STERLING BANCORP - FORM 8-K/A - EX-99.2 - UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET OF PROVIDENT NEW YORK

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8-K/A - FORM 8-K AMENDMENT NO. 1 - STERLING BANCORP	d428181d8ka.htm
EX-99.1 - UNAUDITED FINANCIAL STATEMENTS OF GOTHAM BANK OF NEW YORK AS OF JUNE 30, 2012 - STERLING BANCORP	d428181dex991.htm

Exhibit 99.2

PRO FORMA FINANCIAL INFORMATION

PROVIDENT NEW YORK BANCORP AND GOTHAM BANK OF NEW YORK

Unaudited Pro Forma Consolidated Condensed Balance Sheet and Statements of Income

The following unaudited pro forma consolidated condensed financial statements of Provident New York Bancorp (the “Company”) and Gotham Bank of New York (“Gotham”) have been prepared to give effect to the acquisition of Gotham by the Company pursuant to the terms of an Agreement and Plan of Merger, dated as of January 17, 2012, by and between Provident Bank and Gotham. At the closing on August 10, 2012, Gotham was merged with and into Provident Bank, with Provident Bank as the surviving entity. The unaudited pro forma consolidated condensed balance sheet as of June 30, 2012, and the unaudited pro forma consolidated condensed statements of operations for the nine months ended June 30, 2012 and the year ended September 30, 2011 are presented herein to reflect the acquisition of Gotham.

The unaudited pro forma consolidated condensed balance sheet combines the unaudited consolidated condensed balance sheet of the Company as of June 30, 2012 and the unaudited balance sheet of Gotham as of June 30, 2012 and gives effect to (i) the acquisition as if it had been completed on June 30, 2012, including any adjustments to fair value required and (ii) the net proceeds from an offering of approximately $46 million of common stock consummated on August 7, 2012. The unaudited pro forma consolidated condensed statement of income for the nine months ended June 30, 2012 combines the unaudited historical results of the Company for the period presented and the unaudited historical results of Gotham for the six months ended June 30, 2012, and the unaudited pro forma consolidated condensed statement of income for the year ended September 30, 2011 combines the audited historical results of the Company and the audited historical results of Gotham for the year ended December 31, 2011. The unaudited pro forma consolidated condensed statements of income give effect to the acquisition as if it had occurred on October 1, 2010.

The Company’s fiscal year end is September 30, 2011, and Gotham’s fiscal year end is December 31, 2011. The historical consolidated financial information of the Company and Gotham has been adjusted in the unaudited pro forma consolidated condensed financial statements to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the statements of income, expected to have a continuing impact on the combined results. The unaudited pro forma consolidated condensed financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The actual financial position or results of operations reported by the combined company in periods following the acquisition may differ significantly from those reflected in these unaudited pro forma condensed combined financial statements for a number of reasons, including but not limited to the impact and benefits of the acquisition, cost savings from operating efficiencies, synergies and the incremental costs incurred in successfully integrating and operating the Gotham business. There were no transactions between the Company and Gotham during the periods presented in the unaudited pro forma consolidated condensed financial statements that would need to be eliminated. The unaudited pro forma consolidated condensed financial statements presented are based upon available information and assumptions that the Company believes are reasonable. The unaudited pro forma consolidated condensed financial statements are based upon the respective historical and pro forma financial information of the Company and Gotham, and should be read in conjunction with:

•

the accompanying notes to the unaudited pro forma condensed combined financial statements;

•

the separate historical audited consolidated financial statements of the Company as of and for the year ended September 30, 2011 included in the Company’s Annual Report on Form 10-K for the year then ended;

•

the separate historical unaudited condensed consolidated financial statements of the Company as of and for the nine months ended June 30, 2012 included in the Company’s Quarterly Report on Form 10-Q for the nine months ended June 30, 2012;

•

the separate historical audited financial statements of Gotham as of and for the year ended December 31, 2011, included in Exhibit 99.2 to the Current Report on Form 8-K filed August 16, 2012; and

•

the separate historical unaudited condensed financial statements of Gotham as of and for the six months ended June 30, 2012, included in Exhibit 99.1 of this Current Report on Form 8-K/A.

