Provident Financial Services, Inc. (NYSE:PFS) (the “Company”)
reported net income of $32.0 million, or $0.43 per basic and
diluted share for the three months ended June 30, 2023, compared to
$40.5 million, or $0.54 per basic and diluted share, for the three
months ended March 31, 2023 and $39.2 million, or $0.53 per basic
and diluted share, for the three months ended June 30, 2022. For
the six months ended June 30, 2023, net income totaled $72.5
million, or $0.97 per basic and diluted share, compared to $83.2
million, or $1.11 per basic and diluted share, for the six months
ended June 30, 2022. Net income for the three and six months ended
June 30, 2023 was negatively impacted by an increase in funding
costs and an increase in the provision for credit losses due to a
worsened economic forecast. In addition, transaction costs related
to our pending merger with Lakeland Bancorp, Inc. (“Lakeland”)
totaled $2.0 million and $3.1 million for the three and six months
ended June 30, 2023, respectively.
Performance Highlights for the
Second Quarter of
2023
- The Company’s total
loan portfolio increased $306.3 million, or 12.0% annualized, to
$10.53 billion at June 30, 2023, from $10.22 billion at
March 31, 2023.
- At June 30,
2023, the Company's loan pipeline, consisting of work-in-process
and loans approved pending closing, totaled $1.74 billion, with a
weighted average interest rate of 7.23%, compared to $1.54 billion,
with a weighted average interest rate of 6.74%.
- The average yield
on total loans increased 12 basis points to 5.24% for the quarter
ended June 30, 2023, compared to the trailing quarter, while
the average cost of deposits, including non-interest bearing
deposits, increased 37 basis points to 1.42% for the quarter ended
June 30, 2023 from the trailing quarter.
- Net interest income
decreased $9.2 million to $99.1 million for the three months ended
June 30, 2023, from $108.3 million for the trailing quarter as a
result of higher funding costs, which more than offset the benefits
of favorable loan repricing and loan growth.
- The net interest
margin decreased 37 basis points to 3.11% for the quarter ended
June 30, 2023, from 3.48% for the trailing quarter. The
weighted average yield on interest-earning assets for the quarter
ended June 30, 2023 increased 10 basis points to 4.73%,
compared to the trailing quarter, while the weighted average cost
of interest-bearing liabilities for the quarter ended June 30,
2023 increased 59 basis points to 2.13%, compared to the trailing
quarter. The increase in funding costs reflected a decrease in
lower-costing deposits, an increase in borrowings and unfavorable
repricing in both deposits and borrowings.
- During the three
months ended June 30, 2023, additional balances from
traditional non-interest and interest bearing demand deposits
transitioned into our insured cash sweep ("ICS") product, as a
method to increase the level of customers' deposit insurance in
light of recent banking turmoil. As of June 30, 2023 our ICS
deposits totaled $382.9 million, compared to $58.9 million at
December 31, 2022. Our estimated uninsured and
uncollateralized deposits at June 30, 2023 totaled $2.72
billion. At June 30, 2023, Provident Bank had on balance sheet
liquidity and borrowing capacity totaling $3.82 billion,
representing 140% of estimated uninsured and uncollateralized
deposits. All borrowing capacity is immediately available.
- At June 30,
2023, CRE loans related to retail, industrial, office, and hotel
properties totaled $1.70 billion, $1.12 billion, $487.9 million and
$152.1 million, respectively. At March 31, 2023 CRE loans
related to retail, industrial, office, and hotel properties totaled
$1.65 billion, $1.13 billion, $502.3 million and $167.4 million,
respectively. Construction loans, consisting primarily of
multi-family projects, decreased $8.3 million to $707.2 million at
June 30, 2023, from $715.5 million at December 31,
2022.
- The Company
recorded a $10.4 million provision for credit losses for the
quarter ended June 30, 2023, compared to a $6.0 million
provision for the trailing quarter. The provision for credit losses
in the quarter was primarily attributable to a weakening economic
forecast within our CECL model. Asset quality metrics were stable,
with annualized net charge-offs totaling 4 basis points for the
quarter. The allowance for credit losses as a percentage of loans
increased to 0.97% at June 30, 2023, from 0.91% at
March 31, 2023.
- Tangible book value
per share(1) increased $0.02 to $15.66 at June 30, 2023,
compared to the trailing quarter.
- Annualized returns
on average assets, average equity and average tangible equity were
0.93%, 7.76% and 10.75%, respectively for the three months ended
June 30, 2023, compared with 1.20%, 10.11% and 14.10%, respectively
for the trailing quarter.
- The Company's
annualized adjusted pre-tax, pre-provision ("PTPP") return on
average assets(1) was 1.60% for the quarter ended June 30,
2023, compared to 1.86% for the quarter ended March 31,
2023.
Anthony J. Labozzetta, President and Chief
Executive Officer commented, “Provident produced good financial
results this quarter, despite unfavorable market conditions. We
were pleased by the growth in our loans and loan pipeline, solid
performance from our fee businesses, and prudent expense
management. While increased interest rates and a shift in the
funding mix have adversely impacted our net interest margin, our
interest rate risk management remains sound. An increased provision
for loan losses largely driven by changes in our CECL forecast also
impacted the quarter’s results, however asset quality remains
strong and stable. Our results demonstrate the strength of our
franchise and talented management team.”
Regarding the Company's pending merger with
Lakeland, Mr. Labozzetta added, “We continue our interaction with
the regulators and have been providing additional information in
order to further support our applications for approval of the
merger. The companies have made significant progress in various
integration initiatives through outstanding teamwork from both
banks. We look forward to receiving regulatory approval and
combining our two great franchises into the best bank in New
Jersey.”
Declaration of Quarterly
Dividend
The Company’s Board of Directors declared a
quarterly cash dividend of $0.24 per common share payable on August
25, 2023 to stockholders of record as of the close of business on
August 11, 2023.
Results of Operations
Three months ended June 30, 2023
compared to the three months ended March 31, 2023
For the three months ended June 30, 2023, net
income was $32.0 million, or $0.43 per basic and diluted share,
compared to net income of $40.5 million, or $0.54 per basic and
diluted share, for the three months ended March 31, 2023.
Net Interest Income and Net Interest
Margin
Net interest income decreased $9.2 million to
$99.1 million for the three months ended June 30, 2023, from $108.3
million for the trailing quarter. The decrease in net interest
income was primarily due to a decrease in lower-costing deposits
and an increase in borrowings, combined with unfavorable repricing
of both deposits and borrowings, partially offset by originations
of new loans at current market rates and the favorable repricing of
adjustable rate loans.
The Company’s net interest margin decreased 37
basis points to 3.11% for the quarter ended June 30, 2023,
from 3.48% for the trailing quarter. The weighted average yield on
interest-earning assets for the quarter ended June 30, 2023
increased 10 basis points to 4.73%, compared to the trailing
quarter. The weighted average cost of interest-bearing liabilities
for the quarter ended June 30, 2023 increased 59 basis points
from the trailing quarter, to 2.13%. The average cost of
interest-bearing deposits for the quarter ended June 30, 2023
increased 46 basis points to 1.85%, compared to 1.39% for the
trailing quarter. The average cost of total deposits, including
non-interest bearing deposits, was 1.42% for the quarter ended
June 30, 2023, compared to 1.05% for the trailing quarter. The
average cost of borrowed funds for the quarter ended June 30,
2023 was 3.41%, compared to 2.48% for the quarter ended
March 31, 2023.
Provision for Credit Losses
For the quarter ended June 30, 2023, the
Company recorded a $10.4 million provision for credit losses,
compared with a provision for credit losses of $6.0 million for the
quarter ended March 31, 2023. The provision for credit losses
in the quarter was primarily attributable to a worsened economic
forecast and related deterioration in the projected commercial
property price indices over the expected life of the loan portfolio
within our CECL model. Loan growth of $306.3 million and an
increase in specific reserves on impaired credits further
contributed to the increased provision for credit losses for this
quarter.
Non-Interest Income and
Expense
For the three months ended June 30, 2023,
non-interest income totaled $19.4 million, a decrease of $2.8
million, compared to the trailing quarter. Other income decreased
$2.0 million to $1.3 million for the three months ended June 30,
2023, compared to the trailing quarter, primarily due to a $2.0
million gain recognized in the prior quarter, related to the
resolution of certain post-closing conditions following the
September 2022 sale of a foreclosed commercial property, along with
a reduction in the gains on sale of SBA loans. Fee income decreased
$612,000 to $5.8 million for the three months ended June 30, 2023,
compared to the trailing quarter, primarily due to decreases in
deposit fee income and commercial loan prepayment fees.
Additionally, insurance agency income decreased $255,000 to $3.8
million for the three months ended June 30, 2023, compared to the
trailing quarter, mainly due to the prior quarter receipt of
contingent commissions, partially offset by new business activity
in the current quarter.
Non-interest expense totaled $64.5 million for
the three months ended June 30, 2023, a decrease of $5.0 million,
compared to $69.5 million for the trailing quarter. Compensation
and benefits expense decreased $3.5 million to $35.3 million for
the three months ended June 30, 2023, compared to $38.7 million for
the trailing quarter. The decrease in compensation and benefit
expense was primarily attributable to decreases in the accrual for
incentive compensation, payroll taxes and stock-based compensation.
