Provident Financial Services, Inc. (NYSE:PFS) (the “Company”)
reported net income of $39.2 million, or $0.53 per basic and
diluted share for the three months ended June 30, 2022, as compared
to $44.0 million, or $0.58 per basic and diluted share, for the
three months ended March 31, 2022 and $44.8 million, or $0.58 per
basic and diluted share, for the three months ended June 30, 2021.
For the six months ended June 30, 2022, net income totaled $83.2
million, or $1.11 per basic and diluted share, compared to $93.3
million, or $1.22 per basic and diluted share, for the six months
ended June 30, 2021.
Anthony J. Labozzetta, President and Chief
Executive Officer, commented, “Our solid second quarter results
were marked by record quarterly top-line revenue and reflected
strong commercial loan growth, net interest margin expansion, and
continued stable funding costs. Excluding Paycheck Protection
Program loans which continue to pay down through the forgiveness
process, our commercial loan portfolio grew at an annualized rate
of 17.3%. Our net interest margin expanded 19 basis points from the
trailing quarter as new loans were booked at higher market rates
and our existing adjustable rate loan portfolio repriced
favorably.” Labozzetta continued, “While our asset quality metrics
continued to improve during the quarter, we did record a $3.0
million provision for credit losses, primarily due to loan growth.
Our loan origination pipeline remains robust, and we continue to
leverage our solid core deposit funding base to support organic
asset growth, while mindful of macroeconomic headwinds posed by
high inflation levels.”
Declaration of Quarterly
Dividend
The Company’s Board of Directors declared a
quarterly cash dividend of $0.24 per common share payable on August
26, 2022, to stockholders of record as of the close of business on
August 12, 2022.
Performance Highlights for the Second
Quarter of 2022
- The Company’s total
commercial loan portfolio, excluding Paycheck Protection Program
("PPP") loans, increased $350.9 million, or 17.3% annualized, to
$8.48 billion at June 30, 2022, from $8.13 billion at
March 31, 2022.
- Net interest income
increased $4.9 million to $99.5 million for the three months ended
June 30, 2022, from $94.5 million for the trailing quarter as a
result of strong loan growth, favorable loan repricing and stable
funding costs.
- The net interest
margin increased 19 basis points to 3.21% for the quarter ended
June 30, 2022, from 3.02% for the trailing quarter.
- The average cost of
deposits, including non-interest bearing deposits, increased one
basis point to 0.20% for the quarter ended June 30, 2022,
compared with 0.19% for the trailing quarter.
- At June 30,
2022, the Company's loan pipeline, which consists of
work-in-process and loans approved pending closing, totaled $1.43
billion, with a weighted average interest rate of 4.98%.
- The Company
recorded a $3.0 million provision for credit losses for the quarter
ended June 30, 2022, compared to a $6.4 million negative
provision for the trailing quarter. The provision for credit losses
in the quarter was largely a function of an increase in total loans
outstanding and the relative change in the economic outlook,
partially offset by a continued improvement in the Company's asset
quality.
- Asset quality
improved as non-performing loans at June 30, 2022 declined
$3.9 million to $40.4 million, or 0.40% of total loans, from $44.3
million, or 0.46% of total loans, at March 31, 2022.
- Annualized returns
on average assets, average equity and average tangible equity were
1.16%, 9.83% and 13.82%, respectively for the three months ended
June 30, 2022, compared with 1.30%, 10.57% and 14.58%, respectively
for the trailing quarter.
- The Company's
annualized pre-tax, pre-provision ("PTPP") return on average
assets(1) was 1.65% for the quarter ended June 30, 2022,
compared to 1.49% for the quarter ended March 31, 2022.
Results of Operations
Three months ended June 30, 2022
compared to the three months ended March 31, 2022
For the three months ended June 30, 2022, net
income was $39.2 million, or $0.53 per basic and diluted share,
compared to net income of $44.0 million, or $0.58 per basic and
diluted share, for the three months ended March 31, 2022.
Net Interest Income and Net Interest
Margin
Net interest income increased $4.9 million to
$99.5 million for the three months ended June 30, 2022, from $94.5
million for the trailing quarter. The improvement in net interest
income was largely due to the period-over-period increase in the
net interest margin as excess liquidity and cash flow from
investment securities were invested in higher-yielding loans,
combined with the upward repricing of certain adjustable rate
loans. This was partially offset by a reduction in the fees related
to the forgiveness of PPP loans. For the three months ended June
30, 2022, fees related to the forgiveness of PPP loans, which are
recognized in interest income, decreased $912,000 to $192,000,
compared to $1.1 million for the trailing quarter.
The Company’s net interest margin increased 19
basis points to 3.21% for the quarter ended June 30, 2022,
from 3.02% for the trailing quarter. The weighted average yield on
interest-earning assets for the quarter ended June 30, 2022
increased 20 basis points to 3.43%, compared to the trailing
quarter. The weighted average cost of interest-bearing liabilities
for the quarter ended June 30, 2022 increased two basis points
to 0.31%, compared to the trailing quarter. The average cost of
interest-bearing deposits for the quarter ended June 30, 2022
increased two basis points to 0.27%, compared to 0.25% for the
trailing quarter. The average cost of total deposits, including
non-interest bearing deposits, was 0.20% for the quarter ended
June 30, 2022, compared to 0.19% for the trailing quarter. The
average cost of borrowed funds for the quarter ended June 30,
2022 was 0.84%, compared to 0.86% for the quarter ended
March 31, 2022.
Provision for Credit Losses
For the quarter ended June 30, 2022, the
Company recorded a $3.0 million provision for credit losses,
compared with a negative provision for credit losses of $6.4
million for the quarter ended March 31, 2022. The provision
for credit losses for the quarter ended June 30, 2022 was
largely a function of an increase in total loans outstanding and
the relative change in the economic outlook, partially offset by an
overall improvement in the Company's asset quality.
Non-Interest Income and
Expense
For the three months ended June 30, 2022,
non-interest income totaled $20.9 million, an increase of $784,000,
compared to the trailing quarter. Other income increased $752,000
to $1.9 million for the three months ended June 30, 2022, compared
to the trailing quarter, primarily due to an increase in net gains
on the sale of loans. Fee income increased $535,000 to $7.4 million
for the three months ended June 30, 2022, compared to the trailing
quarter, primarily due to increases in commercial loan prepayment
fees and non-deposit investment fee income, partially offset by a
decrease in debit card revenue. BOLI income increased $384,000
compared to the trailing quarter, to $1.6 million for the three
months ended June 30, 2022, primarily due to a benefit claim
recognized in the quarter, partially offset by lower equity
valuations. Partially offsetting these increases in non-interest
income, insurance agency income decreased $570,000 compared to the
trailing quarter, to $2.9 million for the three months ended June
30, 2022, mainly due to the receipt of contingent commissions in
the trailing quarter. Additionally, wealth management income
decreased $442,000 compared to the trailing quarter, to $7.0
million for the three months ended June 30, 2022, primarily due to
a decrease in the market value of assets under management.
Non-interest expense totaled $63.8 million for
the three months ended June 30, 2022, an increase of $2.0 million,
compared to $61.9 million for the trailing quarter. For the three
months ended June 30, 2022, the Company recorded a $1.0 million
negative provision for credit losses for off-balance sheet credit
exposures, compared to a $2.4 million negative provision for the
trailing quarter. The decreased negative provision was primarily
due to a decrease in line of credit utilization. Other operating
expenses increased $459,000 to $9.8 million for the three months
ended June 30, 2022, compared to the trailing quarter. The increase
in other operating expenses was primarily due to increases in
attorney fees and debit card expense. Compensation and benefits
expense increased $370,000 to $37.4 million for the three months
ended June 30, 2022, compared to $37.1 million for the trailing
quarter. The increase in compensation and benefit expense was
primarily attributable to increases in stock-based compensation,
the accrual for incentive compensation and salary expense,
partially offset by a decrease in payroll taxes. These increases in
non-interest expense were partially offset by an $851,000 decrease
in net occupancy expense to $8.5 million for the three months ended
June 30, 2022, compared to the trailing quarter, mainly due to
seasonal decreases and reduced rent expense.
The Company’s annualized adjusted non-interest
expense as a percentage of average assets(1) was 1.92% for the
quarter ended June 30, 2022, compared to 1.90% for the
trailing quarter. The efficiency ratio (adjusted non-interest
expense divided by the sum of net interest income and non-interest
income)(1) was 53.83% for the three months ended June 30,
2022, compared to 56.05% for the trailing quarter.
Income Tax Expense
For the three months ended June 30, 2022,
the Company's income tax expense was $14.3 million with an
effective tax rate of 26.8%, compared with income tax expense of
$15.2 million with an effective tax rate of 25.7% for the trailing
quarter. The decrease in tax expense for the three months ended
June 30, 2022, compared with the trailing quarter was largely
due to a decrease in taxable income, while the increase in the
effective tax rate for the three months ended June 30, 2022,
compared with the trailing quarter was largely due to an increase
in the proportion of income derived from taxable sources.
Three months ended June 30, 2022
compared to the three months ended June 30, 2021
For the three months ended June 30, 2022, net
income was $39.2 million, or $0.53 per basic and diluted share,
compared to net income of $44.8 million, or $0.58 per basic and
diluted share, for the three months ended June 30, 2021.