These unaudited pro forma consolidated condensed financial statements are presented for informational purposes only and do not purport to represent what the financial position or results of operations would actually have been if the acquisition occurred as of the dates indicated or what such financial position or results will be for any future periods.

The unaudited pro forma condensed combined financial statements were prepared using the purchase method of accounting, with the Company treated as the acquiring entity. Accordingly, consideration paid by the Company to complete the acquisition of Gotham was allocated to Gotham’s assets and liabilities based upon their estimated fair values as of the date of completion of the acquisition. The pro forma purchase price adjustments are preliminary, subject to further adjustments as additional information becomes available along with the completion of the independent purchase price allocation and as additional analyses are performed and have been made solely for the purpose of providing the unaudited pro forma condensed combined financial information presented below.

The Company may incur additional costs associated with integrating the businesses of the Company and Gotham. The unaudited pro forma consolidated condensed financial statements do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from any integration activities. Therefore, the pro forma financial information, while helpful in illustrating the financial characteristics of the combined company under the assumptions set forth below, does not attempt to predict or suggest future results.

Provident New York Bancorp and Subsidiaries

PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET

JUNE 30, 2012

(unaudited, in thousands, except share and per share data)


	Provident NY Bancorp			Gotham Bank of NY			Capital Raise			Purchase Accounting			Pro Forma Consolidated Balance Sheet
Assets:
Cash and due from banks	$	111,400		$	152,437		$	46,000	a	$	(40,510	) d	$	269,327

Securities available for sale		714,200			67,571									781,770
Securities held to maturity		171,233												171,233

Total securities		885,433			67,571			—			—			953,004
Loans held for sale		5,369			—			—			—			5,369
Loans:
One- to four-family residential mortgage loans		357,943			—			—			—			357,943
Commercial real estate, commercial business		1,114,764			207,268			—			(3,971	) e		1,318,061
Acquisition, development and construction loans		165,125			—			—			—			165,125
Consumer loans		213,195			477			—			—			213,672

Total loans, gross		1,851,027			207,745			—			(3,971	)		2,054,801
Allowance for loan losses		(27,587	)		(1,910	)		—			1,910	f		(27,587	)

Total loans, net		1,823,440			205,835			—			(2,061	)		2,027,214
Federal Home Loan Bank stock, at cost		18,207			1,045			—			—			19,252
Accrued interest receivable		9,059			308			—			—			9,367
Premises and equipment, net		38,877			500			—			—			39,377
Goodwill		160,861			—			—			5,093	g		165,954
Other amortizable intangibles		3,718			—			—			4,818	h		8,536
Bank owned life insurance		58,506			—			—			—			58,506
Foreclosed properties		7,292			—			—			—			7,292
Other assets		27,878			1,794			—			825	i		30,497

Total assets	$	3,150,040		$	429,490		$	46,000		$	(31,835	)	$	3,593,695

Provident New York Bancorp and Subsidiaries

PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET

JUNE 30, 2012

(unaudited, in thousands, except share and per share data)


	Provident NY Bancorp			Gotham Bank of NY			Capital Raise			Purchase Accounting			Pro Forma Consolidated Balance Sheet
Liabilities:
Deposits
Demand deposits	$	504,312		$	80,528		$	—		$	—		$	584,840
NOW deposits		422,893			8,598			—			—			431,491

Total transaction accounts		927,205			89,126			—			—			1,016,331
Savings		476,349			4,543			—			—			480,892
Money market deposits		673,498			130,110			—			—			803,608
Certificates of deposit		255,039			140,756			—			357	j		396,152

Total deposits		2,332,091			364,535			—			357			2,696,983
Borrowings		314,154			30,000			—			784	k		344,938
Mortgage escrow funds		24,223			—			—			—			24,223
Other liabilities		34,902			1,979			—			—			36,881

Total liabilities		2,705,370			396,514			—			1,141			3,103,025

Common Stock		459			3,052			63	b		(3,052	) l		522
Additional paid in capital		357,620			2,747			45,937	c		(2,747	) l		403,557
Unallocated common stock held by employee stock ownership plan (“ESOP”)		(5,763	)		—			—						(5,763	)
Treasury stock		(90,328	)		(763	)		—			763	l		(90,328	)
Retained earnings		175,999			28,048			—			(28,048	) l		175,999
Accumulated other comprehensive income, net of taxes		6,683			(108	)		—			108	l		6,683

