported strong earnings in the quarter that ended Sept. 30 thanks to loan growth and a major decrease in merger-related expenses.
The $4 billion-asset Provident posted a profit of $5.3 million, up 130% from the same quarter in 2012. At 12 cents, earnings per share were two cents lower than the estimates of analysts polled by Bloomberg.
The company's net interest income rose 12%, to $28.1 million, primarily because of higher average loan volumes. Provident attributed a $1.4 million interest expense to the $100 million senior notes offering connected to its pending merger with Sterling Bancorp (STL). The offering was completed in July. Provident's net interest margin fell 15 basis points, to 3.23%.
Provident's noninterest income dropped 26%, to $6.6 million. The company attributed the decline to a 43% decrease in net gain on sales of securities as well as falling revenue from investment management and title insurance fees.
Noninterest expenses plummeted 61%, to $23.4 million, thanks largely to an 86% million decrease in merger-related expenses connected to the company's acquisition of Gotham Bank in 2012.
Improved credit quality allowed Provident to shave 23% from its loan-loss provision, which fell to $2.7 million. Net chargeoffs fell 21%, to $2.2 million.
Provident's $344 million deal to buy Sterling Bancorp in New York City is expected to close Thursday. Sterling has $2.7 billion of assets.