Net Interest Income and Net Interest
Margin
Net interest income increased $8.6 million to
$99.5 million for the three months ended June 30, 2022, from $90.9
million for same period in 2021. The increase in net interest
income for the three months ended June 30, 2022, was primarily
driven by growth in average earning assets, largely due to
increases in available for sale debt securities and average loans
outstanding, funded by growth in lower-costing core deposits and
the reinvestment of cash proceeds from PPP loan satisfactions. This
was partially offset by a reduction in the fees related to the
forgiveness of PPP loans. For three months ended June 30, 2022,
fees related to the forgiveness of PPP loans decreased $2.7 million
to $192,000, compared to $2.9 million for the three months ended
June 30, 2021.
The Company’s net interest margin increased 22
basis points to 3.21% for the quarter ended June 30, 2022,
from 2.99% for the same period last year. The weighted average
yield on interest-earning assets for the quarter ended
June 30, 2022 increased 12 basis points to 3.43%, compared to
3.31% for the quarter ended June 30, 2021. The weighted
average cost of interest bearing liabilities decreased 13 basis
points for the quarter ended June 30, 2022 to 0.31%, compared
to 0.44% for the second quarter of 2021. The average cost of
interest bearing deposits for the quarter ended June 30, 2022
was 0.27%, compared to 0.34% for the same period last year. Average
non-interest bearing demand deposits increased $298.1 million to
$2.78 billion for the quarter ended June 30, 2022, compared to
$2.48 billion for the quarter ended June 30, 2021. The average
cost of total deposits, including non-interest bearing deposits,
was 0.20% for the quarter ended June 30, 2022, compared with
0.26% for the quarter ended June 30, 2021. The average cost of
borrowed funds for the quarter ended June 30, 2022 was 0.84%,
compared to 1.18% for the same period last year.
Provision for Credit Losses
For the quarter ended June 30, 2022, the
Company recorded a $3.0 million provision for credit losses,
compared with a negative provision for credit losses of $10.7
million for the quarter ended June 30, 2021. The increase in
the provision was largely a function of the relative change in the
economic outlook and the significant favorable impact of the
post-pandemic recovery in the prior year period, partially offset
by an overall improvement in the Company's asset quality.
Non-Interest Income and
Expense
Non-interest income totaled $20.9 million for
the quarter ended June 30, 2022, a decrease of $224,000,
compared to the same period in 2021. Fee income decreased $1.0
million to $7.4 million for the three months ended June 30, 2022,
compared to the same period in 2021, primarily due to decreases in
debit card revenue and commercial loan prepayment fees, partially
offset by an increase in deposit related fees. The decrease in
debit card revenue was largely attributable to the interchange
transaction fee limitation imposed by the Durbin amendment, which
became effective for the Company in the third quarter of 2021.
Wealth management income decreased $835,000 to $7.0 million for the
three months ended June 30, 2022, compared to the same period in
2021, primarily due to a decrease in the market value of assets
under management. Partially offsetting these decreases in
non-interest income, other income increased $1.5 million to $1.9
million for the three months ended June 30, 2022, compared to the
quarter ended June 30, 2021, primarily due to increases in
fees on loan-level interest rate swap transactions and net gains on
the sale of loans.
For the three months ended June 30, 2022,
non-interest expense totaled $63.8 million, an increase of $1.1
million, compared to the three months ended June 30, 2021.
Compensation and benefits expense increased $2.6 million to $37.4
million for three months ended June 30, 2022, compared to $34.9
million for the same period in 2021. The increase was principally
due to increases in stock-based compensation, salary expense and
the accrual for incentive compensation, partially offset by a
decline in employee medical expenses. Other operating expenses
increased $780,000 to $9.8 million for the three months ended June
30, 2022, compared to the same period in 2021, principally due to
an increase in business development expenses. Net occupancy
expenses increased $572,000 to $8.5 million for the three months
ended June 30, 2022, compared to the same period in 2021, largely
due to increases in rent, depreciation and maintenance expenses,
while FDIC insurance decreased $220,000 due to a decrease in the
insurance assessment rate, partially offset by an increase in total
assets subject to assessment. Partially offsetting these increases
in non-interest expense, credit loss expense for off-balance sheet
credit exposures decreased $3.0 million to a negative provision of
$1.0 million for the three months ended June 30, 2022, compared to
a $2.1 million provision for the same period in 2021. The decrease
was primarily the result of a decrease in the pipeline of loans
approved and awaiting closing, combined with an increase in line of
credit utilization, partially offset by an increase in loss
factors.
The Company’s annualized adjusted non-interest
expense as a percentage of average assets(1) was 1.92% for the
quarter ended June 30, 2022, compared to 1.84% for the same
period in 2021. The efficiency ratio (adjusted non-interest expense
divided by the sum of net interest income and non-interest
income)(1) was 53.83% for the three months ended June 30, 2022
compared to 54.12% for the same respective period in 2021.
Income Tax Expense
For the three months ended June 30, 2022, the
Company's income tax expense was $14.3 million with an effective
tax rate of 26.8%, compared with $15.3 million with an effective
tax rate of 25.4% for the three months ended June 30, 2021. The
decrease in tax expense for the three months ended June 30, 2022,
compared with the same period last year was largely the result of a
decrease in taxable income, while the increase in the effective tax
rate for the three months ended June 30, 2022, compared with the
three months ended June 30, 2021, was largely due to an increase in
the proportion of income derived from taxable sources.
Six Months Ended June 30, 2022
compared to the six months ended June 30, 2021
For the six months ended June 30, 2022, net
income totaled $83.2 million, or $1.11 per basic and diluted share,
compared to net income of $93.3 million, or $1.22 per basic and
diluted share, for the six months ended June 30, 2021.
Net Interest Income and Net Interest
Margin
Net interest income increased $13.1 million to
$194.0 million for the six months ended June 30, 2022, from $180.9
million for same period in 2021. The increase in net interest
income for the six months ended June 30, 2022, was primarily driven
by a reduction in funding costs, growth in lower-costing core and
non-interest bearing deposits and an increase in available for sale
debt securities. Net interest income was further enhanced by the
favorable repricing of adjustable rate loans and an increase in
rates on new loan originations. This was partially offset by a
reduction in fees related to the forgiveness of PPP loans. For the
six months ended June 30, 2022, fees related to the forgiveness of
PPP loans decreased $3.1 million to $1.3 million, compared to $4.4
million for the six months ended June 30, 2021.
For the six months ended June 30, 2022, the net
interest margin increased nine basis points to 3.11%, compared to
3.02% for the six months ended June 30, 2021. The weighted average
yield on interest earning assets declined three basis points to
3.33% for the six months ended June 30, 2022, compared to 3.36% for
the six months ended June 30, 2021, while the weighted average cost
of interest bearing liabilities decreased 16 basis points to 0.30%
for the six months ended June 30, 2022, compared to 0.46% for the
same period last year. The average cost of interest bearing
deposits decreased 10 basis points to 0.26% for the six months
ended June 30, 2022, compared to 0.36% for the same period last
year. Average non-interest bearing demand deposits increased $352.6
million to $2.78 billion for the six months ended June 30, 2022,
compared with $2.43 billion for the six months ended June 30, 2021.
The average cost of total deposits, including non-interest bearing
deposits, was 0.19% for the six months ended June 30, 2022,
compared with 0.28% for the six months ended June 30, 2021. The
average cost of borrowings for the six months ended June 30, 2022
was 0.85%, compared to 1.15% for the same period last year.
Provision for Credit Losses
For the six months ended June 30, 2022, the
Company recorded a $3.4 million negative provision for credit
losses related to loans, compared with a negative provision for
credit losses of $25.7 million for the six months ended June 30,
2021. The decrease in the period-over-period provision benefit was
largely a function of the significant favorable impact of the
post-pandemic recovery resulting in a larger negative provision
taken in the prior year period, combined with growth in the loan
portfolio and the satisfaction of PPP loans.
Non-Interest Income and
Expense
For the six months ended June 30, 2022,
non-interest income totaled $41.1 million, a decrease of $1.7
million, compared to the same period in 2021. Fee income decreased
$1.3 million to $14.3 million for the six months ended June 30,
2022, compared to the same period in 2021, primarily due to a
decrease in debit card revenue, which was curtailed by the Durbin
amendment, partially offset by an increase in deposit related fees.
BOLI income decreased $1.3 million to $2.7 million for the six
months ended June 30, 2022, compared to the same period in 2021,
primarily due to lower equity valuations and a decrease in benefit
claims recognized. Wealth management income decreased $504,000 to
$14.5 million for the six months ended June 30, 2022, compared to
the same period in 2021, primarily due to a decrease in the market
value of assets under management and a decrease in tax preparation
fees, partially offset with new business generation. Partially
offsetting these decreases in non-interest income, other income
increased $864,000 to $3.1 million for the six months ended June
30, 2022, compared to $2.2 million for the same period in 2021,
mainly due to an increase in fees on loan-level interest rate swap
transactions. Also, insurance agency income totaled $6.3 million,
an increase of $694,000 for the six months ended June 30, 2022,
compared to the same period in 2021, largely due to an increase in
contingent commissions.
Non-interest expense totaled $125.7 million for
the six months ended June 30, 2022, an increase of $1.2 million,
compared to $124.6 million for the six months ended June 30, 2021.
Compensation and benefits expense increased $4.3 million to $74.5
million for the six months ended June 30, 2022, compared to $70.2
million for the six months ended June 30, 2021, primarily due to
increases in stock-based compensation, salary expense and the
accrual for incentive compensation, partially offset by a decrease
in employee benefit expenses. Data processing expense increased
$1.2 million to $11.0 million for the six months ended June 30,
2022, mainly due to increases in software subscription expense and
online banking costs. Additionally, net occupancy expense increased
$602,000 to $17.8 million for the six months ended June 30, 2022,
compared to the same period in 2021, mainly due to increases in
rent, depreciation and maintenance expenses, a portion of which
were attributable to the Company's new administrative offices.
