Provident Financial Services, Inc. (NYSE:PFS) (the “Company”)
reported net income of $46.4 million, or $0.36 per basic and
diluted share for the three months ended September 30, 2024,
compared to a net loss of $11.5 million, or $0.11 per basic and
diluted share, for the three months ended June 30, 2024 and net
income of $28.5 million, or $0.38 per basic and diluted share, for
the three months ended September 30, 2023. For the nine months
ended September 30, 2024, net income totaled $67.0 million, or
$0.65 per basic and diluted share, compared to $101.1 million, or
$1.35 per basic and diluted share, for the nine months ended
September 30, 2023.
The Company’s earnings for the three and nine
months ended September 30, 2024 reflected the impact of the
May 16, 2024 merger with Lakeland Bancorp, Inc. (“Lakeland”), which
added $10.91 billion to total assets, $7.91 billion to loans, and
$8.62 billion to deposits, net of purchase accounting
adjustments. The merger with Lakeland significantly impacted
provisions for credit losses in the trailing quarter due to the
initial CECL provisions recorded on acquired loans. The
results of operations for the three and nine months ended September
30, 2024 also included other transaction costs related to the
merger with Lakeland, totaling $15.6 million and $36.7 million,
respectively, compared with transaction costs totaling $2.3 million
and $5.3 million for the respective 2023 periods. Additionally, the
Company realized a $2.8 million loss related to the sale of
subordinated debt issued by Lakeland from the Provident investment
portfolio, during the nine months ended September 30, 2024.
Anthony J. Labozzetta, President and Chief
Executive Officer commented, “We achieved solid performance this
quarter, and we are optimistic that our results will continue to
improve as we further realize the synergies of the merger.
Provident generated strong earnings and core metrics, aided by
robust performance in our fee-based businesses. We continue to
expand our operations prudently and believe we are well-positioned
for even greater success as market conditions improve.”
Regarding the Company's merger with Lakeland,
Mr. Labozzetta added, “We are proud to announce that, with the
conversion of our core system in early September, our merger is
complete and we are a unified organization. Our cultures are
combining well and we are already experiencing the benefits of cost
savings and enhanced revenue opportunities. We are grateful to the
many team members whose hard work allowed for a smooth conversion
and the retention of almost all legacy Lakeland customers.”
Performance Highlights for the
Third Quarter of
2024
- Net interest income
increased $42.2 million to $183.7 million for the three months
ended September 30, 2024, from $141.5 million for the trailing
quarter primarily due to the full quarter impact of net assets
acquired from Lakeland, including the accretion of purchase
accounting adjustments and four basis points of core margin
expansion.
- The net interest
margin increased ten basis points to 3.31% for the quarter ended
September 30, 2024, from 3.21% for the trailing quarter. The
weighted average yield on interest-earning assets for the quarter
ended September 30, 2024 increased 17 basis points to 5.84%,
compared to the trailing quarter, while the weighted average cost
of interest-bearing liabilities for the quarter ended
September 30, 2024 increased ten basis points to 3.19%,
compared to the trailing quarter. The increases in the yields and
costs on interest-earning assets and interest-bearing liabilities
were primarily due to a full quarter of accretion of purchase
accounting adjustments related to the Lakeland merger, which
contributed approximately 53 basis points to the net interest
margin in the current quarter.
- Non-interest income
increased $4.6 million to $26.9 million for the three months ended
September 30, 2024, from $22.3 million for the trailing quarter,
while non-interest expense increased $20.6 million to $136.0
million for the three months ended September 30, 2024, compared to
$115.4 million for the trailing quarter. The increases
in both non-interest income and non-interest expense were
reflective of a full quarter of combined operations with
Lakeland.
- Wealth management
and insurance agency income increased 9.0% and 12.6%, respectively,
versus the same period in 2023. The increase in wealth management
income was primarily due to an increase in the average market value
of assets under management during the period, while the increase in
insurance agency income was largely due to an increase in business
activity.
- Adjusting for
transaction costs related to the merger with Lakeland, net of tax,
the Company's annualized adjusted returns on average assets,
average equity and average tangible equity(1) were 0.95%, 8.62% and
14.53% for the quarter ended September 30, 2024, compared to 0.06%,
0.53% and 2.01% for the quarter ended June 30, 2024. A
reconciliation between GAAP and the above non-GAAP ratios are shown
on page 13 of the earnings release.
- The Company's
annualized adjusted pre-tax, pre-provision returns on average
assets, average equity and average tangible equity(2) were 1.48%,
13.48% and 19.77% for the quarter ended September 30, 2024,
compared to 1.47%, 13.26% and 19.21% for the quarter ended
June 30, 2024. A reconciliation between GAAP and the above
non-GAAP ratios are shown on page 14 of the earnings release.
- As of
September 30, 2024, the Company's loan pipeline, consisting of
work-in-process and loans approved pending closing, totaled $1.98
billion, with a weighted average interest rate of 7.18%, compared
to $1.67 billion, with a weighted average interest rate of 7.53%,
as of June 30, 2024.