For the three months ended June 30, 2023, the Company recorded a
$647,000 negative provision for credit losses for off-balance sheet
credit exposures, compared to a $739,000 provision for the trailing
quarter. The $1.4 million decrease in the provision for credit
losses for the quarter was primarily due to an increase in line of
credit utilization, partially offset by an increase in loans
approved and awaiting closing. Additionally, other non-interest
expense decreased $1.1 million to $9.9 million for the three months
ended June 30, 2023, compared to the trailing quarter, mainly due
to prior quarter charges related to the disposal of a former branch
office, combined with prior quarter miscellaneous charges.
Partially offsetting these decreases, merger expenses related to
our pending combination with Lakeland increased $860,000 to $2.0
million for the three months ended June 30, 2023, compared to the
trailing quarter.
The Company’s annualized adjusted non-interest
expense as a percentage of average assets(1) was 1.83% for the
quarter ended June 30, 2023, compared to 2.00% 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 53.29% for the three months ended June 30,
2023, compared to 51.85% for the trailing quarter.
Income Tax Expense
For the three months ended June 30, 2023,
the Company's income tax expense was $11.6 million with an
effective tax rate of 26.7%, compared with income tax expense of
$14.5 million with an effective tax rate of 26.3% for the trailing
quarter. The decrease in tax expense for the three months ended
June 30, 2023, compared with the trailing quarter was largely
due to a decrease in taxable income, while the increase in the
effective tax rate, compared with the trailing quarter was
primarily due to an increase in non-deductible merger related
transaction costs.
Three months ended June 30, 2023
compared to the three months ended June 30, 2022
For the three months ended June 30, 2023, net
income was $32.0 million, or $0.43 per basic and diluted share,
compared to net income of $39.2 million, or $0.53 per basic and
diluted share, for the three months ended June 30, 2022.
Net Interest Income and Net Interest
Margin
Net interest income decreased $369,000 to $99.1
million for the three months ended June 30, 2023, from $99.5
million for same period in 2022. The decrease in net interest
income was primarily due to a decrease in lower-costing deposits
and an increase in borrowings, combined with unfavorable repricing
of both deposits and borrowings, partially offset by originations
of new loans and the favorable repricing of adjustable rate
loans.
The Company’s net interest margin decreased 10
basis points to 3.11% for the quarter ended June 30, 2023,
from 3.21% for the same period last year. The weighted average
yield on interest-earning assets for the quarter ended
June 30, 2023 increased 130 basis points to 4.73%, compared to
3.43% for the quarter ended June 30, 2022. The weighted
average cost of interest bearing liabilities increased 182 basis
points for the quarter ended June 30, 2023 to 2.13%, compared
to 0.31% for the second quarter of 2022. The average cost of
interest bearing deposits for the quarter ended June 30, 2023
was 1.85%, compared to 0.27% for the same period last year. Average
non-interest bearing demand deposits decreased $407.5 million to
$2.37 billion for the quarter ended June 30, 2023, compared to
$2.78 billion for the quarter ended June 30, 2022. The average
cost of total deposits, including non-interest bearing deposits,
was 1.42% for the quarter ended June 30, 2023, compared with
0.20% for the quarter ended June 30, 2022. The average cost of
borrowed funds for the quarter ended June 30, 2023 was 3.41%,
compared to 0.84% for the same period last year.
Provision for Credit Losses
For the quarter ended June 30, 2023, the
Company recorded a $10.4 million provision for credit losses,
compared with a $3.0 million provision for credit losses for the
quarter ended June 30, 2022. The increase in the allowance for
credit losses on loans was primarily attributable to a worsened
economic forecast and related deterioration in the projected
commercial property price indices over the expected life of the
loan portfolio within our CECL model, combined with an increase in
total loans outstanding.
Non-Interest Income and
Expense
Non-interest income totaled $19.4 million for
the quarter ended June 30, 2023, a decrease of $1.5 million,
compared to the same period in 2022. Fee income decreased $1.6
million to $5.8 million for the three months ended June 30, 2023,
compared to the trailing quarter, primarily due to decreases in
commercial loan prepayment fees and deposit fee income. Other
income decreased $647,000 to $1.3 million for the three months
ended June 30, 2023, compared to the quarter ended June 30,
2022, primarily due to a decrease in net gains on sales of SBA
loans. Partially offsetting these decreases in non-interest income,
insurance agency income increased $997,000 to $3.8 million for the
three months ended June 30, 2023, compared to the quarter ended
June 30, 2022, largely due to strong retention revenue and new
business activity.
For the three months ended June 30, 2023,
non-interest expense totaled $64.5 million, an increase of
$617,000, compared to the three months ended June 30, 2022.
Merger-related expenses totaled $2.0 million for the three months
ended June 30, 2023, as a result of transaction costs related to
our pending combination with Lakeland. FDIC insurance expense
increased $775,000 to $2.1 million for the three months ended June
30, 2023, compared to the same period in 2022, primarily due to an
increase in the assessment rate. The Company recorded a $647,000
negative provision for credit losses for off-balance sheet credit
exposures, compared to a $973,000 negative provision for the same
period in 2022. The $326,000 reduction in the provision benefit was
primarily the result of the period-over-period relative changes in
line of credit utilization. Partially offsetting these increases in
non-interest expense, compensation and benefits expense decreased
$2.2 million to $35.3 million for three months ended June 30, 2023,
compared to $37.4 million for the same period in 2022. The decrease
was principally due to decreases in the accrual for incentive
compensation and stock-based compensation, partially offset by an
increase in salary expense. Net occupancy expenses decreased
$530,000 to $7.9 million for the three months ended June 30, 2023,
compared to the same period in 2022, largely due to decreases in
depreciation and maintenance expenses.
The Company’s annualized adjusted non-interest
expense as a percentage of average assets(1) was 1.83% for the
quarter ended June 30, 2023, compared to 1.92% for the same
period in 2022. The efficiency ratio (adjusted non-interest expense
divided by the sum of net interest income and non-interest
income)(1) was 53.29% for the three months ended June 30, 2023
compared to 53.83% for the same respective period in 2022.
Income Tax Expense
For the three months ended June 30, 2023, the
Company's income tax expense was $11.6 million with an effective
tax rate of 26.7%, compared with $14.3 million with an effective
tax rate of 26.8% for the three months ended June 30, 2022. The
decrease in tax expense for the three months ended June 30, 2023,
compared with the same period last year was largely the result of a
decrease in taxable income, while the decrease in the effective tax
rate for the three months ended June 30, 2023, compared with the
three months ended June 30, 2022, was largely due to a decrease in
the proportion of income derived from taxable sources.
Six Months Ended
June 30, 2023 compared to
the six months ended June 30, 2022
For the six months ended June 30, 2023, net
income totaled $72.5 million, or $0.97 per basic and diluted share,
compared to net income of $83.2 million, or $1.11 per basic and
diluted share, for the six months ended June 30, 2022.
Net Interest Income and Net Interest
Margin
Net interest income increased $13.4 million to
$207.4 million for the six months ended June 30, 2023, from $194.0
million for same period in 2022. The increase in net interest
income for the six months ended June 30, 2023 was primarily driven
by an increase in the net interest margin resulting from the
favorable repricing of adjustable rate loans, higher market rates
on new loan originations and the originations of higher-yielding
loans, partially offset by the unfavorable repricing of both
deposits and borrowings, a decrease in lower-costing deposits and
an increase in borrowings. Additionally, fees related to the
forgiveness of PPP loans, which are recognized in interest income,
were approximately $4,000 for the six months ended June 30, 2023,
compared to $1.3 million for the six months ended June 30,
2022.
For the six months ended June 30, 2023, the net
interest margin increased 18 basis points to 3.29%, compared to
3.11% for the six months ended June 30, 2022. The weighted average
yield on interest earning assets increased 135 basis points to
4.68% for the six months ended June 30, 2023, compared to 3.33% for
the six months ended June 30, 2022, while the weighted average cost
of interest bearing liabilities increased 154 basis points to 1.84%
for the six months ended June 30, 2023, compared to 0.30% for the
same period last year. The average cost of interest bearing
deposits increased 136 basis points to 1.62% for the six months
ended June 30, 2023, compared to 0.26% for the same period last
year. Average non-interest bearing demand deposits decreased $321.9
million to $2.46 billion for the six months ended June 30, 2023,
compared with $2.78 billion for the six months ended June 30, 2022.
The average cost of total deposits, including non-interest bearing
deposits, was 1.24% for the six months ended June 30, 2023,
compared with 0.19% for the six months ended June 30, 2022. The
average cost of borrowings for the six months ended June 30, 2023
was 3.01%, compared to 0.85% for the same period last year.
Provision for Credit Losses
For the six months ended June 30, 2023, the
Company recorded a $16.4 million provision for credit losses
related to loans, compared with a negative provision for credit
losses of $3.4 million for the six months ended June 30, 2022. The
increase in the allowance for credit losses on loans was
attributable to a worsened economic forecast and related
deterioration in the projected commercial property price indices
over the expected life of the loan portfolio within our CECL model,
combined with an increase in total loans outstanding.