Partially offsetting these increases, credit loss expense for
off-balance sheet credit exposures decreased $4.5 million to a
negative provision of $3.4 million for the six months ended June
30, 2022, compared to a $1.2 million provision for the same period
last year. The decrease was primarily the result of a decrease in
the pipeline of loans approved and awaiting closing, combined with
an increase in line of credit utilization, partially offset by an
increase in loss factors. FDIC insurance decreased $785,000 for the
six months ended June 30, 2022, primarily due to a decrease in the
insurance assessment rate, partially offset by an increase in total
assets subject to assessment.
Income Tax Expense
For the six months ended June 30, 2022, the
Company's income tax expense was $29.6 million with an effective
tax rate of 26.2%, compared with $31.5 million with an effective
tax rate of 25.2% for the six months ended June 30, 2021. The
decrease in tax expense for the six months ended June 30, 2022,
compared with the same period last year was largely the result of a
decrease in taxable income, while the increase in the effective tax
rate for the six months ended June 30, 2021, compared with the with
the prior year was largely due to an increase in the proportion of
income derived from taxable sources.
Asset Quality
The Company’s total non-performing loans at
June 30, 2022 were $40.4 million, or 0.40% of total loans,
compared to $44.3 million, or 0.46% of total loans at
March 31, 2022 and $48.0 million, or 0.50% of total loans at
December 31, 2021. The $3.9 million decrease in non-performing
loans at June 30, 2022, compared to the trailing quarter,
consisted of a $2.0 million decrease in non-performing residential
mortgage loans, a $1.8 million decrease in non-performing
commercial loans, a $906,000 decrease in non-performing commercial
mortgage loans, a $207,000 decrease in non-performing consumer
loans and a $1.1 million increase in non-performing construction
loans. At June 30, 2022, impaired loans totaled $45.1 million
with related specific reserves of $1.5 million, compared with
impaired loans totaling $48.3 million with related specific
reserves of $2.0 million at March 31, 2022. At
December 31, 2021, impaired loans totaled $52.3 million with
related specific reserves of $4.3 million.
At June 30, 2022, the Company’s allowance
for credit losses related to the loan portfolio was 0.79% of total
loans, compared to 0.79% and 0.84% at March 31, 2022 and
December 31, 2021, respectively. The allowance for credit
losses decreased $1.7 million to $79.0 million at June 30,
2022 from $80.7 million at December 31, 2021. The decrease in
the allowance for credit losses on loans at June 30, 2022
compared to December 31, 2021 was due to a $3.4 million
negative provision for credit losses, partially offset by net
recoveries of $1.7 million. The reduction in the allowance for
credit losses on loans was primarily the result of an overall
improvement in asset quality and an improved economic forecast.
The following table sets forth accruing past due
loans and non-accrual loans on the dates indicated, as well as
certain asset quality ratios.
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
NumberofLoans |
|
PrincipalBalanceof
Loans |
|
NumberofLoans |
|
PrincipalBalanceof
Loans |
|
NumberofLoans |
|
PrincipalBalanceof
Loans |
|
(Dollars in thousands) |
Accruing past due loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 to 59 days past due: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans |
9 |
|
|
$ |
853 |
|
|
18 |
|
|
$ |
2,385 |
|
|
26 |
|
|
$ |
7,229 |
|
Commercial mortgage loans |
2 |
|
|
|
276 |
|
|
2 |
|
|
|
282 |
|
|
4 |
|
|
|
720 |
|
Multi-family mortgage loans |
— |
|
|
|
— |
|
|
1 |
|
|
|
816 |
|
|
— |
|
|
|
— |
|
Construction loans |
— |
|
|
|
— |
|
|
3 |
|
|
|
1,659 |
|
|
— |
|
|
|
— |
|
Total mortgage loans |
11 |
|
|
|
1,129 |
|
|
24 |
|
|
|
5,142 |
|
|
30 |
|
|
|
7,949 |
|
Commercial loans |
5 |
|
|
|
1,040 |
|
|
9 |
|
|
|
4,019 |
|
|
11 |
|
|
|
7,229 |
|
Consumer loans |
11 |
|
|
|
343 |
|
|
15 |
|
|
|
571 |
|
|
24 |
|
|
|
649 |
|
Total 30 to 59 days past due |
27 |
|
|
$ |
2,512 |
|
|
48 |
|
|
$ |
9,732 |
|
|
65 |
|
|
$ |
15,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60 to 89 days past due: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans |
9 |
|
|
$ |
1,752 |
|
|
7 |
|
|
$ |
1,354 |
|
|
7 |
|
|
$ |
1,131 |
|
Commercial mortgage loans |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
2 |
|
|
|
3,960 |
|
Multi-family mortgage loans |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
Construction loans |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
Total mortgage loans |
9 |
|
|
|
1,752 |
|
|
7 |
|
|
|
1,354 |
|
|
9 |
|
|
|
5,091 |
|
Commercial loans |
3 |
|
|
|
41 |
|
|
3 |
|
|
|
318 |
|
|
5 |
|
|
|
1,289 |
|
Consumer loans |
5 |
|
|
|
169 |
|
|
3 |
|
|
|
90 |
|
|
7 |
|
|
|
228 |
|
Total 60 to 89 days past due |
17 |
|
|
|
1,962 |
|
|
13 |
|
|
|
1,762 |
|
|
21 |
|
|
|
6,608 |
|
Total accruing past due loans |
44 |
|
|
$ |
4,474 |
|
|
61 |
|
|
$ |
11,494 |
|
|
86 |
|
|
$ |
22,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans |
21 |
|
|
$ |
3,401 |
|
|
29 |
|
|
$ |
5,396 |
|
|
28 |
|
|
$ |
6,072 |
|
Commercial mortgage loans |
15 |
|
|
|
18,627 |
|
|
14 |
|
|
|
19,533 |
|
|
14 |
|
|
|
16,887 |
|
Multi-family mortgage loans |
2 |
|
|
|
2,040 |
|
|
2 |
|
|
|
2,053 |
|
|
1 |
|
|
|
439 |
|
Construction loans |
3 |
|
|
|
3,466 |
|
|
2 |
|
|
|
2,366 |
|
|
2 |
|
|
|
2,365 |
|
Total mortgage loans |
41 |
|
|
|
27,534 |
|
|
47 |
|
|
|
29,348 |
|
|
45 |
|
|
|
25,763 |
|
Commercial loans |
32 |
|
|
|
11,950 |
|
|
39 |
|
|
|
13,793 |
|
|
51 |
|
|
|
20,582 |
|
Consumer loans |
16 |
|
|
|
964 |
|
|
19 |
|
|
|
1,171 |
|
|
17 |
|
|
|
1,682 |
|
Total non-accrual loans |
89 |
|
|
$ |
40,448 |
|
|
105 |
|
|
$ |
44,312 |
|
|
113 |
|
|
$ |
48,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans to total loans |
|
|
|
|
0.40 |
% |
|
|
|
|
|
0.46 |
% |
|
|
|
|
|
0.50 |
% |
Allowance for loan losses to total non-performing loans |
|
|
|
|
195.35 |
% |
|
|
|
|
|
172.13 |
% |
|
|
|
|
|
168.11 |
% |
Allowance for loan losses to total loans |
|
|
|
|
0.79 |
% |
|
|
|
|
|
0.79 |
% |
|
|
|
|
|
0.84 |
% |
At June 30, 2022 and December 31,
2021, the Company held foreclosed assets of $9.1 million and $8.7
million, respectively. During the six months ended June 30, 2022,
there were two additions to foreclosed assets with an aggregate
carrying value of $625,000, one property sold with an aggregate
carrying value of $80,000 and a valuation charge of $200,000.
Foreclosed assets at June 30, 2022 consisted primarily of
commercial real estate. Total non-performing assets at
June 30, 2022 decreased $7.2 million to $49.5 million, or
0.36% of total assets, from $56.8 million, or 0.41% of total assets
at December 31, 2021.
Balance Sheet Summary
Total assets at June 30, 2022 were $13.72
billion, a $65.3 million decrease from December 31, 2021. The
decrease in total assets was primarily due to a $434.9 million
decrease in cash and cash equivalents and a $115.8 million
decrease in total investments, partially offset by a $410.8 million
increase in total loans.
The Company’s loan portfolio totaled $9.99
billion at June 30, 2022 and $9.58 billion at
December 31, 2021. The loan portfolio consists of the
following:
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
(Dollars in thousands) |
Mortgage loans: |
|
|
|
|
|
Residential |
$ |
1,180,967 |
|
|
$ |
1,194,613 |
|
|
$ |
1,202,638 |
|
Commercial |
|
4,136,344 |
|
|
|
3,937,216 |
|
|
|
3,827,370 |
|
Multi-family |
|
1,445,099 |
|
|
|
1,394,761 |
|
|
|
1,364,397 |
|
Construction |
|
728,024 |
|
|
|
699,415 |
|
|
|
683,166 |
|
Total mortgage loans |
|
7,490,434 |
|
|
|
7,226,005 |
|
|
|
7,077,571 |
|
Commercial loans |
|
2,192,009 |
|
|
|
2,131,326 |
|
|
|
2,188,866 |
|
Consumer loans |
|
322,711 |
|
|
|
316,589 |
|
|
|
327,442 |
|
Total gross loans |
|
10,005,154 |
|
|
|
9,673,920 |
|
|
|
9,593,879 |
|
Premiums on purchased loans |
|
1,405 |
|
|
|
1,482 |
|
|
|
1,451 |
|
Net deferred fees and unearned discounts |
|
(14,114 |
) |
|
|
(12,520 |
) |
|
|
(13,706 |
) |
Total loans |
$ |
9,992,445 |
|
|
$ |
9,662,882 |
|
|
$ |
9,581,624 |
|
Total PPP loans outstanding, which are included
in total commercial loans, decreased $78.2 million to $16.7 million
at June 30, 2022, from $94.9 million at December 31, 2021
due to the forgiveness of such loans as the program winds down.