- The Company
recorded a $9.6 million provision for credit losses on loans for
the quarter ended September 30, 2024, compared to a $66.1
million provision for the trailing quarter. The provision for
credit losses on loans in the quarter was primarily attributable to
specific reserves required on individually analyzed loans, combined
with some economic forecast deterioration. The allowance for credit
losses as a percentage of loans increased to 1.02% as of
September 30, 2024, from 1.00% as of June 30, 2024.
- As of
September 30, 2024, CRE loans related to office properties
totaled $921.1 million, compared to $953.5 million as of
June 30, 2024. CRE loans secured by office properties
constitutes only 4.9% of total loans and have an average loan size
of $1.9 million, with just seven relationships greater than $10.0
million. There were four loans totaling $9.2 million on non-accrual
as of September 30, 2024, however we do not expect to incur
losses on any of these loans.
- As of
September 30, 2024, multi-family CRE loans secured by New York
City properties totaled $226.6 million, compared to $227.7 million
as of June 30, 2024. This portfolio constitutes only 1.2% of
total loans and has an average loan size of $2.6 million. Loans
that are collateralized by rent stabilized apartments comprise less
than 0.80% of the total loan portfolio and are all performing.
- Non-performing
loans to total loans as of September 30, 2024 increased to
0.47%, compared to 0.36% as of June 30, 2024, while
non-performing assets to total assets as of September 30, 2024
increased to 0.41%, compared to 0.33% as of June 30, 2024. The
increase in non-performing loans, compared to the prior quarter was
primarily attributable to one commercial real estate credit secured
by an industrial property which has a loan-to-value ratio of
approximately 39%. We anticipate a near-term resolution of this
credit with no expected loss. For the three months
ended September 30, 2024, net charge-offs totaled $6.8 million, or
an annualized 14 basis points of average loans. Of this total, $6.4
million was attributable to one previously identified commercial
relationship that had a $4.4 million specific reserve as of
June 30, 2024. This credit is expected to be fully resolved in
the fourth quarter of 2024.
Declaration of Quarterly
Dividend
The Company’s Board of Directors declared a
quarterly cash dividend of $0.24 per common share payable on
November 29, 2024 to stockholders of record as of the close of
business on November 15, 2024.
Results of Operations
Three months ended September 30, 2024
compared to the three months ended June 30, 2024
For the three months ended September 30, 2024,
the Company reported net income of $46.4 million, or $0.36 per
basic and diluted share, compared to a net loss of $11.5 million,
or $0.11 per basic and diluted share, for the three months ended
June 30, 2024. The Company’s earnings for the prior quarter were
impacted by an initial CECL provision for credit losses on loans
and commitments to extend credit of $65.2 million recorded as part
of the Lakeland merger in accordance with GAAP requirements for
accounting for business combinations. The results of operations for
the three months ended September 30, 2024 included transaction
costs related to the merger with Lakeland totaling $15.6 million,
compared with transaction costs totaling $18.9 million in the
trailing quarter. Additionally, the Company realized a $2.8 million
loss in the trailing quarter related to the sale from the Provident
investment portfolio of subordinated debt issued by Lakeland.
Net Interest Income and Net Interest
Margin
Net interest income increased $42.2 million to
$183.7 million for the three months ended September 30, 2024, from
$141.5 million for the trailing quarter. Net interest income for
the three months ended September 30, 2024 was favorably impacted by
a full quarter of combined operations with Lakeland and accretion
of purchase accounting adjustments, compared to a 45 days impact in
the prior quarter.
The Company’s net interest margin increased ten
basis points to 3.31% for the quarter ended September 30,
2024, from 3.21% for the trailing quarter. Accretion of purchase
accounting adjustments related to the Lakeland merger contributed
53 basis points to the net interest margin in the current quarter.
The current net interest margin reflects a full quarter of the
acquisition of Lakeland’s interest-bearing assets and liabilities,
the prior quarter sale of $554.2 million of securities acquired
from Lakeland and the repayment of overnight borrowings as well as
the prior quarter issuance of subordinated debt.
The weighted average yield on interest-earning
assets for the quarter ended September 30, 2024 increased 17
basis points to 5.84%, compared to the trailing quarter. The
weighted average cost of interest-bearing liabilities for the
quarter ended September 30, 2024 increased ten basis points
from the trailing quarter, to 3.19%. The average cost of
interest-bearing deposits for the quarter ended September 30,
2024 increased 12 basis points to 2.96%, compared to 2.84% for the
trailing quarter. The average cost of total deposits, including
non-interest-bearing deposits, was 2.36% for the quarter ended
September 30, 2024, compared to 2.27% for the trailing
quarter. The average cost of borrowed funds for the quarter ended
September 30, 2024 was 3.73%, compared to 3.83% for the
quarter ended June 30, 2024. All yields and costs reflect a
full quarter of combined operations with Lakeland.
Provision for Credit Losses on
Loans
For the quarter ended September 30, 2024,
the Company recorded a $9.6 million provision for credit losses on
loans, compared with a provision for credit losses on loans of
$66.1 million for the quarter ended June 30, 2024. The
provision for credit losses on loans in the quarter was primarily
attributable to specific reserves required on individually analyzed
loans, combined with some economic forecast deterioration, while
the provision for credit losses on loans in the prior quarter was
primarily attributable to an initial CECL provision for credit
losses of $60.1 million, recorded as part of the Lakeland merger in
accordance with GAAP requirements for accounting for business
combinations. For the three months ended September 30, 2024, net
charge-offs totaled $6.8 million, or an annualized 14 basis points
of average loans.