Non-Interest Income and
Expense
For the six months ended June 30, 2023,
non-interest income totaled $41.5 million, an increase of $462,000,
compared to the same period in 2022. Insurance agency income
increased $1.7 million to $8.0 million for the six months ended
June 30, 2023, compared to $6.3 million for the same period in
2022, largely due to increases in contingent commissions, retention
revenue and new business activity. Other income increased $1.4
million to $4.6 million for the six months ended June 30, 2023,
compared to $3.1 million for the same period in 2022, mainly due to
a $2.0 million gain related to the resolution of certain
post-closing conditions following the September 2022 sale of a
foreclosed commercial property, combined with an increase in the
gains on sales of SBA loans, partially offset by a decrease in net
fees on loan-level interest rate swap transactions. Additionally,
BOLI income increased $277,000 to $3.0 million for the six months
ended June 30, 2023, compared to the same period in 2022, primarily
due to greater equity valuations, partially offset by a decrease in
benefit claims recognized. Partially offsetting these increases to
non-interest income, fee income decreased $2.2 million to $12.2
million for the six months ended June 30, 2023, compared to the
same period in 2022, primarily due to a decrease in commercial loan
prepayment fees, while wealth management income decreased $655,000
to $13.8 million for the six months ended June 30, 2023, compared
to the same period in 2022, primarily due to a decrease in the
market value of assets under management.
Non-interest expense totaled $134.0 million for
the six months ended June 30, 2023, an increase of $8.2 million,
compared to $125.7 million for the six months ended June 30, 2022.
The Company recorded a $92,000 provision for credit losses for
off-balance sheet credit exposures for the six months ended June
30, 2023, compared to a $3.4 million negative provision for the
same period in 2022. The $3.5 million increase in the provision for
credit losses for off-balance sheet credit exposures was primarily
the result of the period-over-period relative change in line of
credit utilization and an increase in projected loss factors as a
result of a worsened economic forecast. Merger-related expenses
totaled $3.1 million for the six months ended June 30, 2023, as a
result of transaction costs related to our pending combination with
Lakeland. Other operating expense increased $1.8 million to $21.0
million for the six months ended June 30, 2023, compared to $19.2
million for the six months ended June 30, 2022, primarily due to an
increase in consulting fees and additional expenses related to
foreclosed commercial real estate owned properties. FDIC insurance
expense increased $1.5 million to $4.1 million for the six months
ended June 30, 2023, compared to the same period in 2022, primarily
due to an increase in the assessment rate. Partially offsetting
these increases, net occupancy expense decreased $1.5 million to
$16.4 million for the six months ended June 30, 2023, compared to
the same period in 2022, mainly due to decreases in maintenance and
depreciation expenses. Additionally, compensation and benefits
expense decreased $482,000 to $74.0 million for the six months
ended June 30, 2023, compared to $74.5 million for the six months
ended June 30, 2022, primarily due to decreases in the accrual for
incentive compensation and stock-based compensation, partially
offset by an increase in salary expense.
Income Tax Expense
For the six months ended June 30, 2023, the
Company's income tax expense was $26.1 million with an effective
tax rate of 26.4%, compared with $29.6 million with an effective
tax rate of 26.2% for the six months ended June 30, 2022. The
decrease in tax expense for the six months ended June 30, 2023,
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, 2023, compared with the
prior year period was largely due to non-deductible merger related
transaction costs recognized in the current year, partially offset
by a decrease in the proportion of income derived from taxable
sources.
Asset Quality
The Company’s total non-performing loans at
June 30, 2023 were $45.9 million, or 0.44% of total loans,
compared to $35.5 million, or 0.35% of total loans at
March 31, 2023 and $58.5 million, or 0.57% of total loans at
December 31, 2022. The $10.5 million increase in
non-performing loans at June 30, 2023, compared to the
trailing quarter, consisted of an $8.8 million increase in
non-performing commercial loans, a $766,000 increase in
non-performing multi-family loans, a $532,000 increase in
non-performing consumer loans and a $464,000 increase in
non-performing commercial mortgage loans, partially offset by a
$46,000 decrease in non-performing residential mortgage loans. At
June 30, 2023, impaired loans totaled $37.1 million with
related specific reserves of $4.5 million, compared with impaired
loans totaling $27.5 million with related specific reserves of $1.4
million at March 31, 2023. At December 31, 2022, impaired
loans totaled $42.8 million with related specific reserves of $2.4
million.
At June 30, 2023, the Company’s allowance
for credit losses related to the loan portfolio was 0.97% of total
loans, compared to 0.91% and 0.86% at March 31, 2023 and
December 31, 2022, respectively. The allowance for credit
losses increased $14.1 million to $102.1 million at June 30,
2023, from $88.0 million at December 31, 2022. The increase in
the allowance for credit losses on loans at June 30, 2023
compared to December 31, 2022 was due to a $16.4 million
provision for credit losses, partially offset by net charge-offs of
$1.8 million and a gross reduction of the allowance for credit
losses of $594,000 which was recorded against equity upon the
January 1, 2023 adoption of ASU 2022-02, related to troubled debt
restructurings. The increase in the allowance for credit losses on
loans was primarily attributable to a worsened economic forecast
and related deterioration in the projected commercial property
price index over the expected life of the loan portfolio, combined
with an increase in total loans outstanding.
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, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
| |
Number of
Loans |
|
PrincipalBalanceof
Loans |
|
Number of
Loans |
|
PrincipalBalanceof
Loans |
|
Number of
Loans |
|
PrincipalBalanceof
Loans |
| |
(Dollars in thousands) |
| Accruing past due
loans: |
|
|
|
|
|
|
|
|
|
|
|
| 30 to 59 days past due: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage loans |
2 |
|
$ |
1,445 |
|
|
1 |
|
$ |
3,000 |
|
|
2 |
|
$ |
2,300 |
|
|
Multi-family mortgage loans |
1 |
|
|
3,853 |
|
|
1 |
|
|
3,875 |
|
|
1 |
|
|
790 |
|
|
Construction loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
905 |
|
|
Residential mortgage loans |
11 |
|
|
1,427 |
|
|
9 |
|
|
2,064 |
|
|
10 |
|
|
1,411 |
|
|
Total mortgage loans |
14 |
|
|
6,725 |
|
|
11 |
|
|
8,939 |
|
|
14 |
|
|
5,406 |
|
|
Commercial loans |
10 |
|
|
3,021 |
|
|
4 |
|
|
1,070 |
|
|
5 |
|
|
964 |
|
|
Consumer loans |
15 |
|
|
957 |
|
|
22 |
|
|
2,106 |
|
|
18 |
|
|
885 |
|
|
Total 30 to 59 days past due |
39 |
|
$ |
10,703 |
|
|
37 |
|
$ |
12,115 |
|
|
37 |
|
$ |
7,255 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| 60 to 89 days past due: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage loans |
2 |
|
$ |
1,137 |
|
|
4 |
|
$ |
1,528 |
|
|
2 |
|
$ |
412 |
|
|
Multi-family mortgage loans |
— |
|
|
— |
|
|
1 |
|
|
785 |
|
|
— |
|
|
— |
|
|
Construction loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
1,097 |
|
|
Residential mortgage loans |
6 |
|
|
1,171 |
|
|
6 |
|
|
639 |
|
|
9 |
|
|
1,114 |
|
|
Total mortgage loans |
8 |
|
|
2,308 |
|
|
11 |
|
|
2,952 |
|
|
12 |
|
|
2,623 |
|
|
Commercial loans |
2 |
|
|
90 |
|
|
2 |
|
|
3,028 |
|
|
5 |
|
|
1,014 |
|
|
Consumer loans |
3 |
|
|
147 |
|
|
1 |
|
|
150 |
|
|
4 |
|
|
147 |
|
|
Total 60 to 89 days past due |
13 |
|
|
2,545 |
|
|
14 |
|
|
6,130 |
|
|
21 |
|
|
3,784 |
|
|
Total accruing past due loans |
52 |
|
$ |
13,248 |
|
|
51 |
|
$ |
18,245 |
|
|
58 |
|
$ |
11,039 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage loans |
7 |
|
$ |
7,279 |
|
|
5 |
|
$ |
6,815 |
|
|
10 |
|
$ |
28,212 |
|
|
Multi-family mortgage loans |
2 |
|
|
2,314 |
|
|
1 |
|
|
1,548 |
|
|
1 |
|
|
1,565 |
|
|
Construction loans |
2 |
|
|
1,874 |
|
|
2 |
|
|
1,874 |
|
|
2 |
|
|
1,878 |
|
|
Residential mortgage loans |
12 |
|
|
1,698 |
|
|
12 |
|
|
1,744 |
|
|
14 |
|
|
1,928 |
|
|
Total mortgage loans |
23 |
|
|
13,165 |
|
|
20 |
|
|
11,981 |
|
|
27 |
|
|
33,583 |
|
|
Commercial loans |
30 |
|
|
31,885 |
|
|
30 |
|
|
23,129 |
|
|
34 |
|
|
24,188 |
|
|
Consumer loans |
8 |
|
|
878 |
|
|
10 |
|
|
346 |
|
|
10 |
|
|
738 |
|
|
Total non-accrual loans |
61 |
|
$ |
45,928 |
|
|
60 |
|
$ |
35,456 |
|
|
71 |
|
$ |
58,509 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-performing loans to total
loans |
|
|
|
0.44 |
% |
|
|
|
|
0.35 |
% |
|
|
|
|
0.57 |
% |
| Allowance for loan losses to
total non-performing loans |
|
|
|
222.25 |
% |
|
|
|
|
261.61 |
% |
|
|
|
|
150.44 |
% |
| Allowance for loan losses to
total loans |
|
|
|
0.97 |
% |
|
|
|
|
0.91 |
% |
|
|
|
|
0.86 |
% |
At June 30, 2023 and December 31,
2022, the Company held foreclosed assets of $13.7 million and $2.1
million, respectively. During the six months ended June 30, 2023,
there were three additions to foreclosed assets with an aggregate
carrying value of $12.3 million, and three properties sold with an
aggregate carrying value of $768,000. Foreclosed assets at
June 30, 2023 consisted primarily of commercial real estate.