Excluding the decrease in PPP loans, during the six months ended
June 30, 2022, the Company experienced net increases of $309.0
million in commercial mortgage loans, $81.3 million in commercial
loans, $80.7 million in multi-family loans and $44.9 million in
construction loans, partially offset by net decreases in
residential mortgage and consumer loans of $21.7 million and $4.7
million, respectively. Commercial loans, consisting of commercial
real estate, multi-family, commercial and construction loans,
represented 85.0% of the loan portfolio at June 30, 2022,
compared to 84.1% at December 31, 2021.
For the six months ended June 30, 2022, loan
funding, including advances on lines of credit, totaled $2.15
billion, compared with $1.67 billion for the same period in
2021.
At June 30, 2022, the Company’s unfunded
loan commitments totaled $2.06 billion, including commitments of
$980.3 million in commercial loans, $647.4 million in construction
loans and $138.4 million in commercial mortgage loans. Unfunded
loan commitments at December 31, 2021 and June 30, 2021 were
$2.05 billion and $2.16 billion, respectively.
The loan pipeline, consisting of work-in-process
and loans approved pending closing, totaled $1.43 billion at
June 30, 2022, compared to $1.09 billion and $1.70 billion at
December 31, 2021 and June 30, 2021, respectively.
Cash and cash equivalents were $277.5 million at
June 30, 2022, a $434.9 million decrease from
December 31, 2021, primarily as a result of decreases in short
term investments.
Total investments were $2.41 billion at
June 30, 2022, a $115.8 million decrease from
December 31, 2021. This decrease was primarily due to an
increase in unrealized losses on available for sale debt
securities, repayments of mortgage-backed securities and maturities
and calls of certain municipal and agency bonds, partially offset
by purchases of mortgage-backed and municipal securities.
Total deposits decreased $359.8 million during
the six months ended June 30, 2022, to $10.87 billion. Total
savings and demand deposit accounts decreased $333.9 million to
$10.21 billion at June 30, 2022, while total time deposits
decreased $25.9 million to $666.6 million at June 30, 2022.
The decrease in savings and demand deposits was largely
attributable to a $463.6 million decrease in interest bearing
demand deposits, as the Company shifted $360.0 million of brokered
demand deposits into lower-costing Federal Home Loan Bank of New
York ("FHLB") borrowings, partially offset by a $52.3 million
increase in non-interest bearing demand deposits, a $51.8 million
increase in savings deposits and a $25.5 million increase in money
market deposits. The decrease in time deposits was primarily due to
maturities of longer-term retail time deposits, partially offset by
the inflow of brokered time deposits.
Borrowed funds increased $375.7 million during
the six months ended June 30, 2022, to $1.00 billion. The increase
in borrowings for the period was largely due to the maturity and
replacement of brokered deposits into lower-costing FHLB
borrowings. Borrowed funds represented 7.3% of total assets at
June 30, 2022, an increase from 4.5% at December 31,
2021.
Stockholders’ equity decreased $111.8 million
during the six months ended June 30, 2022, to $1.59 billion,
primarily due to an increase in unrealized losses on available for
sale debt securities, dividends paid to stockholders and common
stock repurchases, partially offset by net income earned for the
period. For the three months ended June 30, 2022, common stock
repurchases totaled 760,466 shares at an average cost of $23.00 per
share. For the six months ended June 30, 2022, common stock
repurchases totaled 2,042,541 shares at an average cost of $23.23
per share, of which 15,457 shares, at an average cost of $23.48 per
share, were made in connection with withholding to cover income
taxes on the vesting of stock-based compensation. At June 30,
2022, approximately 1.1 million shares remained eligible for
repurchase under the current stock repurchase authorization. Book
value per share and tangible book value per share(1) at
June 30, 2022 were $21.09 and $14.94, respectively, compared
with $22.05 and $16.02, respectively, at December 31,
2021.
About the Company
Provident Financial Services, Inc. is the
holding company for Provident Bank, a community-oriented bank
offering "commitment you can count on" since 1839. Provident Bank
provides a comprehensive array of financial products and services
through its network of branches throughout northern and central New
Jersey, Bucks, Lehigh and Northampton counties in Pennsylvania, as
well as Queens and Nassau Counties in New York. The Bank also
provides fiduciary and wealth management services through its
wholly owned subsidiary, Beacon Trust Company and insurance
services through its wholly owned subsidiary, Provident Protection
Plus, Inc.
Post Earnings Conference
Call
Representatives of the Company will hold a
conference call for investors on Friday, July 29, 2022 at
10:00 a.m. Eastern Time to discuss the Company’s financial results
for the quarter ended June 30, 2022. The call may be accessed
by dialing 1-844-200-6205 (United States), 1-646-904-5544 (United
States Local), 1-833-950-0062 (Canada Toll Free), 1-226-828-7575
(Canada Local), or 1-929-526-1599 (All other locations). Speakers
will need to enter speaker access code (293159) before being met by
a live operator. Internet access to the call is also available
(listen only) at provident.bank by going to Investor Relations
and clicking on "Webcast."
Forward Looking Statements
Certain statements contained herein are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements may be
identified by reference to a future period or periods, or by the
use of forward-looking terminology, such as “may,” “will,”
“believe,” “expect,” “estimate,” "project," "intend," “anticipate,”
“continue,” or similar terms or variations on those terms, or the
negative of those terms. Forward-looking statements are subject to
numerous risks and uncertainties, including, but not limited to,
those set forth in Item 1A of the Company's Annual Report on Form
10-K, as supplemented by its Quarterly Reports on Form 10-Q, and
those related to the economic environment, particularly in the
market areas in which the Company operates, competitive products
and pricing, fiscal and monetary policies of the U.S. Government,
changes in accounting policies and practices that may be adopted by
the regulatory agencies and the accounting standards setters,
changes in government regulations affecting financial institutions,
including regulatory fees and capital requirements, changes in
prevailing interest rates, acquisitions and the integration of
acquired businesses, credit risk management, asset-liability
management, the financial and securities markets and the
availability of and costs associated with sources of liquidity.
In addition, the COVID-19 pandemic continues to
have an uncertain impact on the Company, its customers and the
communities it serves. Given its ongoing and dynamic nature,
including potential variants, it is difficult to predict the
continuing impact of the pandemic on the Company's business,
financial condition or results of operations. The extent of such
impact will depend on future developments, which remain highly
uncertain, including when the pandemic will be controlled and
abated, and the extent to which the economy can remain open.
The Company cautions readers not to place undue
reliance on any such forward-looking statements which speak only as
of the date made. The Company advises readers that the factors
listed above could affect the Company's financial performance and
could cause the Company's actual results for future periods to
differ materially from any opinions or statements expressed with
respect to future periods in any current statements. The Company
does not have any obligation to update any forward-looking
statements to reflect events or circumstances after the date of
this statement.
Footnotes
(1) Annualized pre-tax,
pre-provision return on average assets, tangible book value per
share, annualized return on average tangible equity, annualized
adjusted non-interest expense as a percentage of average assets and
the efficiency ratio are non-GAAP financial measures. Please refer
to the Notes following the Consolidated Financial Highlights which
contain the reconciliation of GAAP to non-GAAP financial measures
and the associated calculations.