Non-Interest Income and
Expense
For the three months ended September 30, 2024,
non-interest income totaled $26.9 million, an increase of $4.6
million, compared to the trailing quarter. Net gain on securities
transactions increased $3.0 million for the three months ended
September 30, 2024, compared to the trailing quarter, primarily due
to a $2.8 million loss realized on the sale from the Provident
investment portfolio of subordinated debt issued by Lakeland in the
prior quarter. Fee income increased $1.1 million to
$9.8 million for the three months ended September 30, 2024,
compared to the trailing quarter, primarily due to increases in
deposit and debit card related fee income. The increases in fee
income are primarily attributable to the addition of the Lakeland
customer base. BOLI income increased $1.0 million for the three
months ended September 30, 2024, compared to the trailing quarter,
primarily due to an increase in benefit claims recognized.
Partially offsetting these increases in non-interest income,
insurance agency income decreased $857,000 to $3.6 million for the
three months ended September 30, 2024, compared to the trailing
quarter, due to a seasonal decrease in business activity in the
current quarter, while wealth management income decreased $149,000
to $7.6 million for the three months ended September 30, 2024,
compared to the trailing quarter, mainly due to a seasonal decrease
in tax preparation fees, partially offset by an increase in the
average market value of assets under management during the
period.
Non-interest expense totaled $136.0 million for
the three months ended September 30, 2024, an increase of $20.6
million, compared to $115.4 million for the trailing quarter.
Compensation and benefits expense increased $8.6 million to $63.5
million for the three months ended September 30, 2024, compared to
$54.9 million for the trailing quarter. The increase in
compensation and benefits expense was primarily attributable to a
full quarter of combined operations with Lakeland, compared to 45
days in the prior quarter. Amortization of intangibles
increased $5.7 million to $12.2 million for the three months ended
September 30, 2024, compared to $6.5 million for the trailing
quarter, largely due to a full quarter of core deposit intangible
amortization related to Lakeland. Other operating
expenses increased $4.5 million to $15.8 million for the three
months ended September 30, 2024, compared to $11.3 million for the
trailing quarter, primarily due to increases in professional
service expenses. Data processing expense increased $2.0 million to
$10.5 million for the three months ended September 30, 2024,
compared to $8.4 million for the trailing quarter, primarily due a
full quarter of combined operations with Lakeland, while net
occupancy expense increased $1.6 million to $12.8 million for the
three months ended September 30, 2024, compared to $11.1 million
for the trailing quarter, primarily due to increases in maintenance
and depreciation expenses from the addition of
Lakeland. Additionally, FDIC insurance increased $1.1
million to $4.2 million for the three months ended September 30,
2024, primarily resulting from the impact of the Lakeland merger.
Partially offsetting these increases, merger-related expenses
decreased $3.3 million to $15.6 million for the three months ended
September 30, 2024, compared to the trailing quarter.
The Company’s annualized adjusted non-interest
expense as a percentage of average assets(5) declined to 1.98% for
the quarter ended September 30, 2024, compared to 2.02% for
the trailing quarter. The efficiency ratio (adjusted non-interest
expense divided by the sum of net interest income and non-interest
income)(6) improved to 57.20% for the three months ended
September 30, 2024, compared to 57.86% for the trailing
quarter.
Income Tax Expense/Benefit
For the three months ended September 30,
2024, the Company's income tax expense was $18.9 million, compared
to an income tax benefit of $9.8 million for the trailing quarter.
The increase in tax expense for the three months ended
September 30, 2024 compared with the trailing quarter was
largely due to an increase in taxable income in the current quarter
as a result of the Lakeland merger and a $5.3 million tax benefit
realized in the trailing quarter related to the revaluation of
deferred tax assets to reflect the imposition by the State of New
Jersey of a 2.5% Corporate Transit Fee, effective January 1,
2024.
Three months ended September 30, 2024
compared to the three months ended September 30, 2023
For the three months ended September 30, 2024,
the Company reported net income of $46.4 million, or $0.36 per
basic and diluted share, compared to net income of $28.5 million,
or $0.38 per basic and diluted share, for the three months ended
September 30, 2023. The Company’s earnings for the quarter ended
September 30, 2024 reflected the impact of the May 16, 2024
merger with Lakeland. The results of operations included
transaction costs related to the merger with Lakeland totaling
$15.6 million and $2.3 million for the three months ended September
30, 2024 and 2023, respectively.
Net Interest Income and Net Interest
Margin
Net interest income increased $87.5 million to
$183.7 million for the three months ended September 30, 2024, from
$96.2 million for same period in 2023. Net interest income for the
three months ended September 30, 2024 was favorably impacted by the
net assets acquired from Lakeland, combined with favorable
repricing of adjustable rate loans, higher market rates on new loan
originations and the originations of higher-yielding loans,
partially offset by unfavorable repricing of both deposits and
borrowings.