Total non-performing assets at June 30, 2023 decreased $1.0
million to $59.6 million, or 0.42% of total assets, from $60.6
million, or 0.44% of total assets at December 31, 2022.
Balance Sheet Summary
Total assets at June 30, 2023 were $14.03
billion, a $246.2 million increase from December 31, 2022. The
increase in total assets was primarily due to a $281.6 million
increase in total loans, partially offset by a $37.8 million
decrease in total investments.
The Company’s loan portfolio totaled $10.53
billion at June 30, 2023 and $10.25 billion at
December 31, 2022. The loan portfolio consisted of the
following:
| |
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
| |
(Dollars in thousands) |
| Mortgage loans: |
|
|
|
|
|
|
Commercial |
$ |
4,373,436 |
|
|
$ |
4,292,853 |
|
|
$ |
4,316,185 |
|
|
Multi-family |
|
1,645,770 |
|
|
|
1,580,297 |
|
|
|
1,513,818 |
|
|
Construction |
|
707,234 |
|
|
|
658,902 |
|
|
|
715,494 |
|
|
Residential |
|
1,166,159 |
|
|
|
1,174,035 |
|
|
|
1,177,698 |
|
|
Total mortgage loans |
|
7,892,599 |
|
|
|
7,706,087 |
|
|
|
7,723,195 |
|
| Commercial loans |
|
2,348,447 |
|
|
|
2,228,207 |
|
|
|
2,233,670 |
|
| Consumer loans |
|
301,306 |
|
|
|
301,672 |
|
|
|
304,780 |
|
|
Total gross loans |
|
10,542,352 |
|
|
|
10,235,966 |
|
|
|
10,261,645 |
|
| Premiums on purchased loans |
|
1,374 |
|
|
|
1,364 |
|
|
|
1,380 |
|
| Net deferred fees and unearned
discounts |
|
(13,195 |
) |
|
|
(13,116 |
) |
|
|
(14,142 |
) |
|
Total loans |
$ |
10,530,531 |
|
|
$ |
10,224,214 |
|
|
$ |
10,248,883 |
|
During the six months ended June 30, 2023, the
loan portfolio had net increases of $57.3 million in commercial
mortgage loans, $132.0 million in multi-family loans and $114.8
million in commercial loans, partially offset by net decreases in
residential mortgage, construction and consumer loans of $11.5
million $8.3 million and $3.5 million, respectively. Commercial
loans, consisting of commercial real estate, multi-family,
commercial and construction loans, represented 86.1% of the loan
portfolio at June 30, 2023, compared to 85.6% at
December 31, 2022.
For the six months ended June 30, 2023, loan
funding, including advances on lines of credit, totaled $1.79
billion, compared with $2.15 billion for the same period in
2022.
At June 30, 2023, the Company’s unfunded
loan commitments totaled $2.02 billion, including commitments of
$1.13 billion in commercial loans, $491.1 million in construction
loans and $75.1 million in commercial mortgage loans. Unfunded loan
commitments at December 31, 2022 and June 30, 2022 were
$2.06 billion.
The loan pipeline, consisting of work-in-process
and loans approved pending closing, totaled $1.74 billion at
June 30, 2023, compared to $1.29 billion and $1.43 billion at
December 31, 2022 and June 30, 2022, respectively.
Total investment securities were $2.22 billion
at June 30, 2023, a $37.8 million decrease from
December 31, 2022. This decrease was primarily due to
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 and an
improvement in unrealized losses on available for sale debt
securities.
Total deposits decreased $301.9 million during
the six months ended June 30, 2023, to $10.26 billion. Total
savings and demand deposit accounts decreased $570.8 million to
$9.24 billion at June 30, 2023, while total time deposits
increased $268.9 million to $1.02 billion at June 30, 2023.
The decrease in savings and demand deposits was largely
attributable to a $285.5 million decrease in non-interest bearing
demand deposits, a $269.5 million decrease in money market deposits
and a $163.3 million decrease in savings deposits, partially offset
by a $147.6 million increase in interest bearing demand deposits.
During the six months ended June 30, 2023, deposit balances from
traditional non-interest and interest bearing demand deposits
transitioned into our ICS product, as a method to increase the
level of customers' deposit insurance in light of recent bank
deposit turmoil. The Bank's ICS deposits increased $324.0 million
to $382.9 million at March 31, 2023, from $58.9 million at
December 31, 2022. The increase in time deposits consisted of
a $258.3 million increase in retail time deposits and a $10.6
million increase in brokered time deposits.
Borrowed funds increased $512.3 million during
the six months ended June 30, 2023, to $1.85 billion. The increase
in borrowings was largely due to asset funding requirements,
partially to replace the outflow of deposits. Borrowed funds
represented 13.2% of total assets at June 30, 2023, an
increase from 9.7% at December 31, 2022.
Stockholders’ equity increased $44.8 million
during the six months ended June 30, 2023, to $1.64 billion,
primarily due to net income earned for the period and an
improvement in unrealized losses on available for sale debt
securities, partially offset by cash dividends paid to
stockholders. For the six months ended June 30, 2023, common stock
repurchases totaled 71,357 shares at an average cost of $23.32 per
share, all of which were made in connection with withholding to
cover income taxes on the vesting of stock-based compensation. At
June 30, 2023, 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, 2023 were $21.75 and $15.66,
respectively, compared with $21.25 and $15.12, respectively, at
December 31, 2022.
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 28, 2023 at 10:00
a.m. Eastern Time to discuss the Company’s financial results for
the quarter ended June 30, 2023. The call may be accessed by
dialing 1-888-412-4131 (United States Toll Free) and 1-646-960-0134
(United States Local). Speakers will need to enter conference ID
code (3610756) 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 the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. 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, the effects of the recent turmoil
in the banking industry (including the closing of three financial
institutions), 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,
the availability of and costs associated with sources of liquidity,
the ability to complete, or any delays in completing, the pending
merger between the Company and Lakeland; any failure to realize the
anticipated benefits of the transaction when expected or at all;
certain restrictions during the pendency of the transaction that
may impact the Company’s ability to pursue certain business
opportunities or strategic transactions; the possibility that the
transaction may be more expensive to complete than anticipated,
including as a result of unexpected factors or events, diversion of
management’s attention from ongoing business operations and
opportunities; and potential adverse reactions or changes to
business or employee relationships, including those resulting from
the completion of the merger and integration of the companies.
The Company cautions readers not to place undue
reliance on any such forward-looking statements which speak only as
of the date they are 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 assume any duty, and does not undertake, to
update any forward-looking statements to reflect events or
circumstances after the date of this statement.