Stockholders’ equity		444,670			32,976			46,000			(32,976	)		490,670

Total liabilities and stockholders’ equity	$	3,150,040		$	429,490		$	46,000		$	(31,835	)	$	3,593,695

Provident New York Bancorp and Subsidiaries

PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(unaudited, in thousands, except share and per share data)

For the period ended June 30, 2012


	Nine Months ended June 30, 2012 Provident NY Bancorp			Six Months ended June 30, 2012 Gotham Bank			Pro Forma Adjustments			Pro Forma Combined Net Income
Interest and dividend income:
Loans and loan fees	$	66,614		$	5,050		$	423	e	$	72,087
Securities taxable		12,629			1,042			56	m		13,727
Securities non-taxable		4,954			—			—			4,954
Other earning assets		727			—			—			727

Total interest income		84,924			6,092			479			91,495
Interest expense:
Deposits		3,792			1,503			(90	) j		5,205
Borrowings		9,907			342			(351	) k		9,898

Total interest expense		13,699			1,845			(441	)		15,103

Net interest income		71,225			4,247			920			76,392
Provision for loan losses		7,112			(492	)		—			6,620

Net interest income after provision for loan losses		64,113			4,739			920			69,772
Non-interest income:
Deposit fees and service charges	$	8,312		$	120		$	—		$	8,432
Net gain on sales of securities		7,300			1,693			—			8,993
Other than temporary loss on securities		(44	)		—			—			(44	)
Title insurance fees		774			—			—			774
Bank owned life insurance		1,538			—			—			1,538
Gain on sale of loans		1,468			—			—			1,468
Investment management fees		2,367			—			—			2,367
Fair value gain (loss) on interest rate caps		(57	)		—			—			(57	)
Other		1,468			200			—			1,668

Total non-interest income		23,126			2,013			—			25,139
Non-interest expense:
Compensation and benefits		33,165			1,843			—			35,008
Stock-based compensation plans		885			—			—			885
Merger related expenses		997			—			—			997
Occupancy and office operations		10,498			539			—			11,037
Advertising and promotion		1,480			37			—			1,517
Professional fees		3,111			331			—			3,442
Data and check processing		2,087			—			—			2,087
Amortization of intangible assets		911			—			576	h		1,487
FDIC insurance and regulatory assessments		2,253			109			—			2,362
ATM/debit card expense		1,273			—			—			1,273
Foreclosed property expense		1,045			—			—			1,045
Other		5,468			306			—			5,774

Total non-interest expense		63,173			3,165			576			66,914

Income before income tax expense		24,066			3,587			344			27,997
Income tax expense		6,439			1,623			93	n		8,155

Net income	$	17,627		$	1,964		$	251		$	19,842

Basic earnings per common share	$	0.47		$	6.65					$	0.46
Diluted earnings per common share		0.47			6.65						0.46
Dividends declared		0.18			—						0.18
Weighted average common shares:
Basic		37,278,507			295,421			6,258,504			43,537,011

Provident New York Bancorp and Subsidiaries

PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(unaudited, in thousands, except share and per share data)

Period ended September 30, 2011


	Year Ended 9/30/2011 Provident NY Bancorp			Year Ended 12/31/2011 Gotham Bank		Purchase Acct. Adj.			Pro Forma Combined Net Income
Interest and dividend income:
Loans and loan fees	$	89,500		$	8,532	$	564	j	$	98,596
Securities taxable		14,493			5,392		75	m		19,960
Securities non-taxable		7,441			—		—			7,441
Other earning assets		1,180			82		—			1,262

Total interest income		112,614			14,006		639			127,259
Interest expense:
Deposits		6,104			2,877		(120	) j		8,861
Borrowings		15,220			1,199		(468	) k		15,951

Total interest expense		21,324			4,076		(588	)		24,812

Net interest income		91,290			9,930		1,227			102,447
Provision for loan losses		16,584			397		—			16,981