The Company’s net interest margin increased 35
basis points to 3.31% for the quarter ended September 30,
2024, from 2.96% for the same period last year. Accretion of
purchase accounting adjustments related to the Lakeland merger
contributed 53 basis points to the net interest margin in the
current quarter. The current quarter net interest
margin reflects the acquisition of Lakeland’s interest bearing
assets and liabilities, the prior quarter sale of $554.2 million of
securities acquired from Lakeland and the repayment of overnight
borrowings as well as the prior quarter issuance of subordinated
debt.
The weighted average yield on interest-earning
assets for the quarter ended September 30, 2024 increased 95
basis points to 5.84%, compared to 4.89% for the quarter ended
September 30, 2023. The weighted average cost of
interest-bearing liabilities increased 69 basis points for the
quarter ended September 30, 2024 to 3.19%, compared to 2.50%
for the third quarter of 2023. The average cost of interest-bearing
deposits for the quarter ended September 30, 2024 was 2.96%,
compared to 2.22% for the same period last year. Average
non-interest-bearing demand deposits increased $1.51 billion to
$3.74 billion for the quarter ended September 30, 2024,
compared to $2.23 billion for the quarter ended September 30,
2023. The average cost of total deposits, including
non-interest-bearing deposits, was 2.36% for the quarter ended
September 30, 2024, compared with 1.74% for the quarter ended
September 30, 2023. The average cost of borrowed funds for the
quarter ended September 30, 2024 was 3.73%, compared to 3.74%
for the same period last year.
Provision for Credit Losses on
Loans
For the quarter ended September 30, 2024,
the Company recorded a $9.6 million provision for credit losses on
loans, compared with an $11.0 million provision for credit losses
on loans for the quarter ended September 30, 2023.
The provision for credit losses on loans in the current quarter was
primarily attributable to specific reserves required on
individually analyzed loans, combined with some economic forecast
deterioration. For the three months ended September 30,
2024, net charge-offs totaled $6.8 million, or an annualized 14
basis points of average loans.
Non-Interest Income and
Expense
Non-interest income totaled $26.9 million for
the quarter ended September 30, 2024, an increase of $7.5
million, compared to the same period in 2023. Fee income increased
$3.7 million to $9.8 million for the three months ended September
30, 2024, compared to the prior year quarter, primarily due to
increases in deposit fee income, debit card related fee income and
loan related fee income, resulting from the Lakeland
merger. BOLI income increased $2.5 million to $4.3
million for the three months ended September 30, 2024, compared to
the prior year quarter, primarily due to an increase in benefit
claims recognized, combined with an increase in income related to
the addition of Lakeland's BOLI. Wealth management fees increased
$628,000 to $7.6 million for the three months ended September 30,
2024, compared to the quarter ended September 30, 2023, mainly
due to an increase in the average market value of assets under
management during the period, while insurance agency income
increased $407,000 to $3.6 million for the three months ended
September 30, 2024, compared to the quarter ended
September 30, 2023, largely due to an increase in business
activity. Additionally, other income increased $339,000 to $1.5
million for the three months ended September 30, 2024, compared to
the quarter ended September 30, 2023, primarily due to
increases in gains on the sale of SBA and mortgage loans.
For the three months ended September 30, 2024,
non-interest expense totaled $136.0 million, an increase of $70.4
million, compared to the three months ended September 30, 2023.
Compensation and benefits expense increased $27.8 million to $63.5
million for the three months ended September 30, 2024, compared to
$35.7 million for the same period in 2023. The increase in
compensation and benefits expense was primarily attributable to the
addition of Lakeland. Additionally, merger-related expenses
increased $13.3 million to $15.6 million for the three months ended
September 30, 2024, compared to the same period in 2023.
Amortization of intangibles increased $11.5 million to $12.2
million for the three months ended September 30, 2024, compared to
$720,000 for the same period in 2023, largely due to core deposit
intangible amortization related to Lakeland in the current quarter.
Data processing expenses increased $5.2 million to $10.5 million
for three months ended September 30, 2024, compared to $5.3 million
for the same period in 2023, primarily due to additional software
and hardware expenses needed for the addition of Lakeland. Net
occupancy expense increased $4.7 million to $12.8 million for three
months ended September 30, 2024, compared to $8.1 million for the
same period in 2023, primarily due to an increase in depreciation
and maintenance expenses due to the addition of
Lakeland. Other operating expenses increased $5.0
million to $15.8 million for the three months ended September 30,
2024, compared to $10.7 million for the same period in 2023,
primarily due to increases in professional service expenses, while
FDIC insurance increased $2.6 million to $4.2 million for the three
months ended September 30, 2024, primarily due to the addition of
Lakeland.
The Company’s annualized adjusted non-interest
expense as a percentage of average assets(5) was 1.98% for the
quarter ended September 30, 2024, compared to 1.80% for the
same period in 2023. The efficiency ratio (adjusted non-interest
expense divided by the sum of net interest income and non-interest
income)(6) was 57.20% for the three months ended September 30, 2024
compared to 54.81% for the same respective period in 2023.
Income Tax Expense
For the three months ended September 30, 2024,
the Company's income tax expense was $18.9 million with an
effective tax rate of 28.9%, compared with an income tax expense of
$8.8 million with an effective tax rate of 23.7% for the three
months ended September 30, 2023. The increase in tax expense for
the three months ended September 30, 2024, compared with the same
period last year was largely due to an increase in taxable income
in the quarter, as a result of the Lakeland merger and the
imposition by the State of New Jersey of a 2.5% Corporate Transit
Fee in the prior quarter.