Footnotes
(1) Annualized adjusted
pre-tax, pre-provision return on average assets, annualized return
on average tangible equity, tangible book value per share,
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
SUBSIDIARY |
|
Consolidated Financial Highlights |
|
(Dollars in Thousands, except share data) (Unaudited) |
| |
|
|
|
| |
At or for the Three months
ended |
|
At or for the Six Months
Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Statement of
Income |
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
99,106 |
|
|
$ |
108,324 |
|
|
$ |
99,475 |
|
|
$ |
207,430 |
|
|
$ |
194,001 |
|
|
Provision for credit losses |
|
10,397 |
|
|
|
6,001 |
|
|
|
2,996 |
|
|
|
16,398 |
|
|
|
(3,409 |
) |
|
Non-interest income |
|
19,387 |
|
|
|
22,152 |
|
|
|
20,932 |
|
|
|
41,540 |
|
|
|
41,078 |
|
|
Non-interest expense |
|
64,463 |
|
|
|
69,485 |
|
|
|
63,846 |
|
|
|
133,950 |
|
|
|
125,730 |
|
|
Income before income tax expense |
|
43,633 |
|
|
|
54,990 |
|
|
|
53,565 |
|
|
|
98,622 |
|
|
|
112,758 |
|
|
Net income |
|
32,003 |
|
|
|
40,536 |
|
|
|
39,228 |
|
|
|
72,539 |
|
|
|
83,191 |
|
|
Diluted earnings per share |
$ |
0.43 |
|
|
$ |
0.54 |
|
|
$ |
0.53 |
|
|
$ |
0.97 |
|
|
$ |
1.11 |
|
|
Interest rate spread |
|
2.60 |
% |
|
|
3.09 |
% |
|
|
3.12 |
% |
|
|
2.84 |
% |
|
|
3.03 |
% |
|
Net interest margin |
|
3.11 |
% |
|
|
3.48 |
% |
|
|
3.21 |
% |
|
|
3.29 |
% |
|
|
3.11 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Profitability |
|
|
|
|
|
|
|
|
|
|
Annualized return on average assets |
|
0.93 |
% |
|
|
1.20 |
% |
|
|
1.16 |
% |
|
|
1.06 |
% |
|
|
1.23 |
% |
|
Annualized return on average equity |
|
7.76 |
% |
|
|
10.11 |
% |
|
|
9.83 |
% |
|
|
8.92 |
% |
|
|
10.21 |
% |
|
Annualized return on average tangible equity (1) |
|
10.75 |
% |
|
|
14.10 |
% |
|
|
13.82 |
% |
|
|
12.40 |
% |
|
|
14.22 |
% |
|
Annualized adjusted non-interest expense to average assets (3) |
|
1.83 |
% |
|
|
2.00 |
% |
|
|
1.92 |
% |
|
|
1.91 |
% |
|
|
1.91 |
% |
|
Efficiency ratio (4) |
|
53.29 |
% |
|
|
51.85 |
% |
|
|
53.83 |
% |
|
|
52.54 |
% |
|
|
54.91 |
% |
| |
|
|
|
|
|
|
|
|
|
| Asset
Quality |
|
|
|
|
|
|
|
|
|
|
Non-accrual loans |
|
|
$ |
35,456 |
|
|
|
|
$ |
45,928 |
|
|
$ |
40,448 |
|
|
90+ and still accruing |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
Non-performing loans |
|
|
|
35,456 |
|
|
|
|
|
45,928 |
|
|
|
40,448 |
|
|
Foreclosed assets |
|
|
|
13,743 |
|
|
|
|
|
13,697 |
|
|
|
9,076 |
|
|
Non-performing assets |
|
|
|
49,199 |
|
|
|
|
|
59,625 |
|
|
|
49,524 |
|
|
Non-performing loans to total loans |
|
|
|
0.35 |
% |
|
|
|
|
0.44 |
% |
|
|
0.40 |
% |
|
Non-performing assets to total assets |
|
|
|
0.36 |
% |
|
|
|
|
0.42 |
% |
|
|
0.36 |
% |
|
Allowance for loan losses |
|
|
$ |
92,758 |
|
|
|
|
$ |
102,073 |
|
|
$ |
79,016 |
|
|
Allowance for loan losses to total non-performing loans |
|
|
|
261.61 |
% |
|
|
|
|
222.25 |
% |
|
|
195.35 |
% |
|
Allowance for loan losses to total loans |
|
|
|
0.91 |
% |
|
|
|
|
0.97 |
% |
|
|
0.79 |
% |
|
Net loan charge-offs (recoveries) |
$ |
1,085 |
|
|
$ |
671 |
|
|
$ |
259 |
|
|
$ |
1,756 |
|
|
$ |
(1,676 |
) |
|
Annualized net loan charge-offs (recoveries) to average total
loans |
|
0.04 |
% |
|
|
0.03 |
% |
|
|
0.01 |
% |
|
|
0.03 |
% |
|
(0.02)% |
| |
|
|
|
|
|
|
|
|
|
| Average Balance Sheet
Data |
|
|
|
|
|
|
|
|
|
|
Assets |
$ |
13,833,055 |
|
|
$ |
13,732,708 |
|
|
$ |
13,541,209 |
|
|
$ |
13,783,159 |
|
|
$ |
13,616,899 |
|
|
Loans, net |
|
10,238,224 |
|
|
|
10,093,856 |
|
|
|
9,683,027 |
|
|
|
10,166,439 |
|
|
|
9,582,986 |
|
|
Earning assets |
|
12,575,967 |
|
|
|
12,418,530 |
|
|
|
12,328,742 |
|
|
|
12,497,684 |
|
|
|
12,427,528 |
|
|
Core deposits |
|
9,297,058 |
|
|
|
9,720,797 |
|
|
|
10,462,293 |
|
|
|
9,507,756 |
|
|
|
10,506,515 |
|
|
Borrowings |
|
1,658,809 |
|
|
|
1,224,279 |
|
|
|
527,630 |
|
|
|
1,442,744 |
|
|
|
538,593 |
|
|
Interest-bearing liabilities |
|
9,565,814 |
|
|
|
9,264,564 |
|
|
|
8,918,786 |
|
|
|
9,416,020 |
|
|
|
8,962,144 |
|
|
Stockholders' equity |
|
1,653,677 |
|
|
|
1,626,370 |
|
|
|
1,601,245 |
|
|
|
1,640,099 |
|
|
|
1,643,549 |
|
|
Average yield on interest-earning assets |
|
4.73 |
% |
|
|
4.63 |
% |
|
|
3.43 |
% |
|
|
4.68 |
% |
|
|
3.33 |
% |
|
Average cost of interest-bearing liabilities |
|
2.13 |
% |
|
|
1.54 |
% |
|
|
0.31 |
% |
|
|
1.84 |
% |
|
|
0.30 |
% |
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) Book and Tangible
Book Value per Share |
|
|
|
| |
|
|
|
|
|
|
At June 30, |
|
At December 31, |
| |
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Total stockholders' equity |
|
|
|
|
|
|
$ |
1,642,471 |
|
|
$ |
1,597,703 |
|
|
Less: total intangible assets |
|
|
|
|
|
|
|
459,383 |
|
|
|
460,892 |
|
|
Total tangible stockholders' equity |
|
|
|
|
|
|
$ |
1,183,088 |
|
|
$ |
1,136,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
|
|
|
|
|
|
75,530,425 |
|
|
|
75,169,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share (total stockholders' equity/shares
outstanding) |
|
|
|
|
|
|
$ |
21.75 |
|
|
$ |
21.25 |
|
|
Tangible book value per share (total tangible stockholders'
equity/shares outstanding) |
|
|
|
|
|
|
$ |
15.66 |
|
|
$ |
15.12 |
|
| |
|
|
|
|
|
|
|
|
|
| (2) Annualized Return
on Average Tangible Equity |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Total average stockholders' equity |
$ |
1,653,677 |
|
|
$ |
1,626,370 |
|
|
$ |
1,601,245 |
|
|
$ |
1,640,099 |
|
|
$ |
1,643,549 |
|
|
Less: total average intangible assets |
|
459,865 |
|
|
|
460,631 |
|
|
|
463,039 |
|
|
|
460,246 |
|
|
|
463,462 |
|
|
Total average tangible stockholders' equity |
$ |
1,193,812 |
|
|
$ |
1,165,739 |
|
|
$ |
1,138,206 |
|
|
$ |
1,179,853 |
|
|
$ |
1,180,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
32,003 |
|
|
$ |
40,536 |
|
|
$ |
39,228 |
|
|
$ |
72,539 |
|
|
$ |
83,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average tangible equity (net income/total
average tangible stockholders' equity) |
|
10.75 |
% |
|
|
14.10 |
% |
|
|
13.82 |
% |
|
|
12.40 |
% |
|
|
14.22 |
% |
| |
|
|
|
|
|
|
|
|
|
| (3) Annualized
Pre-Tax, Pre-Provision ("PTPP") Return on Average
Assets |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income |
$ |
32,003 |
|
|
$ |
40,536 |
|
|
$ |
39,228 |
|
|
$ |
72,539 |
|
|
$ |
83,191 |
|
|
Adjustments to net income: |
|
|
|
|
|
|
|
|
|
|
Provision for credit losses |
|
10,397 |
|
|
|
6,001 |
|
|
|
2,996 |
|
|
|
16,398 |
|
|
|
(3,409 |
) |
|
Credit loss (benefit) expense for off-balance sheet credit
exposure |
|
(647 |
) |
|
|
739 |
|
|
|
(973 |
) |
|
|
92 |
|
|
|
(3,363 |
) |
|
Merger-related transaction costs |
|
1,961 |
|
|
|
1,100 |
|
|
|
— |
|
|
|
3,060 |
|
|
|
— |
|
|
Income tax expense |
|
11,630 |
|
|
|
14,454 |
|
|
|
14,337 |
|
|
|
26,083 |
|
|
|
29,567 |
|
|
PTPP income |
$ |
55,344 |
|
|
$ |
62,830 |
|
|
$ |
55,588 |
|
|
$ |
118,172 |
|
|
$ |
105,986 |
|
| |
|
|
|
|
|
|
|
|
|
|