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARYConsolidated Financial Highlights(Dollars in
Thousands, except share data) (Unaudited)
|
At or for the |
|
At or for the |
Three months ended |
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Statement of Income |
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
99,475 |
|
|
$ |
94,526 |
|
|
$ |
90,905 |
|
|
$ |
194,001 |
|
|
$ |
180,905 |
|
Provision for credit losses |
|
2,996 |
|
|
|
(6,405 |
) |
|
|
(10,704 |
) |
|
|
(3,409 |
) |
|
|
(25,705 |
) |
Non-interest income |
|
20,932 |
|
|
|
20,148 |
|
|
|
21,156 |
|
|
|
41,078 |
|
|
|
42,793 |
|
Non-interest expense |
|
63,846 |
|
|
|
61,886 |
|
|
|
62,698 |
|
|
|
125,730 |
|
|
|
124,551 |
|
Income before income tax expense |
|
53,565 |
|
|
|
59,193 |
|
|
|
60,067 |
|
|
|
112,758 |
|
|
|
124,852 |
|
Net income |
|
39,228 |
|
|
|
43,962 |
|
|
|
44,789 |
|
|
|
83,191 |
|
|
|
93,348 |
|
Diluted earnings per share |
$ |
0.53 |
|
|
$ |
0.58 |
|
|
$ |
0.58 |
|
|
$ |
1.11 |
|
|
$ |
1.22 |
|
Interest rate spread |
|
3.12 |
% |
|
|
2.94 |
% |
|
|
2.87 |
% |
|
|
3.03 |
% |
|
|
2.90 |
% |
Net interest margin |
|
3.21 |
% |
|
|
3.02 |
% |
|
|
2.99 |
% |
|
|
3.11 |
% |
|
|
3.02 |
% |
|
|
|
|
|
|
|
|
|
|
Profitability |
|
|
|
|
|
|
|
|
|
Annualized return on average assets |
|
1.16 |
% |
|
|
1.30 |
% |
|
|
1.36 |
% |
|
|
1.23 |
% |
|
|
1.43 |
% |
Annualized return on average equity |
|
9.83 |
% |
|
|
10.57 |
% |
|
|
10.77 |
% |
|
|
10.21 |
% |
|
|
11.38 |
% |
Annualized return on average tangible equity (1) |
|
13.82 |
% |
|
|
14.58 |
% |
|
|
14.92 |
% |
|
|
14.22 |
% |
|
|
15.85 |
% |
Annualized adjusted non-interest expense to average assets (3) |
|
1.92 |
% |
|
|
1.90 |
% |
|
|
1.84 |
% |
|
|
1.91 |
% |
|
|
1.89 |
% |
Efficiency ratio (4) |
|
53.83 |
% |
|
|
56.05 |
% |
|
|
54.12 |
% |
|
|
54.91 |
% |
|
|
55.15 |
% |
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
|
|
|
|
|
Non-accrual loans |
|
|
$ |
44,312 |
|
|
|
|
$ |
40,448 |
|
|
$ |
80,060 |
|
90+ and still accruing |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
Non-performing loans |
|
|
|
44,312 |
|
|
|
|
|
40,448 |
|
|
|
80,060 |
|
Foreclosed assets |
|
|
|
8,578 |
|
|
|
|
|
9,076 |
|
|
|
2,350 |
|
Non-performing assets |
|
|
|
52,890 |
|
|
|
|
|
49,524 |
|
|
|
82,410 |
|
Non-performing loans to total loans |
|
|
|
0.46 |
% |
|
|
|
|
0.40 |
% |
|
|
0.84 |
% |
Non-performing assets to total assets |
|
|
|
0.39 |
% |
|
|
|
|
0.36 |
% |
|
|
0.62 |
% |
Allowance for loan losses |
|
|
$ |
76,275 |
|
|
|
|
$ |
79,016 |
|
|
$ |
80,959 |
|
Allowance for loan losses to total non-performing loans |
|
|
|
172.13 |
% |
|
|
|
|
195.35 |
% |
|
|
101.12 |
% |
Allowance for loan losses to total loans |
|
|
|
0.79 |
% |
|
|
|
|
0.79 |
% |
|
|
0.85 |
% |
Net loan charge-offs (recoveries) |
$ |
259 |
|
|
$ |
(1,935 |
) |
|
$ |
(6,068 |
) |
|
$ |
(1,676 |
) |
|
$ |
(5,193 |
) |
Annualized net loan charge offs (recoveries) to average total
loans |
|
0.01 |
% |
|
|
(0.08 |
)% |
|
|
(0.25 |
)% |
|
|
(0.02 |
)% |
|
|
(0.11 |
)% |
|
|
|
|
|
|
|
|
|
|
Average Balance Sheet Data |
|
|
|
|
|
|
|
|
|
Assets |
$ |
13,541,209 |
|
|
$ |
13,693,429 |
|
|
$ |
13,227,853 |
|
|
$ |
13,616,899 |
|
|
$ |
13,131,545 |
|
Loans, net |
|
9,683,027 |
|
|
|
9,481,831 |
|
|
|
9,588,619 |
|
|
|
9,582,986 |
|
|
|
9,655,828 |
|
Earning assets |
|
12,328,742 |
|
|
|
12,527,409 |
|
|
|
12,080,463 |
|
|
|
12,427,528 |
|
|
|
11,946,272 |
|
Core deposits |
|
10,462,293 |
|
|
|
10,551,229 |
|
|
|
9,555,664 |
|
|
|
10,506,515 |
|
|
|
9,311,291 |
|
Borrowings |
|
527,630 |
|
|
|
549,679 |
|
|
|
869,036 |
|
|
|
538,593 |
|
|
|
941,729 |
|
Interest-bearing liabilities |
|
8,918,786 |
|
|
|
9,005,985 |
|
|
|
8,869,079 |
|
|
|
8,962,144 |
|
|
|
8,819,449 |
|
Stockholders' equity |
|
1,601,245 |
|
|
|
1,686,324 |
|
|
|
1,668,525 |
|
|
|
1,643,549 |
|
|
|
1,653,449 |
|
Average yield on interest-earning assets |
|
3.43 |
% |
|
|
3.23 |
% |
|
|
3.31 |
% |
|
|
3.33 |
% |
|
|
3.36 |
% |
Average cost of interest-bearing liabilities |
|
0.31 |
% |
|
|
0.29 |
% |
|
|
0.44 |
% |
|
|
0.30 |
% |
|
|
0.46 |
% |
Notes and Reconciliation of GAAP and
Non-GAAP Financial Measures(Dollars in Thousands, except
share data)
The Company has presented the following non-GAAP
(U.S. Generally Accepted Accounting Principles) financial measures
because it believes that these measures provide useful and
comparative information to assess trends in the Company’s results
of operations and financial condition. Presentation of these
non-GAAP financial measures is consistent with how the Company
evaluates its performance internally and these non-GAAP financial
measures are frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in the
Company’s industry. Investors should recognize that the Company’s
presentation of these non-GAAP financial measures might not be
comparable to similarly-titled measures of other companies. These
non-GAAP financial measures should not be considered a substitute
for GAAP basis measures and the Company strongly encourages a
review of its condensed consolidated financial statements in their
entirety.
(1) Annualized Return on Average Tangible
Equity |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Total average stockholders' equity |
$ |
1,601,245 |
|
|
$ |
1,686,324 |
|
|
$ |
1,668,525 |
|
|
$ |
1,643,549 |
|
|
$ |
1,653,449 |
|
Less: total average intangible assets |
|
463,039 |
|
|
|
463,890 |
|
|
|
464,201 |
|
|
|
463,462 |
|
|
|
465,473 |
|
Total average tangible stockholders' equity |
$ |
1,138,206 |
|
|
$ |
1,222,434 |
|
|
$ |
1,204,324 |
|
|
$ |
1,180,087 |
|
|
$ |
1,187,976 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
39,228 |
|
|
$ |
43,962 |
|
|
$ |
44,789 |
|
|
$ |
83,191 |
|
|
$ |
93,348 |
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average tangible equity (net income/total
average tangible stockholders' equity) |
|
13.82 |
% |
|
|
14.58 |
% |
|
|
14.92 |
% |
|
|
14.22 |
% |
|
|
15.85 |
% |
|
|
|
|
|
|
|
|
|
|
(2) Annualized Pre-Tax, Pre-Provision Return on Average
Assets |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income |
$ |
39,228 |
|
|
$ |
43,962 |
|
|
$ |
44,789 |
|
|
$ |
83,191 |
|
|
$ |
93,348 |
|
Add: provision for credit losses |
|
2,996 |
|
|
|
(6,405 |
) |
|
|
(10,704 |
) |
|
|
(3,409 |
) |
|
|
(25,705 |
) |
Add: provision for credit losses for off-balance sheet credit
exposure |
|
(973 |
) |
|
|
(2,390 |
) |
|
|
2,050 |
|
|
|
(3,363 |
) |
|
|
1,175 |
|
Add: income tax expense |
|
14,337 |
|
|
|
15,231 |
|
|
|
15,278 |
|
|
|
29,567 |
|
|
|
31,504 |
|
PTPP income |
$ |
55,588 |
|
|
$ |
50,398 |
|
|
$ |
51,413 |
|
|
$ |
105,986 |
|
|
$ |
100,322 |
|
|
|
|
|
|
|
|
|
|
|
Annualized PTPP income |
$ |
222,963 |
|
|
$ |
204,392 |
|
|
$ |
206,217 |
|
|
$ |
213,729 |
|
|
$ |
202,307 |
|
Average assets |
$ |
13,541,209 |
|
|
$ |
13,693,429 |
|
|
$ |
13,227,853 |
|
|
$ |
13,616,899 |
|
|
$ |
13,131,545 |
|
|
|
|
|
|
|
|
|
|
|
Annualized PTPP return on average assets |
|
1.65 |
% |
|
|
1.49 |
% |
|
|
1.56 |
% |
|
|
1.57 |
% |
|
|
1.54 |
% |
|
|
|
|
|
|
|
|
|
|
(3) Annualized Adjusted Non-Interest Expense to Average
Assets |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Reported non-interest expense |
$ |
63,846 |
|
|
$ |
61,886 |
|
|
$ |
62,698 |
|
|
$ |
125,730 |
|
|
$ |
124,551 |
|
Adjustments to non-interest expense: |
|
|
|
|
|
|
|
|
|