Nine months ended September 30, 2024
compared to the nine months ended September 30, 2023
For the nine months ended September 30, 2024,
net income totaled $67.0 million, or $0.65 per basic and diluted
share, compared to net income of $101.1 million, or $1.35 per basic
and diluted share, for the nine months ended September 30, 2023.
The Company’s earnings for the nine months ended September 30, 2024
were impacted by an initial CECL provision for credit losses on
loans and commitments to extend credit of $60.1 million recorded as
part of the Lakeland merger in accordance with GAAP requirements
for accounting for business combinations. Transaction costs related
to our merger with Lakeland totaled $36.7 million and $5.3 million
for the nine months ended September 30, 2024 and 2023,
respectively. Additionally, the Company realized a $2.8 million
loss related to the sale from the Provident investment portfolio of
subordinated debt issued by Lakeland, during the nine months ended
September 30, 2024.
Net Interest Income and Net Interest
Margin
Net interest income increased $115.2 million to
$418.9 million for the nine months ended September 30, 2024, from
$303.7 million for same period in 2023. Net interest income for the
nine months ended September 30, 2024 was favorably impacted by the
net assets acquired from Lakeland, combined with 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.
For the nine months ended September 30, 2024,
our net interest margin decreased one basis point to 3.18%,
compared to 3.19% for the nine months ended September 30, 2023. The
weighted average yield on interest earning assets increased 85
basis points to 5.61% for the nine months ended September 30, 2024,
compared to 4.76% for the nine months ended September 30, 2023,
while the weighted average cost of interest-bearing liabilities
increased 99 basis points to 3.06% for the nine months ended
September 30, 2024, compared to 2.07% for the same period last
year. The average cost of interest-bearing deposits increased 102
basis points to 2.84% for the nine months ended September 30, 2024,
compared to 1.82% for the same period last year. Average
non-interest-bearing demand deposits increased $514.3 million to
$2.90 billion for the nine months ended September 30, 2024,
compared with $2.38 billion for the nine months ended September 30,
2023. The average cost of total deposits, including
non-interest-bearing deposits, was 2.27% for the nine months ended
September 30, 2024, compared with 1.40% for the nine months ended
September 30, 2023. The average cost of borrowings for the nine
months ended September 30, 2024 was 3.73%, compared to 3.29% for
the same period last year.
Provision for Credit Losses on
Loans
For the nine months ended September 30, 2024,
the Company recorded a $75.9 million provision for credit losses on
loans, compared with a provision for credit losses on loans of
$27.4 million for the nine months ended September 30, 2023. The
increased provision for credit losses on loans for the nine months
ended September 30, 2024 was primarily attributable to an initial
CECL provision for credit losses on loans of $60.1 million recorded
as part of the Lakeland merger in accordance with GAAP requirements
for accounting for business combinations, partially offset by an
improved economic forecast for the current nine-month period within
our CECL model, compared to the same period last year. For the nine
months ended September 30, 2024, net charge-offs totaled $9.1
million or an annualized eight basis points of average loans.
Non-Interest Income and
Expense
For the nine months ended September 30, 2024,
non-interest income totaled $69.9 million, an increase of $9.1
million compared to the same period in 2023. Fee income increased
$6.1 million to $24.4 million for the nine months ended September
30, 2024, compared to the same period in 2023, primarily due to
increases in deposit fee income, debit and credit card related fee
income and loan related fee income resulting from the Lakeland
merger. BOLI income increased $4.6 million to $9.4 million for the
nine months ended September 30, 2024, compared to the same period
in 2023, primarily due to an increase in benefit claims recognized,
combined with an increase in income related to the addition of
Lakeland's BOLI, while wealth management income increased $2.1
million to $22.9 million for the nine months ended September 30,
2024, compared to the same period in 2023, mainly due to an
increase in the average market value of assets under management
during the period. Additionally, insurance agency income increased
$1.7 million to $12.9 million for the nine months ended September
30, 2024, compared to $11.2 million for the same period in 2023,
largely due to increases in contingent commissions, retention
revenue and new business activity. Partially offsetting these
increases in non-interest income, net gains on securities
transactions decreased $3.0 million for the nine months ended
September 30, 2024, primarily due to a $2.8 million loss related to
the sale from the Provident investment portfolio of subordinated
debt issued by Lakeland. Other income decreased $2.4 million to
$3.2 million for the nine months ended September 30, 2024, compared
to $5.7 million for the same period in 2023, primarily due to a
$2.0 million gain from the sale of a foreclosed commercial property
recorded in the prior year, combined with a decrease in gains on
sales of SBA loans.