Annualized PTPP income |
$ |
221,984 |
|
|
$ |
254,811 |
|
|
$ |
222,963 |
|
|
$ |
238,303 |
|
|
$ |
213,729 |
|
|
Average assets |
$ |
13,833,055 |
|
|
$ |
13,732,708 |
|
|
$ |
13,541,209 |
|
|
$ |
13,783,160 |
|
|
$ |
13,616,899 |
|
| |
|
|
|
|
|
|
|
|
|
|
Annualized PTPP return on average assets |
|
1.60 |
% |
|
|
1.86 |
% |
|
|
1.65 |
% |
|
|
1.73 |
% |
|
|
1.57 |
% |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| (4) Annualized
Adjusted Non-Interest Expense to Average Assets |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Reported non-interest expense |
$ |
64,463 |
|
|
$ |
69,485 |
|
|
$ |
63,846 |
|
|
$ |
133,950 |
|
|
$ |
125,730 |
|
|
Adjustments to non-interest expense: |
|
|
|
|
|
|
|
|
|
|
Credit loss (benefit) expense for off-balance sheet credit
exposures |
|
(647 |
) |
|
|
739 |
|
|
|
(973 |
) |
|
|
92 |
|
|
|
(3,363 |
) |
|
Merger-related transaction costs |
|
1,961 |
|
|
|
1,100 |
|
|
|
— |
|
|
|
3,060 |
|
|
|
— |
|
|
Adjusted non-interest expense |
$ |
63,149 |
|
|
$ |
67,646 |
|
|
$ |
64,819 |
|
|
$ |
130,798 |
|
|
$ |
129,093 |
|
| |
|
|
|
|
|
|
|
|
|
|
Annualized adjusted non-interest expense |
$ |
253,290 |
|
|
$ |
274,342 |
|
|
$ |
259,988 |
|
|
$ |
263,764 |
|
|
$ |
260,326 |
|
| |
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
13,833,055 |
|
|
$ |
13,732,708 |
|
|
$ |
13,541,209 |
|
|
$ |
13,783,160 |
|
|
|
13,616,899 |
|
| |
|
|
|
|
|
|
|
|
|
|
Annualized adjusted non-interest expense/average assets |
|
1.83 |
% |
|
|
2.00 |
% |
|
|
1.92 |
% |
|
|
1.91 |
% |
|
|
1.91 |
% |
| |
|
|
|
|
|
|
|
|
|
| (5) Efficiency Ratio
Calculation |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
| |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net interest income |
$ |
99,106 |
|
|
$ |
108,324 |
|
|
$ |
99,475 |
|
|
$ |
207,430 |
|
|
$ |
194,001 |
|
|
Non-interest income |
|
19,387 |
|
|
|
22,152 |
|
|
|
20,932 |
|
|
|
41,540 |
|
|
|
41,078 |
|
|
Total income |
$ |
118,493 |
|
|
$ |
130,476 |
|
|
$ |
120,407 |
|
|
$ |
248,970 |
|
|
$ |
235,079 |
|
| |
|
|
|
|
|
|
|
|
|
|
Adjusted non-interest expense |
$ |
63,149 |
|
|
$ |
67,646 |
|
|
$ |
64,819 |
|
|
$ |
130,798 |
|
|
$ |
129,093 |
|
| |
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (adjusted non-interest expense/income) |
|
53.29 |
% |
|
|
51.85 |
% |
|
|
53.83 |
% |
|
|
52.54 |
% |
|
|
54.91 |
% |
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Consolidated Statements of Financial Condition |
|
June 30, 2023 (Unaudited) and December 31, 2022 |
|
(Dollars in Thousands) |
| |
|
|
|
|
Assets |
June 30, 2023 |
|
December 31, 2022 |
|
Cash and due from banks |
$ |
208,842 |
|
|
$ |
186,490 |
|
| Short-term investments |
|
30 |
|
|
|
18 |
|
|
Total cash and cash equivalents |
|
208,872 |
|
|
|
186,508 |
|
| Available for sale debt
securities, at fair value |
|
1,749,889 |
|
|
|
1,803,548 |
|
|
Held to maturity debt securities, net (fair value of $365,029 at
June 30, 2023 (unaudited) and $373,468 at December 31, 2022) |
|
378,894 |
|
|
|
387,923 |
|
| Equity securities, at fair
value |
|
1,238 |
|
|
|
1,147 |
|
| Federal Home Loan Bank
stock |
|
93,330 |
|
|
|
68,554 |
|
| Loans |
|
10,530,531 |
|
|
|
10,248,883 |
|
|
Less allowance for credit losses |
|
102,073 |
|
|
|
88,023 |
|
|
Net loans |
|
10,428,458 |
|
|
|
10,160,860 |
|
| Foreclosed assets, net |
|
13,697 |
|
|
|
2,124 |
|
| Banking premises and
equipment, net |
|
70,602 |
|
|
|
79,794 |
|
| Accrued interest
receivable |
|
53,845 |
|
|
|
51,903 |
|
| Intangible assets |
|
459,383 |
|
|
|
460,892 |
|
| Bank-owned life insurance |
|
241,107 |
|
|
|
239,040 |
|
| Other assets |
|
330,288 |
|
|
|
341,143 |
|
|
Total assets |
$ |
14,029,603 |
|
|
$ |
13,783,436 |
|
| |
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
| Deposits: |
|
|
|
|
Demand deposits |
$ |
7,965,529 |
|
|
$ |
8,373,005 |
|
|
Savings deposits |
|
1,275,262 |
|
|
|
1,438,583 |
|
|
Certificates of deposit of $100,000 or more |
|
666,276 |
|
|
|
504,627 |
|
|
Other time deposits |
|
354,053 |
|
|
|
246,809 |
|
|
Total deposits |
|
10,261,120 |
|
|
|
10,563,024 |
|
| Mortgage escrow deposits |
|
44,280 |
|
|
|
35,705 |
|
| Borrowed funds |
|
1,849,714 |
|
|
|
1,337,370 |
|
| Subordinated debentures |
|
10,596 |
|
|
|
10,493 |
|
| Other liabilities |
|
221,422 |
|
|
|
239,141 |
|
|
Total liabilities |
|
12,387,132 |
|
|
|
12,185,733 |
|
| |
|
|
|
| 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 75,530,425 shares outstanding at June
30, 2023 and 76,169,196 outstanding at December 31, 2022. |
|
832 |
|
|
|
832 |
|
| Additional paid-in
capital |
|
986,150 |
|
|
|
981,138 |
|
| Retained earnings |
|
954,403 |
|
|
|
918,158 |
|
| Accumulated other
comprehensive (loss) income |
|
(162,493 |
) |
|
|
(165,045 |
) |
| Treasury stock |
|
(127,818 |
) |
|
|
(127,154 |
) |
| Unallocated common stock held
by the Employee Stock Ownership Plan |
|
(8,603 |
) |
|
|
(10,226 |
) |
| Common Stock acquired by the
Directors' Deferred Fee Plan |
|
(3,150 |
) |
|
|
(3,427 |
) |
| Deferred Compensation -
Directors' Deferred Fee Plan |
|
3,150 |
|
|
|
3,427 |
|
|
Total stockholders' equity |
|
1,642,471 |
|
|
|
1,597,703 |
|
|
Total liabilities and stockholders' equity |
$ |
14,029,603 |
|
|
$ |
13,783,436 |
|
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Consolidated Statements of Income |
|
Three months ended June 30, 2023, March 31, 2023 and
June 30, 2022, and six months ended June 30, 2023 and
2022 (Unaudited) |
|
(Dollars in Thousands, except per share data) |
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
| Interest income: |
|
|
|
|
|
|
|
|
|
|
Real estate secured loans |
$ |
99,302 |
|
|
$ |
95,988 |
|
|
$ |
69,073 |
|
|
$ |
195,290 |
|
$ |
132,908 |
|
|
Commercial loans |
|
31,426 |
|
|
|
28,683 |
|
|
|
22,363 |
|
|
|
60,109 |
|
|
45,184 |
|
|
Consumer loans |
|
4,431 |
|
|
|
4,242 |
|
|
|
3,344 |
|
|
|
8,673 |
|
|
6,483 |
|
|
Available for sale debt securities, equity securities and Federal
Home Loan Bank stock |
|
11,432 |
|
|
|
11,430 |
|
|
|
8,454 |
|
|
|
22,862 |
|
|
16,406 |
|
|
Held to maturity debt securities |
|
2,357 |
|
|
|
2,368 |
|
|
|
2,489 |
|
|
|
4,725 |
|
|
5,085 |
|
|
Deposits, federal funds sold and other short-term investments |
|
948 |
|
|
|
845 |
|
|
|
562 |
|
|
|
1,793 |
|
|
1,209 |
|
|
Total interest income |
|
149,896 |
|
|
|
143,556 |
|
|
|
106,285 |
|
|
|
293,452 |
|
|
207,275 |
|
| |
|
|
|
|
|
|
|
|
|
| Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
36,447 |
|
|
|
27,510 |
|
|
|
5,576 |
|
|
|
63,957 |
|
|
10,763 |
|
|
Borrowed funds |
|
14,088 |
|
|
|
7,476 |
|
|
|
1,104 |
|
|
|
21,564 |
|
|
2,272 |
|
|
Subordinated debt |
|
255 |
|
|
|
246 |
|
|
|
130 |
|
|
|
501 |
|
|
239 |
|
|
Total interest expense |
|
50,790 |
|
|
|
35,232 |
|
|
|
6,810 |
|
|
|
86,022 |
|
|
13,274 |
|
|
Net interest income |
|
99,106 |
|
|
|
108,324 |
|
|
|
99,475 |
|
|
|
207,430 |
|
|
194,001 |
|
| Provision charge (benefit) for
credit losses |
|