Credit loss (benefit) expense for off-balance sheet credit
exposures |
|
(973 |
) |
|
|
(2,390 |
) |
|
|
2,050 |
|
|
|
(3,363 |
) |
|
|
1,175 |
|
Adjusted non-interest expense |
$ |
64,819 |
|
|
$ |
64,276 |
|
|
$ |
60,648 |
|
|
$ |
129,093 |
|
|
$ |
123,376 |
|
|
|
|
|
|
|
|
|
|
|
Annualized adjusted non-interest expense |
$ |
259,988 |
|
|
$ |
260,675 |
|
|
$ |
243,258 |
|
|
$ |
260,326 |
|
|
$ |
248,797 |
|
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
13,541,209 |
|
|
$ |
13,693,429 |
|
|
$ |
13,227,853 |
|
|
$ |
13,616,899 |
|
|
|
13,131,545 |
|
|
|
|
|
|
|
|
|
|
|
Annualized adjusted non-interest expense/average assets |
|
1.92 |
% |
|
|
1.90 |
% |
|
|
1.84 |
% |
|
|
1.91 |
% |
|
|
1.89 |
% |
|
|
|
|
|
|
|
|
|
|
(4) Efficiency Ratio Calculation |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net interest income |
$ |
99,475 |
|
|
$ |
94,526 |
|
|
$ |
90,905 |
|
|
$ |
194,001 |
|
|
$ |
180,905 |
|
Non-interest income |
|
20,932 |
|
|
|
20,148 |
|
|
|
21,156 |
|
|
|
41,078 |
|
|
|
42,793 |
|
Total income |
$ |
120,407 |
|
|
$ |
114,674 |
|
|
$ |
112,061 |
|
|
$ |
235,079 |
|
|
$ |
223,698 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-interest expense |
$ |
64,819 |
|
|
$ |
64,276 |
|
|
$ |
60,648 |
|
|
$ |
129,093 |
|
|
$ |
123,376 |
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (adjusted non-interest expense/income) |
|
53.83 |
% |
|
|
56.05 |
% |
|
|
54.12 |
% |
|
|
54.91 |
% |
|
|
55.15 |
% |
|
|
|
|
|
|
|
|
|
|
(5) Book and Tangible Book Value per Share |
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
At December 31, |
|
|
|
|
|
|
|
2022 |
|
2021 |
Total stockholders' equity |
|
|
|
|
|
|
$ |
1,585,265 |
|
|
$ |
1,697,096 |
|
Less: total intangible assets |
|
|
|
|
|
|
|
462,451 |
|
|
|
464,183 |
|
Total tangible stockholders' equity |
|
|
|
|
|
|
$ |
1,122,814 |
|
|
$ |
1,232,913 |
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
|
|
|
|
|
|
75,163,718 |
|
|
|
76,969,999 |
|
|
|
|
|
|
|
|
|
|
|
Book value per share (total stockholders' equity/shares
outstanding) |
|
|
|
|
|
|
|
$21.09 |
|
|
|
$22.05 |
|
Tangible book value per share (total tangible stockholders'
equity/shares outstanding) |
|
|
|
|
|
|
|
$14.94 |
|
|
|
$16.02 |
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARYConsolidated Statements of Financial
ConditionJune 30, 2022 (Unaudited) and December 31,
2021(Dollars in Thousands)
Assets |
June 30, 2022 |
|
December 31, 2021 |
Cash and due from banks |
$ |
176,461 |
|
|
$ |
506,270 |
|
Short-term investments |
|
101,071 |
|
|
|
206,193 |
|
Total cash and cash equivalents |
|
277,532 |
|
|
|
712,463 |
|
Available for sale debt securities, at fair value |
|
1,947,120 |
|
|
|
2,057,851 |
|
Held to maturity debt securities, net (fair value of $399,140 at
June 30, 2022 (unaudited) and $449,709 at December 31, 2021) |
|
410,745 |
|
|
|
436,150 |
|
Equity securities, at fair value |
|
1,102 |
|
|
|
1,325 |
|
Federal Home Loan Bank stock |
|
54,836 |
|
|
|
34,290 |
|
Loans |
|
9,992,445 |
|
|
|
9,581,624 |
|
Less allowance for credit losses |
|
79,016 |
|
|
|
80,740 |
|
Net loans |
|
9,913,429 |
|
|
|
9,500,884 |
|
Foreclosed assets, net |
|
9,076 |
|
|
|
8,731 |
|
Banking premises and equipment, net |
|
81,655 |
|
|
|
80,559 |
|
Accrued interest receivable |
|
42,858 |
|
|
|
41,990 |
|
Intangible assets |
|
462,451 |
|
|
|
464,183 |
|
Bank-owned life insurance |
|
236,352 |
|
|
|
236,630 |
|
Other assets |
|
278,745 |
|
|
|
206,146 |
|
Total assets |
$ |
13,715,901 |
|
|
$ |
13,781,202 |
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
Deposits: |
|
|
|
Demand deposits |
$ |
8,695,223 |
|
|
$ |
9,080,956 |
|
Savings deposits |
|
1,512,356 |
|
|
|
1,460,541 |
|
Certificates of deposit of $100,000 or more |
|
392,725 |
|
|
|
368,277 |
|
Other time deposits |
|
273,920 |
|
|
|
324,238 |
|
Total deposits |
|
10,874,224 |
|
|
|
11,234,012 |
|
Mortgage escrow deposits |
|
42,346 |
|
|
|
34,440 |
|
Borrowed funds |
|
1,002,502 |
|
|
|
626,774 |
|
Subordinated debentures |
|
10,389 |
|
|
|
10,283 |
|
Other liabilities |
|
201,175 |
|
|
|
178,597 |
|
Total liabilities |
|
12,130,636 |
|
|
|
12,084,106 |
|
|
|
|
|
Stockholders' equity: |
|
|
|
Preferred stock, $0.01 par value, 50,000,000 shares authorized,
none issued |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
83,209,012 shares issued and 75,163,718 shares outstanding at June
30, 2022 and 76,969,999 outstanding at December 31, 2021. |
|
832 |
|
|
|
832 |
|
Additional paid-in capital |
|
976,067 |
|
|
|
969,815 |
|
Retained earnings |
|
860,977 |
|
|
|
814,533 |
|
Accumulated other comprehensive income |
|
(111,799 |
) |
|
|
6,863 |
|
Treasury stock |
|
(127,091 |
) |
|
|
(79,603 |
) |
Unallocated common stock held by the Employee Stock Ownership
Plan |
|
(13,721 |
) |
|
|
(15,344 |
) |
Common Stock acquired by the Directors' Deferred Fee Plan |
|
(3,705 |
) |
|
|
(3,984 |
) |
Deferred Compensation - Directors' Deferred Fee Plan |
|
3,705 |
|
|
|
3,984 |
|
Total stockholders' equity |
|
1,585,265 |
|
|
|
1,697,096 |
|
Total liabilities and stockholders' equity |
$ |
13,715,901 |
|
|
$ |
13,781,202 |
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARYConsolidated Statements of IncomeThree months
ended June 30, 2022, March 31, 2022 and June 30,
2021, and six months ended June 30, 2022 and 2021
(Unaudited)(Dollars in Thousands, except per share data)
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Interest income: |
|
|
|
|
|
|
|
|
|
Real estate secured loans |
$ |
69,073 |
|
|
$ |
63,835 |
|
|
$ |
62,877 |
|
|
$ |
132,908 |
|
|
$ |
124,893 |
|
Commercial loans |
|
22,363 |
|
|
|
22,821 |
|
|
|
25,173 |
|
|
|
45,184 |
|
|
|
51,316 |
|
Consumer loans |
|
3,344 |
|
|
|
3,139 |
|
|
|
3,412 |
|
|
|
6,483 |
|
|
|
6,904 |
|
Available for sale debt securities, equity securities and Federal
Home Loan Bank stock |
|
8,454 |
|
|
|
7,951 |
|
|
|
5,722 |
|
|
|
16,406 |
|
|
|
11,334 |
|
Held to maturity debt securities |
|
2,489 |
|
|
|
2,596 |
|
|
|
2,700 |
|
|
|
5,085 |
|
|
|
5,484 |
|
Deposits, federal funds sold and other short-term investments |
|
562 |
|
|
|
647 |
|
|
|
660 |
|
|
|
1,209 |
|
|
|
1,144 |
|
Total interest income |
|
106,285 |
|
|
|
100,989 |
|
|
|
100,544 |
|
|
|
207,275 |
|
|
|
201,075 |
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
Deposits |
|
5,576 |
|
|
|
5,187 |
|
|
|
6,782 |
|
|
|
10,763 |
|
|
|
14,199 |
|
Borrowed funds |
|
1,104 |
|
|
|
1,168 |
|
|
|
2,553 |
|
|
|
2,272 |
|
|
|
5,362 |
|
Subordinated debt |
|
130 |
|
|
|
108 |
|
|
|
304 |
|
|
|
239 |
|
|
|
609 |
|
Total interest expense |
|
6,810 |
|
|
|
6,463 |
|
|
|
9,639 |
|
|
|
13,274 |
|
|
|
20,170 |
|
Net interest income |
|
99,475 |
|
|
|
94,526 |
|
|
|
90,905 |
|
|
|
194,001 |
|
|
|
180,905 |
|
Provision charge (benefit) for credit losses |
|
2,996 |
|
|
|
(6,405 |
) |
|
|
(10,704 |
) |
|
|
(3,409 |
) |
|
|
(25,705 |
) |
Net interest income after provision for credit losses |
|
96,479 |
|
|
|
100,931 |
|
|
|
101,609 |
|
|
|
197,410 |
|
|
|
206,610 |
|
|
|
|
|
|
|
|
|
|
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
Fees |
|
7,424 |
|
|
|
6,889 |
|
|
|
8,467 |
|
|
|
14,313 |
|
|
|
15,659 |
|
Wealth management income |
|
7,024 |
|
|
|
7,466 |
|
|
|
7,859 |
|
|
|
14,489 |
|
|
|
14,993 |
|
Insurance agency income |
|
2,850 |
|
|
|
3,420 |
|
|
|
2,849 |
|
|
|
6,270 |
|
|
|
5,576 |
|
Bank-owned life insurance |
|
1,563 |
|
|
|
1,179 |
|
|
|