Non-interest expense totaled $323.2 million for
the nine months ended September 30, 2024, an increase of $123.7
million, compared to $199.5 million for the nine months ended
September 30, 2023. Compensation and benefits expense increased
$48.7 million to $158.4 million for the nine months ended September
30, 2024, compared to $109.7 million for the nine months ended
September 30, 2023. The increase in compensation and benefits
expense was primarily attributable to the addition of
Lakeland. Merger-related expenses increased $31.3
million to $36.7 million for the nine months ended September 30,
2024, compared to $5.3 million for the nine months ended September
30, 2023. Amortization of intangibles increased $17.2 million to
$19.4 million for the nine months ended September 30, 2024,
compared to $2.2 million for the nine months ended September 30,
2023, largely due to core deposit intangible amortization related
to Lakeland. Data processing expense increased $9.2 million to
$25.7 million for the nine months ended September 30, 2024,
compared to $16.5 million for the nine months ended September 30,
2023, primarily due to additional software and hardware expenses
needed for the addition of Lakeland, while net occupancy expense
increased $8.0 million to $32.5 million for the nine months ended
September 30, 2024, compared to the same period in 2023, primarily
due to increases in depreciation and maintenance expense related to
the addition of Lakeland. Other operating expenses increased $5.6
million to $37.4 million for the three months ended September 30,
2024, compared to $31.8 million for the same period in 2023,
primarily due to increases in professional service expenses, while
FDIC insurance increased $3.9 million to $9.6 million for the three
months ended September 30, 2024, primarily due to the addition of
Lakeland.
Income Tax ExpenseFor the nine
months ended September 30, 2024, the Company's income tax expense
was $19.9 million with an effective tax rate of 22.9%, compared
with $34.9 million with an effective tax rate of 25.7% for the nine
months ended September 30, 2023. The decrease in tax expense for
the nine months ended September 30, 2024 compared with the same
period last year was largely due to a $5.8 million tax benefit
related to the revaluation of deferred tax assets to reflect the
imposition by the State of New Jersey of a 2.5% Corporate Transit
Fee, effective January 1, 2024, combined with a decrease in taxable
income as a result of the initial CECL provision for credit losses
on loans of $60.1 million recorded in accordance with GAAP
requirements for accounting for business combinations and
additional expenses from the Lakeland merger.
Asset Quality
The Company’s total non-performing loans as of
September 30, 2024 were $89.9 million, or 0.47% of total
loans, compared to $67.9 million, or 0.36% of total loans as of
June 30, 2024 and $49.6 million, or 0.46% of total loans as of
December 31, 2023. The $22.1 million increase in
non-performing loans as of September 30, 2024, compared to the
trailing quarter, consisted of a $10.4 million increase in
non-performing commercial mortgage loans, an $8.9 million increase
in non-performing commercial loans, a $1.5 million increase in
non-performing construction loans, a $764,000 increase in
non-performing residential mortgage loans, a $302,000 increase in
non-performing multi-family loans and a $289,000 increase in
non-performing consumer loans. As of September 30, 2024,
impaired loans totaled $74.0 million with related specific reserves
of $7.2 million, compared with impaired loans totaling $54.6
million with related specific reserves of $7.7 million as of
June 30, 2024. As of December 31, 2023, impaired loans
totaled $42.8 million with related specific reserves of $2.4
million.
As of September 30, 2024, the Company’s
allowance for credit losses related to the loan portfolio was 1.02%
of total loans, compared to 1.00% and 0.99% as of June 30,
2024 and December 31, 2023, respectively. The allowance for
credit losses increased $84.0 million to $191.2 million as of
September 30, 2024, from $107.2 million as of
December 31, 2023. The increase in the allowance for credit
losses on loans as of September 30, 2024 compared to
December 31, 2023 was due to a $75.9 million provision for
credit losses, which included an initial CECL provision of $60.1
million on loans acquired from Lakeland, and a $17.2 million
allowance recorded through goodwill related to Purchased Credit
Deteriorated loans acquired from Lakeland, partially offset by net
charge-offs of $9.1 million.
The following table sets forth accruing past due
loans and non-accrual loans on the dates indicated, as well as
delinquency statistics and certain asset quality ratios.