Net interest income after provision for loan losses		74,706			9,533		1,227			85,466
Non-interest income:
Deposit fees and service charges	$	10,811		$	224	$	—		$	11,035
Net gain on sales of securities		10,011			4,487		—			14,498
Other than temporary loss on securities		(278	)		—		—			(278	)
Title insurance fees		1,224			—		—			1,224
Bank owned life insurance		2,049			—		—			2,049
Gain on sale of loans		1,027			—		—			1,027
Investment management fees		3,080			—		—			3,080
Fair value gain (loss) on interest rate caps		(197	)		—		—			(197	)
Other		2,224			293		—			2,517

Total non-interest income		29,951			5,004		—			34,955
Non-interest expense:
Compensation and benefits		43,662			4,662		—			48,324
Stock-based compensation plans		1,162			—		—			1,162
Change in CEO		1,772			—		—			1,772
Restructuring charge (severance/branch relocation)		3,201			—		—			3,201
Occupancy and office operations		14,508			1,116		—			15,624
Advertising and promotion		3,328			—		—			3,328
Professional fees		4,389			452		—			4,841
Data and check processing		2,763			254		—			3,017
Amortization of intangible assets		1,426			—		768	h		2,194
FDIC insurance and regulatory assessments		2,910			290		—			3,200
ATM/debit card expense		1,584			—		—			1,584
Foreclosed property expense		1,171			—		—			1,171
Other		8,235			525		—			8,760

Total non-interest expense		90,111			7,299		768			98,178

Income before income tax expense		14,546			7,238		459			22,243
Income tax expense		2,807			3,281		87	n		6,175

Net income	$	11,739		$	3,957	$	372		$	16,068

Basic earnings per common share	$	0.31		$	13.39				$	0.37
Diluted earnings per common share		0.31			13.39					0.37
Dividends declared		0.24								0.24
Weighted average common shares:
Basic		37,452,596			295,421		6,258,504			43,711,100
Diluted		37,453,542			295,421		6,258,504			43,712,046

NOTES TO UNAUDITED PROFORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Basis of Pro Forma Presentation

The pro forma information related to the merger has been prepared in accordance with FASB ASC 805.

The following is an estimate of the purchase price for Gotham Bank of New York, the purchase price allocation and resulting goodwill based on the pro forma balance sheet, June 30, 2012:


	(dollars in thousands)
Cash Purchase Price	$	40,510

Gotham Bank of New York net assets		32,976
Loan discount		(3,971	)
Time deposit premium		(357	)
Borrowing premium		(784	)
Core deposit intangible		4,818
Allowance for Loan loss		1,910
Deferred taxes		825

Net assets acquired		35,417


Goodwill	$	5,093

The loan discount is scheduled to amortize as follows:


	Loan mark to market
	(dollars in thousands)

2012		423
2013		564
2014		564
2015		564
2016 and thereafter		2,856

The core deposit intangible is scheduled to amortize as follows:


	Core deposit Intangible
	(dollars in thousands)

2012		315
2013		732
2014		576
2015		516
2016 and thereafter		2,679

The premium on borrowings is scheduled to amortize as follows:


	Borrowings premium
	(dollars in thousands)

2012		298
2013		324
2014		162

Pro Forma Adjustments

The unaudited pro forma condensed consolidated financial statements have been adjusted for the following:

a	Cash received from issuance of 6,258,504 shares of common stock at a price of $7.35 per share

b	6,258,504 shares issued of common stock at $0.01 per share

c	Proceeds from issuance of 6,258,504 shares of common stock at a price of $7.35

d	Cash payment for the acquisition of Gotham Bank of New York

e	Credit discount on SOP 03-3 loans and fair market value discount on loan receivables be amortized over the average long of the loan portfolio of seven years

f	Elimination of the allowance for loan losses

g	Unidentifiable intangible net of deferred taxes

h	Identifiable intangible asset on core deposits amortized on an accelerated basis usine 10 year life

i	Deferred tax adjustment for purchase accounting

j	Time deposit premium amortized over the average life of three years

k	Borrowing premium amortized on a straightline basis over the average life of 1.75 years

l	Elimination of net assets of Gotham Bank of NY

m	Excess cash from capital raise invested at average yield of 1.5%

n	Tax effect calculated at Provident Bank’s effective tax rate

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