1,523 |
|
|
|
2,741 |
|
|
|
4,090 |
|
Net gain on securities transactions |
|
141 |
|
|
|
16 |
|
|
|
34 |
|
|
|
157 |
|
|
|
231 |
|
Other income |
|
1,930 |
|
|
|
1,178 |
|
|
|
424 |
|
|
|
3,108 |
|
|
|
2,244 |
|
Total non-interest income |
|
20,932 |
|
|
|
20,148 |
|
|
|
21,156 |
|
|
|
41,078 |
|
|
|
42,793 |
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
37,437 |
|
|
|
37,067 |
|
|
|
34,871 |
|
|
|
74,503 |
|
|
|
70,183 |
|
Net occupancy expense |
|
8,479 |
|
|
|
9,330 |
|
|
|
7,907 |
|
|
|
17,810 |
|
|
|
17,208 |
|
Data processing expense |
|
5,632 |
|
|
|
5,344 |
|
|
|
5,409 |
|
|
|
10,976 |
|
|
|
9,802 |
|
FDIC Insurance |
|
1,350 |
|
|
|
1,205 |
|
|
|
1,570 |
|
|
|
2,555 |
|
|
|
3,340 |
|
Amortization of intangibles |
|
873 |
|
|
|
859 |
|
|
|
918 |
|
|
|
1,732 |
|
|
|
1,890 |
|
Advertising and promotion expense |
|
1,222 |
|
|
|
1,104 |
|
|
|
927 |
|
|
|
2,326 |
|
|
|
1,804 |
|
Credit loss (benefit) expense for off-balance sheet credit
exposures |
|
(973 |
) |
|
|
(2,390 |
) |
|
|
2,050 |
|
|
|
(3,363 |
) |
|
|
1,175 |
|
Other operating expenses |
|
9,826 |
|
|
|
9,367 |
|
|
|
9,046 |
|
|
|
19,191 |
|
|
|
19,149 |
|
Total non-interest expense |
|
63,846 |
|
|
|
61,886 |
|
|
|
62,698 |
|
|
|
125,730 |
|
|
|
124,551 |
|
Income before income tax expense |
|
53,565 |
|
|
|
59,193 |
|
|
|
60,067 |
|
|
|
112,758 |
|
|
|
124,852 |
|
Income tax expense |
|
14,337 |
|
|
|
15,231 |
|
|
|
15,278 |
|
|
|
29,567 |
|
|
|
31,504 |
|
Net income |
$ |
39,228 |
|
|
$ |
43,962 |
|
|
|
44,789 |
|
|
$ |
83,191 |
|
|
$ |
93,348 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.53 |
|
|
$ |
0.58 |
|
|
$ |
0.58 |
|
|
$ |
1.11 |
|
|
$ |
1.22 |
|
Average basic shares outstanding |
|
74,328,632 |
|
|
|
75,817,971 |
|
|
|
76,643,546 |
|
|
|
75,068,154 |
|
|
|
76,580,364 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
0.53 |
|
|
$ |
0.58 |
|
|
$ |
0.58 |
|
|
$ |
1.11 |
|
|
$ |
1.22 |
|
Average diluted shares outstanding |
|
74,400,788 |
|
|
|
75,914,079 |
|
|
|
76,753,442 |
|
|
|
75,152,286 |
|
|
|
76,667,471 |
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARYNet Interest Margin AnalysisQuarterly Average
Balances(Dollars in Thousands) (Unaudited)
|
June 30, 2022 |
|
March 31, 2022 |
|
June 30, 2021 |
|
AverageBalance |
|
Interest |
|
Average Yield/Cost |
|
AverageBalance |
|
Interest |
|
Average Yield/Cost |
|
AverageBalance |
|
Interest |
|
Average Yield/Cost |
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
$ |
77,761 |
|
|
$ |
191 |
|
|
0.98 |
% |
|
$ |
274,004 |
|
|
$ |
107 |
|
|
0.16 |
% |
|
$ |
431,857 |
|
|
$ |
114 |
|
|
0.11 |
% |
Federal funds sold and other short-term investments |
|
99,825 |
|
|
|
371 |
|
|
1.49 |
% |
|
|
195,598 |
|
|
|
540 |
|
|
1.12 |
% |
|
|
173,701 |
|
|
|
546 |
|
|
1.26 |
% |
Available for sale debt securities |
|
2,023,199 |
|
|
|
8,093 |
|
|
1.60 |
% |
|
|
2,115,852 |
|
|
|
7,577 |
|
|
1.43 |
% |
|
|
1,401,284 |
|
|
|
5,122 |
|
|
1.46 |
% |
Held to maturity debt securities, net (1) |
|
412,229 |
|
|
|
2,489 |
|
|
2.41 |
% |
|
|
428,125 |
|
|
|
2,596 |
|
|
2.43 |
% |
|
|
438,079 |
|
|
|
2,700 |
|
|
2.47 |
% |
Equity securities, at fair value |
|
1,019 |
|
|
|
— |
|
|
— |
% |
|
|
1,092 |
|
|
|
— |
|
|
— |
% |
|
|
1,056 |
|
|
|
— |
|
|
— |
% |
Federal Home Loan Bank stock |
|
31,682 |
|
|
|
361 |
|
|
4.55 |
% |
|
|
30,907 |
|
|
|
374 |
|
|
4.85 |
% |
|
|
45,867 |
|
|
|
600 |
|
|
5.24 |
% |
Net loans: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total mortgage loans |
|
7,252,665 |
|
|
|
69,073 |
|
|
3.78 |
% |
|
|
7,061,657 |
|
|
|
63,835 |
|
|
3.62 |
% |
|
|
6,816,999 |
|
|
|
62,877 |
|
|
3.66 |
% |
Total commercial loans |
|
2,107,681 |
|
|
|
22,363 |
|
|
4.22 |
% |
|
|
2,099,145 |
|
|
|
22,821 |
|
|
4.38 |
% |
|
|
2,415,548 |
|
|
|
25,173 |
|
|
4.15 |
% |
Total consumer loans |
|
322,681 |
|
|
|
3,344 |
|
|
4.16 |
% |
|
|
321,029 |
|
|
|
3,139 |
|
|
3.97 |
% |
|
|
356,072 |
|
|
|
3,412 |
|
|
3.84 |
% |
Total net loans |
|
9,683,027 |
|
|
|
94,780 |
|
|
3.89 |
% |
|
|
9,481,831 |
|
|
|
89,795 |
|
|
3.80 |
% |
|
|
9,588,619 |
|
|
|
91,462 |
|
|
3.79 |
% |
Total interest-earning assets |
$ |
12,328,742 |
|
|
$ |
106,285 |
|
|
3.43 |
% |
|
$ |
12,527,409 |
|
|
$ |
100,989 |
|
|
3.23 |
% |
|
$ |
12,080,463 |
|
|
$ |
100,544 |
|
|
3.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
129,953 |
|
|
|
|
|
|
|
122,856 |
|
|
|
|
|
|
|
145,082 |
|
|
|
|
|
Other assets |
|
1,082,514 |
|
|
|
|
|
|
|
1,043,164 |
|
|
|
|
|
|
|
1,002,308 |
|
|
|
|
|
Total assets |
$ |
13,541,209 |
|
|
|
|
|
|
$ |
13,693,429 |
|
|
|
|
|
|
$ |
13,227,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
$ |
6,189,722 |
|
|
$ |
4,458 |
|
|
0.29 |
% |
|
$ |
6,288,544 |
|
|
$ |
4,195 |
|
|
0.27 |
% |
|
$ |
5,658,084 |
|
|
$ |
5,103 |
|
|
0.36 |
% |
Savings deposits |
|
1,496,064 |
|
|
|
285 |
|
|
0.08 |
% |
|
|
1,476,643 |
|
|
|
291 |
|
|
0.08 |
% |
|
|
1,419,176 |
|
|
|
396 |
|
|
0.11 |
% |
Time deposits |
|
695,015 |
|
|
|
833 |
|
|
0.48 |
% |
|
|
680,818 |
|
|
|
701 |
|
|
0.42 |
% |
|
|
897,597 |
|
|
|
1,283 |
|
|
0.57 |
% |
Total Deposits |
|
8,380,801 |
|
|
|
5,576 |
|
|
0.27 |
% |
|
|
8,446,005 |
|
|
|
5,187 |
|
|
0.25 |
% |
|
|
7,974,857 |
|
|
|
6,782 |
|
|
0.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowed funds |
|
527,630 |
|
|
|
1,104 |
|
|
0.84 |
% |
|
|
549,679 |
|
|
|
1,168 |
|
|
0.86 |
% |
|
|
869,036 |
|
|
|
2,553 |
|
|
1.18 |
% |
Subordinated debentures |
|
10,355 |
|
|
|
130 |
|
|
5.05 |
% |
|
|
10,301 |
|
|
|
108 |
|
|
4.27 |
% |
|
|
25,186 |
|
|
|
304 |
|
|
4.85 |
% |
Total interest-bearing liabilities |
|
8,918,786 |
|
|
|
6,810 |
|
|
0.31 |
% |
|
|
9,005,985 |
|
|
|
6,463 |
|
|
0.29 |
% |
|
|
8,869,079 |
|
|
|
9,639 |
|
|
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
2,776,507 |
|
|
|
|
|
|
|
2,786,042 |
|
|
|
|
|
|
|
2,478,404 |
|
|
|
|
|
Other non-interest bearing liabilities |
|
244,671 |
|
|
|
|
|
|
|
215,078 |
|
|
|
|
|
|
|
211,845 |
|
|
|
|
|
Total non-interest bearing liabilities |
|
3,021,178 |
|
|
|
|
|
|
|
3,001,120 |
|
|
|
|
|
|
|
2,690,249 |
|
|
|
|
|
Total liabilities |
|
11,939,964 |
|
|
|
|
|
|
|
12,007,105 |
|
|
|
|
|
|
|
11,559,328 |
|
|
|
|
|
Stockholders' equity |
|
1,601,245 |
|
|
|
|
|
|
|
1,686,324 |
|
|
|
|
|
|
|
1,668,525 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
13,541,209 |
|
|
|
|
|
|
$ |
13,693,429 |
|
|
|
|
|
|
$ |
13,227,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
99,475 |
|
|
|
|
|
|
$ |
94,526 |
|
|
|
|
|
|
$ |
90,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
3.12 |
% |
|
|
|
|
|
2.94 |
% |
|
|
|
|
|
2.87 |
% |
Net interest-earning assets |
$ |
3,409,956 |
|
|
|
|
|
|
$ |
3,521,424 |
|
|
|
|
|
|
$ |
3,211,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (3) |
|
|
|
|
3.21 |
% |
|
|
|
|
|
3.02 |
% |
|
|
|
|
|
2.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets to total interest-bearing
liabilities |
1.38x |
|
|
|
|
|
1.39x |
|
|
|
|
|
1.36x |
|
|
|
|
(1) |
Average outstanding balance amounts shown are amortized cost, net
of allowance for credit losses. |
(2) |
Average outstanding balances are net of the allowance for loan
losses, deferred loan fees and expenses, loan premiums and
discounts and include non-accrual loans. |
(3) |
Annualized net interest income divided by average interest-earning
assets. |
The following table summarizes the quarterly net interest margin
for the previous five quarters.