10,397 |
|
|
|
6,001 |
|
|
|
2,996 |
|
|
|
16,398 |
|
|
(3,409 |
) |
|
Net interest income after provision for credit losses |
|
88,709 |
|
|
|
102,323 |
|
|
|
96,479 |
|
|
|
191,032 |
|
|
197,410 |
|
| |
|
|
|
|
|
|
|
|
|
| Non-interest income: |
|
|
|
|
|
|
|
|
|
|
Fees |
|
5,775 |
|
|
|
6,387 |
|
|
|
7,424 |
|
|
|
12,162 |
|
|
14,313 |
|
|
Wealth management income |
|
6,919 |
|
|
|
6,915 |
|
|
|
7,024 |
|
|
|
13,834 |
|
|
14,489 |
|
|
Insurance agency income |
|
3,847 |
|
|
|
4,102 |
|
|
|
2,850 |
|
|
|
7,950 |
|
|
6,270 |
|
|
Bank-owned life insurance |
|
1,534 |
|
|
|
1,484 |
|
|
|
1,563 |
|
|
|
3,018 |
|
|
2,741 |
|
|
Net gain on securities transactions |
|
29 |
|
|
|
(5 |
) |
|
|
141 |
|
|
|
24 |
|
|
157 |
|
|
Other income |
|
1,283 |
|
|
|
3,269 |
|
|
|
1,930 |
|
|
|
4,552 |
|
|
3,108 |
|
|
Total non-interest income |
|
19,387 |
|
|
|
22,152 |
|
|
|
20,932 |
|
|
|
41,540 |
|
|
41,078 |
|
| |
|
|
|
|
|
|
|
|
|
| Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
35,283 |
|
|
|
38,737 |
|
|
|
37,437 |
|
|
|
74,021 |
|
|
74,503 |
|
|
Net occupancy expense |
|
7,949 |
|
|
|
8,410 |
|
|
|
8,479 |
|
|
|
16,360 |
|
|
17,810 |
|
|
Data processing expense |
|
5,716 |
|
|
|
5,508 |
|
|
|
5,632 |
|
|
|
11,224 |
|
|
10,976 |
|
|
FDIC Insurance |
|
2,125 |
|
|
|
1,937 |
|
|
|
1,350 |
|
|
|
4,061 |
|
|
2,555 |
|
|
Amortization of intangibles |
|
749 |
|
|
|
762 |
|
|
|
873 |
|
|
|
1,511 |
|
|
1,732 |
|
|
Advertising and promotion expense |
|
1,379 |
|
|
|
1,232 |
|
|
|
1,222 |
|
|
|
2,589 |
|
|
2,326 |
|
|
Credit loss (benefit) expense for off-balance sheet exposures |
|
(647 |
) |
|
|
739 |
|
|
|
(973 |
) |
|
|
92 |
|
|
(3,363 |
) |
|
Merger-related expenses |
|
1,960 |
|
|
|
1,100 |
|
|
|
— |
|
|
|
3,060 |
|
|
— |
|
|
Other operating expenses |
|
9,949 |
|
|
|
11,060 |
|
|
|
9,826 |
|
|
|
21,032 |
|
|
19,191 |
|
|
Total non-interest expense |
|
64,463 |
|
|
|
69,485 |
|
|
|
63,846 |
|
|
|
133,950 |
|
|
125,730 |
|
|
Income before income tax expense |
|
43,633 |
|
|
|
54,990 |
|
|
|
53,565 |
|
|
|
98,622 |
|
|
112,758 |
|
| Income tax expense |
|
11,630 |
|
|
|
14,454 |
|
|
|
14,337 |
|
|
|
26,083 |
|
|
29,567 |
|
|
Net income |
$ |
32,003 |
|
|
$ |
40,536 |
|
|
$ |
39,228 |
|
|
$ |
72,539 |
|
$ |
83,191 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic earnings per share |
$ |
0.43 |
|
|
$ |
0.54 |
|
|
$ |
0.53 |
|
|
$ |
0.97 |
|
$ |
1.11 |
|
| Average basic shares
outstanding |
|
74,823,272 |
|
|
|
74,645,336 |
|
|
|
74,328,632 |
|
|
|
74,734,795 |
|
|
75,068,154 |
|
| |
|
|
|
|
|
|
|
|
|
| Diluted earnings per
share |
$ |
0.43 |
|
|
$ |
0.54 |
|
|
$ |
0.53 |
|
|
$ |
0.97 |
|
$ |
1.11 |
|
| Average diluted shares
outstanding |
|
74,830,187 |
|
|
|
74,702,527 |
|
|
|
74,400,788 |
|
|
|
74,766,848 |
|
|
75,152,286 |
|
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Net Interest Margin Analysis |
|
Quarterly Average Balances |
|
(Dollars in Thousands) (Unaudited) |
| |
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
| |
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
| Interest-Earning
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
$ |
73,470 |
|
$ |
947 |
|
5.17 |
% |
|
$ |
72,022 |
|
$ |
845 |
|
4.76 |
% |
|
$ |
77,761 |
|
$ |
191 |
|
0.98 |
% |
|
Federal funds sold and other short-term investments |
|
88 |
|
|
1 |
|
6.75 |
% |
|
|
29 |
|
|
— |
|
3.70 |
% |
|
|
99,825 |
|
|
371 |
|
1.49 |
% |
|
Available for sale debt securities |
|
1,801,050 |
|
|
10,290 |
|
2.29 |
% |
|
|
1,808,619 |
|
|
10,402 |
|
2.30 |
% |
|
|
2,023,199 |
|
|
8,093 |
|
1.60 |
% |
|
Held to maturity debt securities, net (1) |
|
379,958 |
|
|
2,357 |
|
2.48 |
% |
|
|
383,907 |
|
|
2,368 |
|
2.47 |
% |
|
|
412,229 |
|
|
2,489 |
|
2.41 |
% |
|
Equity securities, at fair value |
|
1,006 |
|
|
— |
|
— |
% |
|
|
991 |
|
|
— |
|
— |
% |
|
|
1,019 |
|
|
— |
|
— |
% |
|
Federal Home Loan Bank stock |
|
82,171 |
|
|
1,142 |
|
5.56 |
% |
|
|
59,106 |
|
|
1,028 |
|
6.96 |
% |
|
|
31,682 |
|
|
361 |
|
4.55 |
% |
|
Net loans: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total mortgage loans |
|
7,701,072 |
|
|
99,302 |
|
5.11 |
% |
|
|
7,643,140 |
|
|
95,988 |
|
5.02 |
% |
|
|
7,252,665 |
|
|
69,073 |
|
3.78 |
% |
|
Total commercial loans |
|
2,234,043 |
|
|
31,426 |
|
5.59 |
% |
|
|
2,146,658 |
|
|
28,683 |
|
5.37 |
% |
|
|
2,107,681 |
|
|
22,363 |
|
4.22 |
% |
|
Total consumer loans |
|
303,109 |
|
|
4,431 |
|
5.86 |
% |
|
|
304,058 |
|
|
4,242 |
|
5.66 |
% |
|
|
322,681 |
|
|
3,344 |
|
4.16 |
% |
|
Total net loans |
|
10,238,224 |
|
|
135,159 |
|
5.24 |
% |
|
|
10,093,856 |
|
|
128,913 |
|
5.12 |
% |
|
|
9,683,027 |
|
|
94,780 |
|
3.89 |
% |
|
Total interest-earning assets |
$ |
12,575,967 |
|
$ |
149,896 |
|
4.73 |
% |
|
$ |
12,418,530 |
|
$ |
143,556 |
|
4.63 |
% |
|
$ |
12,328,742 |
|
$ |
106,285 |
|
3.43 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-Interest Earning
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
129,979 |
|
|
|
|
|
|
142,953 |
|
|
|
|
|
|
129,953 |
|
|
|
|
|
Other assets |
|
1,127,109 |
|
|
|
|
|
|
1,171,225 |
|
|
|
|
|
|
1,082,514 |
|
|
|
|
|
Total assets |
$ |
13,833,055 |
|
|
|
|
|
$ |
13,732,708 |
|
|
|
|
|
$ |
13,541,209 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
$ |
5,620,268 |
|
$ |
28,613 |
|
2.04 |
% |
|
$ |
5,771,582 |
|
$ |
21,920 |
|
1.54 |
% |
|
$ |
6,189,722 |
|
$ |
4,458 |
|
0.29 |
% |
|
Savings deposits |
|
1,307,830 |
|
|
537 |
|
0.16 |
% |
|
|
1,398,419 |
|
|
453 |
|
0.13 |
% |
|
|
1,496,064 |
|
|
285 |
|
0.08 |
% |
|
Time deposits |
|
968,344 |
|
|
7,297 |
|
3.02 |
% |
|
|
859,773 |
|
|
5,137 |
|
2.42 |
% |
|
|
695,015 |
|
|
833 |
|
0.48 |
% |
|
Total Deposits |
|
7,896,442 |
|
|
36,447 |
|
1.85 |
% |
|
|
8,029,774 |
|
|
27,510 |
|
1.39 |
% |
|
|
8,380,801 |
|
|
5,576 |
|
0.27 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowed funds |
|
1,658,809 |
|
|
14,088 |
|
3.41 |
% |
|
|
1,224,279 |
|
|
7,476 |
|
2.48 |
% |
|
|
527,630 |
|
|
1,104 |
|
0.84 |
% |
|
Subordinated debentures |
|
10,563 |
|
|
255 |
|
9.66 |
% |
|
|
10,511 |
|
|
246 |
|
9.51 |
% |
|
|
10,355 |
|
|
130 |
|
5.05 |
% |
|
Total interest-bearing liabilities |
|
9,565,814 |
|
|
50,790 |
|
2.13 |
% |
|
|
9,264,564 |
|
|
35,232 |
|
1.54 |
% |
|
|
8,918,786 |
|
|
6,810 |
|
0.31 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-Interest Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
2,368,960 |
|
|
|
|
|
|
2,550,796 |
|
|
|
|
|
|
2,776,507 |
|
|
|
|
|
Other non-interest bearing liabilities |
|
244,604 |
|
|
|
|
|
|
290,978 |
|
|
|
|
|
|
244,671 |
|
|
|
|
|
Total non-interest bearing liabilities |
|
2,613,564 |
|
|
|
|
|
|
2,841,774 |
|
|
|
|
|
|
3,021,178 |
|
|
|
|
|
Total liabilities |
|
12,179,378 |
|
|
|
|
|
|
12,106,338 |
|
|
|
|
|
|
11,939,964 |
|
|
|
|
|
Stockholders' equity |
|
1,653,677 |
|
|
|
|
|
|
1,626,370 |
|
|
|
|
|
|
1,601,245 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
13,833,055 |
|
|
|
|
|
$ |
13,732,708 |
|
|
|