|
|
|
September 30, 2024 |
|
June 30, 2024 |
|
December 31, 2023 |
|
|
|
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 |
|
$ |
430 |
|
|
3 |
|
$ |
1,707 |
|
|
1 |
|
$ |
825 |
|
|
Multi-family mortgage loans |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
3,815 |
|
|
Construction loans |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Residential mortgage loans |
|
23 |
|
|
5,020 |
|
|
9 |
|
|
1,714 |
|
|
13 |
|
|
3,429 |
|
|
Total mortgage loans |
|
25 |
|
|
5,450 |
|
|
12 |
|
|
3,421 |
|
|
15 |
|
|
8,069 |
|
|
Commercial loans |
|
14 |
|
|
1,952 |
|
|
20 |
|
|
3,444 |
|
|
6 |
|
|
998 |
|
|
Consumer loans |
|
53 |
|
|
4,073 |
|
|
38 |
|
|
2,891 |
|
|
31 |
|
|
875 |
|
|
Total 30 to 59 days past due |
|
92 |
|
$ |
11,475 |
|
|
70 |
|
$ |
9,756 |
|
|
52 |
|
$ |
9,942 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
60 to 89 days past due: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage loans |
|
1 |
|
$ |
641 |
|
|
3 |
|
$ |
1,231 |
|
|
— |
|
$ |
— |
|
|
Multi-family mortgage loans |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
1,635 |
|
|
Construction loans |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Residential mortgage loans |
|
11 |
|
|
1,991 |
|
|
10 |
|
|
2,193 |
|
|
8 |
|
|
1,208 |
|
|
Total mortgage loans |
|
12 |
|
|
2,632 |
|
|
13 |
|
|
3,424 |
|
|
9 |
|
|
2,843 |
|
|
Commercial loans |
|
9 |
|
|
1,240 |
|
|
6 |
|
|
1,146 |
|
|
3 |
|
|
198 |
|
|
Consumer loans |
|
10 |
|
|
606 |
|
|
9 |
|
|
648 |
|
|
5 |
|
|
275 |
|
|
Total 60 to 89 days past due |
|
31 |
|
|
4,478 |
|
|
28 |
|
|
5,218 |
|
|
17 |
|
|
3,316 |
|
|
Total accruing past due loans |
|
123 |
|
$ |
15,953 |
|
|
98 |
|
$ |
14,974 |
|
|
69 |
|
$ |
13,258 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage loans |
|
17 |
|
$ |
13,969 |
|
|
10 |
|
$ |
3,588 |
|
|
7 |
|
$ |
5,151 |
|
|
Multi-family mortgage loans |
|
6 |
|
|
7,578 |
|
|
5 |
|
|
7,276 |
|
|
1 |
|
|
744 |
|
|
Construction loans |
|
2 |
|
|
13,151 |
|
|
1 |
|
|
11,698 |
|
|
1 |
|
|
771 |
|
|
Residential mortgage loans |
|
24 |
|
|
5,211 |
|
|
20 |
|
|
4,447 |
|
|
7 |
|
|
853 |
|
|
Total mortgage loans |
|
49 |
|
|
39,909 |
|
|
36 |
|
|
27,009 |
|
|
16 |
|
|
7,519 |
|
|
Commercial loans |
|
69 |
|
|
48,592 |
|
|
58 |
|
|
39,715 |
|
|
26 |
|
|
41,487 |
|
|
Consumer loans |
|
32 |
|
|
1,433 |
|
|
24 |
|
|
1,144 |
|
|
10 |
|
|
633 |
|
|
Total non-accrual loans |
|
150 |
|
$ |
89,934 |
|
|
118 |
|
$ |
67,868 |
|
|
52 |
|
$ |
49,639 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans to total loans |
|
|
|
|
0.47 |
% |
|
|
|
|
0.36 |
% |
|
|
|
|
0.46 |
% |
|
Allowance for loan losses to total non-performing loans |
|
|
|
|
217.09 |
% |
|
|
|
|
277.50 |
% |
|
|
|
|
215.96 |
% |
|
Allowance for loan losses to total loans |
|
|
|
|
1.02 |
% |
|
|
|
|
1.00 |
% |
|
|
|
|
0.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2024 and
December 31, 2023, the Company held foreclosed assets of $9.8
million and $11.7 million, respectively. During the nine months
ended September 30, 2024, there were three properties sold with an
aggregate carrying value of $532,000 and one write-down of a
foreclosed commercial property of $1.3 million. Foreclosed assets
as of September 30, 2024 consisted primarily of commercial
real estate. Total non-performing assets as of September 30,
2024 increased $36.6 million to $97.9 million, or 0.41% of total
assets, from $61.3 million, or 0.43% of total assets as of
December 31, 2023.
Balance Sheet Summary
Total assets as of September 30, 2024 were
$24.04 billion, a $9.83 billion increase from December 31,
2023. The increase in total assets was primarily due to the
addition of Lakeland.
The Company’s loans held for investment
portfolio totaled $18.79 billion as of September 30, 2024 and
$10.87 billion as of December 31, 2023. The loan portfolio
consisted of the following:
| |
September 30, 2024 |
|
June 30, 2024 |
|
December 31, 2023 |
| |
(Dollars in thousands) |
|
Mortgage loans: |
|
|
|
|
|
|
Commercial |
$ |
7,342,456 |
|
|
$ |
7,337,742 |
|
|
$ |
4,512,411 |
|
|
Multi-family |
|
3,226,918 |
|
|
|
3,189,808 |
|
|
|
1,812,500 |
|
|
Construction |
|
873,509 |
|
|
|
970,244 |
|
|
|
653,246 |
|
|
Residential |
|
2,032,671 |
|
|
|
2,024,027 |
|
|
|
1,164,956 |
|
|
Total mortgage loans |
|
13,475,554 |
|
|
|
13,521,821 |
|
|
|
8,143,113 |
|
|
Commercial loans |
|
4,710,601 |
|
|
|
4,617,232 |
|
|
|
2,440,621 |
|
|
Consumer loans |
|
623,709 |
|
|
|
626,016 |
|
|
|
299,164 |
|
|
Total gross loans |
|
18,809,864 |
|
|
|
18,765,069 |
|
|
|
10,882,898 |
|
|
Premiums on purchased loans |
|
1,362 |
|
|
|
1,410 |
|
|
|
1,474 |
|
|
Net deferred fees and unearned discounts |
|
(16,617 |
) |
|
|
(7,149 |
) |
|
|
(12,456 |
) |
|
Total loans |
$ |
18,794,609 |
|
|
$ |
18,759,330 |
|
|
$ |
10,871,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As part of the merger with Lakeland, we acquired
$7.91 billion in loans, net of purchase accounting
adjustments. Compared to the prior quarter, during the
three months ended September 30, 2024, the loan portfolio had
net increases of $93.4 million of commercial loans, $37.1 million
of multi-family loans, $8.6 million of residential mortgage loans,
and $4.7 million of commercial mortgage loans, partially offset by
net decreases of $96.7 million of construction loans and $2.3
million of consumer loans. Commercial loans, consisting
of commercial real estate, multi-family, commercial and
construction loans, represented 85.9% of the loan portfolio as of
September 30, 2024, compared to 86.5% as of December 31,
2023.