|
6/30/22 |
|
3/31/22 |
|
12/31/21 |
|
9/30/21 |
|
6/30/21 |
|
2nd Qtr. |
|
1st Qtr. |
|
4th Qtr. |
|
3rd Qtr. |
|
2nd Qtr. |
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities |
1.74 |
% |
|
1.47 |
% |
|
1.29 |
% |
|
1.32 |
% |
|
1.46 |
% |
Net loans |
3.89 |
% |
|
3.80 |
% |
|
3.81 |
% |
|
3.77 |
% |
|
3.79 |
% |
Total interest-earning assets |
3.43 |
% |
|
3.23 |
% |
|
3.19 |
% |
|
3.21 |
% |
|
3.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
0.27 |
% |
|
0.25 |
% |
|
0.28 |
% |
|
0.30 |
% |
|
0.34 |
% |
Total borrowings |
0.84 |
% |
|
0.86 |
% |
|
0.94 |
% |
|
1.08 |
% |
|
1.18 |
% |
Total interest-bearing liabilities |
0.31 |
% |
|
0.29 |
% |
|
0.34 |
% |
|
0.37 |
% |
|
0.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
3.12 |
% |
|
2.94 |
% |
|
2.85 |
% |
|
2.84 |
% |
|
2.87 |
% |
Net interest margin |
3.21 |
% |
|
3.02 |
% |
|
2.95 |
% |
|
2.94 |
% |
|
2.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets to interest-bearing
liabilities |
1.38x |
|
1.39x |
|
1.39x |
|
1.38x |
|
1.36x |
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARYNet Interest Margin AnalysisAverage Year to Date
Balances(Dollars in Thousands) (Unaudited)
|
June 30, 2022 |
|
June 30, 2021 |
|
AverageBalance |
|
Interest |
|
AverageYield/Cost |
|
AverageBalance |
|
Interest |
|
AverageYield/Cost |
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
$ |
175,341 |
|
|
$ |
298 |
|
|
0.34 |
% |
|
$ |
375,799 |
|
|
$ |
198 |
|
|
0.11 |
% |
Federal funds sold and other short term investments |
|
147,447 |
|
|
|
911 |
|
|
1.25 |
% |
|
|
150,971 |
|
|
|
946 |
|
|
1.26 |
% |
Available for sale debt securities |
|
2,069,270 |
|
|
|
15,671 |
|
|
1.51 |
% |
|
|
1,269,815 |
|
|
|
9,970 |
|
|
1.57 |
% |
Held to maturity debt securities, net (1) |
|
420,133 |
|
|
|
5,085 |
|
|
2.42 |
% |
|
|
444,204 |
|
|
|
5,484 |
|
|
2.47 |
% |
Equity securities, at fair value |
|
1,055 |
|
|
|
— |
|
|
— |
% |
|
|
1,018 |
|
|
|
— |
|
|
— |
% |
Federal Home Loan Bank stock |
|
31,296 |
|
|
|
735 |
|
|
4.70 |
% |
|
|
48,637 |
|
|
|
1,364 |
|
|
5.61 |
% |
Net loans: (2) |
|
|
|
|
|
|
|
|
|
|
|
Total mortgage loans |
|
7,156,189 |
|
|
|
132,908 |
|
|
3.70 |
% |
|
|
6,812,557 |
|
|
|
124,893 |
|
|
3.65 |
% |
Total commercial loans |
|
2,105,001 |
|
|
|
45,184 |
|
|
4.30 |
% |
|
|
2,463,788 |
|
|
|
51,316 |
|
|
4.17 |
% |
Total consumer loans |
|
321,796 |
|
|
|
6,483 |
|
|
4.06 |
% |
|
|
379,483 |
|
|
|
6,904 |
|
|
3.67 |
% |
Total net loans |
|
9,582,986 |
|
|
|
184,575 |
|
|
3.84 |
% |
|
|
9,655,828 |
|
|
|
183,113 |
|
|
3.79 |
% |
Total interest-earning assets |
$ |
12,427,528 |
|
|
$ |
207,275 |
|
|
3.33 |
% |
|
$ |
11,946,272 |
|
|
$ |
201,075 |
|
|
3.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
126,423 |
|
|
|
|
|
|
|
164,174 |
|
|
|
|
|
Other assets |
|
1,062,948 |
|
|
|
|
|
|
|
1,021,099 |
|
|
|
|
|
Total assets |
$ |
13,616,899 |
|
|
|
|
|
|
$ |
13,131,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
$ |
6,238,860 |
|
|
$ |
8,653 |
|
|
0.28 |
% |
|
$ |
5,487,222 |
|
|
$ |
10,614 |
|
|
0.39 |
% |
Savings deposits |
|
1,486,407 |
|
|
|
576 |
|
|
0.08 |
% |
|
|
1,395,408 |
|
|
|
803 |
|
|
0.12 |
% |
Time deposits |
|
687,956 |
|
|
|
1,534 |
|
|
0.45 |
% |
|
|
969,922 |
|
|
|
2,782 |
|
|
0.58 |
% |
Total deposits |
|
8,413,223 |
|
|
|
10,763 |
|
|
0.26 |
% |
|
|
7,852,552 |
|
|
|
14,199 |
|
|
0.36 |
% |
Borrowed funds |
|
538,593 |
|
|
|
2,272 |
|
|
0.85 |
% |
|
|
941,729 |
|
|
|
5,362 |
|
|
1.15 |
% |
Subordinated debentures |
|
10,328 |
|
|
|
239 |
|
|
4.66 |
% |
|
|
25,168 |
|
|
|
609 |
|
|
4.88 |
% |
Total interest-bearing liabilities |
$ |
8,962,144 |
|
|
$ |
13,274 |
|
|
0.30 |
% |
|
$ |
8,819,449 |
|
|
$ |
20,170 |
|
|
0.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
2,781,248 |
|
|
|
|
|
|
|
2,428,661 |
|
|
|
|
|
Other non-interest bearing liabilities |
|
229,958 |
|
|
|
|
|
|
|
229,986 |
|
|
|
|
|
Total non-interest bearing liabilities |
|
3,011,206 |
|
|
|
|
|
|
|
2,658,647 |
|
|
|
|
|
Total liabilities |
|
11,973,350 |
|
|
|
|
|
|
|
11,478,096 |
|
|
|
|
|
Stockholders' equity |
|
1,643,549 |
|
|
|
|
|
|
|
1,653,449 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
13,616,899 |
|
|
|
|
|
|
$ |
13,131,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
194,001 |
|
|
|
|
|
|
$ |
180,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
3.03 |
% |
|
|
|
|
|
2.90 |
% |
Net interest-earning assets |
$ |
3,465,384 |
|
|
|
|
|
|
$ |
3,126,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (3) |
|
|
|
|
3.11 |
% |
|
|
|
|
|
3.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets to total interest-bearing
liabilities |
1.39x |
|
|
|
|
|
1.35x |
|
|
|
|
(1) |
Average outstanding balance amounts shown are amortized cost, net
of allowance for credit losses. |
(2) |
Average outstanding balance are net of the allowance for loan
losses, deferred loan fees and expenses, loan premium and discounts
and include non-accrual loans. |
(3) |
Annualized net interest income divided by average interest-earning
assets. |
The following table summarizes the year-to-date net interest
margin for the previous three years.
|
Six Months Ended |
|
June 30, 2022 |
|
June 30, 2021 |
|
June 30, 2020 |
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
Securities |
1.59 |
% |
|
1.57 |
% |
|
2.42 |
% |
Net loans |
3.84 |
% |
|
3.79 |
% |
|
3.99 |
% |
Total interest-earning assets |
3.33 |
% |
|
3.36 |
% |
|
3.67 |
% |
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
Total deposits |
0.26 |
% |
|
0.36 |
% |
|
0.66 |
% |
Total borrowings |
0.85 |
% |
|
1.15 |
% |
|
1.55 |
% |
Total interest-bearing liabilities |
0.30 |
% |
|
0.46 |
% |
|
0.81 |
% |
|
|
|
|
|
|
|
|
|
Interest rate spread |
3.03 |
% |
|
2.90 |
% |
|
2.86 |
% |
Net interest margin |
3.11 |
% |
|
3.02 |
% |
|
3.06 |
% |
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets to interest-bearing
liabilities |
1.39x |
|
1.35x |
|
1.34x |
SOURCE: Provident Financial Services, Inc.CONTACT: Investor
Relations, 1-732-590-9300Web Site: http://www.Provident.Bank
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