|
|
$ |
13,541,209 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
|
$ |
99,106 |
|
|
|
|
|
$ |
108,324 |
|
|
|
|
|
$ |
99,475 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest rate spread |
|
|
|
|
2.60 |
% |
|
|
|
|
|
3.09 |
% |
|
|
|
|
|
3.12 |
% |
| Net interest-earning
assets |
$ |
3,010,153 |
|
|
|
|
|
$ |
3,153,966 |
|
|
|
|
|
$ |
3,409,956 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest margin (3) |
|
|
|
|
3.11 |
% |
|
|
|
|
|
3.48 |
% |
|
|
|
|
|
3.21 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ratio of interest-earning
assets to total interest-bearing liabilities |
1.31x |
|
|
|
|
|
1.34x |
|
|
|
|
|
1.38x |
|
|
|
|
|
|
|
|
(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. |
|
|
|
| |
6/30/23 |
|
3/31/23 |
|
12/31/22 |
|
9/30/22 |
|
6/30/22 |
| |
2nd Qtr. |
|
1st Qtr. |
|
4th Qtr. |
|
3rd Qtr. |
|
2nd Qtr. |
| Interest-Earning
Assets: |
|
|
|
|
|
|
|
|
|
|
Securities |
2.53 |
% |
|
2.52 |
% |
|
2.32 |
% |
|
2.36 |
% |
|
1.74 |
% |
|
Net loans |
5.24 |
% |
|
5.12 |
% |
|
4.82 |
% |
|
4.38 |
% |
|
3.89 |
% |
|
Total interest-earning assets |
4.73 |
% |
|
4.63 |
% |
|
4.36 |
% |
|
3.90 |
% |
|
3.43 |
% |
| |
|
|
|
|
|
|
|
|
|
| Interest-Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
Total deposits |
1.85 |
% |
|
1.39 |
% |
|
0.90 |
% |
|
0.47 |
% |
|
0.27 |
% |
|
Total borrowings |
3.41 |
% |
|
2.48 |
% |
|
1.74 |
% |
|
1.11 |
% |
|
0.84 |
% |
|
Total interest-bearing liabilities |
2.13 |
% |
|
1.54 |
% |
|
1.00 |
% |
|
0.54 |
% |
|
0.31 |
% |
| |
|
|
|
|
|
|
|
|
|
| Interest rate spread |
2.60 |
% |
|
3.09 |
% |
|
3.36 |
% |
|
3.36 |
% |
|
3.12 |
% |
| Net interest margin |
3.11 |
% |
|
3.48 |
% |
|
3.62 |
% |
|
3.51 |
% |
|
3.21 |
% |
| |
|
|
|
|
|
|
|
|
|
| Ratio of interest-earning
assets to interest-bearing liabilities |
1.31x |
|
1.34x |
|
1.35x |
|
1.37x |
|
1.38x |
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Net Interest Margin Analysis |
|
Average Year to Date Balances |
|
(Dollars in Thousands) (Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
June 30, 2023 |
|
June 30, 2022 |
| |
Average |
|
|
|
Average |
|
Average |
|
|
|
Average |
| |
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
| Interest-Earning
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
$ |
72,750 |
|
$ |
1,791 |
|
4.97 |
% |
|
$ |
175,341 |
|
$ |
298 |
|
0.34 |
% |
|
Federal funds sold and other short term investments |
|
59 |
|
|
2 |
|
6.00 |
% |
|
|
147,447 |
|
|
911 |
|
1.25 |
% |
|
Available for sale debt securities |
|
1,804,814 |
|
|
20,692 |
|
2.29 |
% |
|
|
2,069,270 |
|
|
15,671 |
|
1.51 |
% |
|
Held to maturity debt securities, net (1) |
|
381,921 |
|
|
4,725 |
|
2.47 |
% |
|
|
420,133 |
|
|
5,085 |
|
2.42 |
% |
|
Equity securities, at fair value |
|
999 |
|
|
— |
|
— |
% |
|
|
1,055 |
|
|
— |
|
— |
% |
|
Federal Home Loan Bank stock |
|
70,702 |
|
|
2,170 |
|
6.14 |
% |
|
|
31,296 |
|
|
735 |
|
4.70 |
% |
|
Net loans: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Total mortgage loans |
|
7,671,493 |
|
|
195,290 |
|
5.07 |
% |
|
|
7,156,189 |
|
|
132,908 |
|
3.70 |
% |
|
Total commercial loans |
|
2,191,222 |
|
|
60,109 |
|
5.49 |
% |
|
|
2,105,001 |
|
|
45,184 |
|
4.30 |
% |
|
Total consumer loans |
|
303,724 |
|
|
8,673 |
|
5.76 |
% |
|
|
321,796 |
|
|
6,483 |
|
4.06 |
% |
|
Total net loans |
|
10,166,439 |
|
|
264,072 |
|
5.18 |
% |
|
|
9,582,986 |
|
|
184,575 |
|
3.84 |
% |
|
Total interest-earning assets |
$ |
12,497,684 |
|
$ |
293,452 |
|
4.68 |
% |
|
$ |
12,427,528 |
|
$ |
207,275 |
|
3.33 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-Interest Earning
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
136,431 |
|
|
|
|
|
|
126,423 |
|
|
|
|
|
Other assets |
|
1,149,044 |
|
|
|
|
|
|
1,062,948 |
|
|
|
|
|
Total assets |
$ |
13,783,159 |
|
|
|
|
|
$ |
13,616,899 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Interest-Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
$ |
5,695,507 |
|
$ |
50,533 |
|
1.79 |
% |
|
$ |
6,238,860 |
|
$ |
8,653 |
|
0.28 |
% |
|
Savings deposits |
|
1,352,874 |
|
|
990 |
|
0.15 |
% |
|
|
1,486,407 |
|
|
576 |
|
0.08 |
% |
|
Time deposits |
|
914,358 |
|
|
12,434 |
|
2.74 |
% |
|
|
687,956 |
|
|
1,534 |
|
0.45 |
% |
|
Total deposits |
|
7,962,739 |
|
|
63,957 |
|
1.62 |
% |
|
|
8,413,223 |
|
|
10,763 |
|
0.26 |
% |
|
Borrowed funds |
|
1,442,744 |
|
|
21,564 |
|
3.01 |
% |
|
|
538,593 |
|
|
2,272 |
|
0.85 |
% |
|
Subordinated debentures |
|
10,537 |
|
|
501 |
|
9.58 |
% |
|
|
10,328 |
|
|
239 |
|
4.66 |
% |
|
Total interest-bearing liabilities |
$ |
9,416,020 |
|
$ |
86,022 |
|
1.84 |
% |
|
$ |
8,962,144 |
|
$ |
13,274 |
|
0.30 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-Interest Bearing
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
2,459,375 |
|
|
|
|
|
|
2,781,248 |
|
|
|
|
|
Other non-interest bearing liabilities |
|
267,666 |
|
|
|
|
|
|
229,958 |
|
|
|
|
|
Total non-interest bearing liabilities |
|
2,727,041 |
|
|
|
|
|
|
3,011,206 |
|
|
|
|
|
Total liabilities |
|
12,143,061 |
|
|
|
|
|
|
11,973,350 |
|
|
|
|
|
Stockholders' equity |
|
1,640,099 |
|
|
|
|
|
|
1,643,549 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
13,783,160 |
|
|
|
|
|
$ |
13,616,899 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
|
$ |
207,430 |
|
|
|
|
|
$ |
194,001 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net interest rate spread |
|
|
|
|
2.84 |
% |
|
|
|
|
|
3.03 |
% |
| Net interest-earning
assets |
$ |
3,081,664 |
|
|
|
|
|
$ |
3,465,384 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net interest margin (3) |
|
|
|
|
3.29 |
% |
|
|
|
|
|
3.11 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Ratio of interest-earning
assets to total interest-bearing liabilities |
1.33x |
|
|
|
|
|
1.39x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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, 2023 |
|
June 30, 2022 |
|
June 30, 2021 |
| Interest-Earning
Assets: |
|
|
|
|
|
|
Securities |
2.52 |
% |
|
1.59 |
% |
|
1.57 |
% |
|
Net loans |
5.18 |
% |
|
3.84 |
% |
|
3.79 |
% |
|
Total interest-earning assets |
4.68 |
% |
|
3.33 |
% |
|
3.36 |
% |
| |
|
|
|
|
|
| Interest-Bearing
Liabilities: |
|
|
|
|
|
|
Total deposits |
1.62 |
% |
|
0.26 |
% |
|
0.36 |
% |
|
Total borrowings |
3.01 |
% |
|
0.85 |
% |
|
1.15 |
% |
|
Total interest-bearing liabilities |
1.84 |
% |
|
0.30 |
% |
|
0.46 |
% |
| |
|
|
|
|
|
| Interest rate spread |
2.84 |
% |
|
3.03 |
% |
|
2.90 |
% |
| Net interest margin |
3.29 |
% |
|
3.11 |
% |
|
3.02 |
% |
| |
|
|
|
|
|
| Ratio of interest-earning
assets to interest-bearing liabilities |
1.33x |
|
1.39x |
|
1.35x |
SOURCE: Provident Financial Services, Inc.CONTACT: Investor
Relations, 1-732-590-9300Web
Site: http://www.Provident.Bank
Provident Financial Serv... (NYSE:PFS)
Historical Stock Chart
From Oct 2024 to Nov 2024
Provident Financial Serv... (NYSE:PFS)
Historical Stock Chart
From Nov 2023 to Nov 2024