For the nine months ended September 30, 2024,
loan funding, including advances on lines of credit, totaled $2.78
billion, compared with $2.53 billion for the same period in
2023.
As of September 30, 2024, the Company’s
unfunded loan commitments totaled $2.97 billion, including
commitments of $1.84 billion in commercial loans, $231.0 million in
construction loans and $225.7 million in commercial mortgage loans.
Unfunded loan commitments as of December 31, 2023 and
September 30, 2023 were $2.09 billion and $2.18 billion,
respectively.
The loan pipeline, consisting of work-in-process
and loans approved pending closing, totaled $1.98 billion as of
September 30, 2024, compared to $1.09 billion and $1.70
billion as of December 31, 2023 and September 30, 2023,
respectively.
Total investment securities were $3.17 billion
as of September 30, 2024, a $1.04 billion increase from
December 31, 2023. This increase was primarily due to the
addition of Lakeland.
Total deposits increased $8.08 billion during
the nine months ended September 30, 2024, to $18.38 billion, due
primarily to the addition of Lakeland. Total savings and demand
deposit accounts increased $6.02 billion to $15.22 billion as of
September 30, 2024, while total time deposits increased $2.06
billion to $3.16 billion as of September 30, 2024. The
increase in savings and demand deposits was largely attributable to
a $2.92 billion increase in interest bearing demand deposits, a
$1.58 billion increase in non-interest bearing demand deposits, a
$1.03 billion increase in money market deposits and a $495.5
million increase in savings deposits. The increase in time deposits
consisted of a $2.01 billion increase in retail time deposits and a
$46.5 million increase in brokered time deposits.
Borrowed funds increased $244.5 million during
the nine months ended September 30, 2024, to $2.21 billion. The
increase in deposits and borrowings was largely due to the addition
of Lakeland. Borrowed funds represented 9.2% of total assets as of
September 30, 2024, a decrease from 13.9% as of
December 31, 2023.
Stockholders’ equity increased $930.5 million
during the nine months ended September 30, 2024, to $2.62 billion,
primarily due to common stock issued for the purchase of Lakeland,
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 three and nine months
ended September 30, 2024, common stock repurchases totaled 1,969
shares at an average cost of $16.36 per share and 88,821 shares at
an average cost of $14.87 per share, respectively, all of which
were made in connection with withholding to cover income taxes on
the vesting of stock-based compensation. As of September 30,
2024, approximately 1.0 million shares remained eligible for
repurchase under the current stock repurchase authorization. Book
value per share and tangible book value per share(1) as of
September 30, 2024 were $20.09 and $13.66, respectively,
compared with $22.38 and $16.32, respectively, as of
December 31, 2023.
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 New Jersey, Bucks,
Lehigh and Northampton counties in Pennsylvania, as well as Orange,
Queens and Nassau Counties in New York. Provident 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 Wednesday, October 30, 2024 at
10:00 a.m. Eastern Time to discuss the Company’s financial results
for the quarter ended September 30, 2024. 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 Current Reports on Form 8-K, and
those related to the economic environment, particularly in the
market areas in which the Company operates, inflation and
unemployment, competitive products and pricing, real estate values,
fiscal and monetary policies of the U.S. Government, the effects of
any turmoil or negative news in the banking industry, 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, potential goodwill impairment,
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, any failure to realize the anticipated
benefits of the merger transaction when expected or at all; the
possibility that the transaction may be more expensive to complete
than anticipated, including as a result of unexpected conditions,
factors or events, potential adverse reactions or changes to
business, employee, customer and/or counterparty relationships,
including those resulting from the completion of the merger and
integration of the companies; and the impact of a potential
shutdown of the federal government.
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 return
on average assets, average equity and average tangible equity,
annualized adjusted pre-tax pre-provision return on average assets,
average equity and 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 Nine Months
Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Statement of Income |
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
183,701 |
|
|
$ |
141,506 |
|
|
$ |
96,236 |
|
|
$ |
418,877 |
|
|
$ |
303,666 |
|
|
Provision for credit losses |
|
9,299 |
|
|
|
69,705 |
|
|
|
12,541 |
|
|
|
78,684 |
|
|
|
29,031 |
|
|
Non-interest income |
|
26,855 |
|
|
|
22,275 |
|
|
|
19,320 |
|
|
|
69,937 |
|
|
|
60,861 |
|
|
Non-interest expense |
|
136,002 |
|
|
|
115,394 |
|
|
|
65,625 |
|
|
|
323,224 |
|
|
|
199,485 |
|
|
Income (loss) before income tax expense |
|
65,255 |
|
|
|
(21,318 |
) |
|
|
37,390 |
|
|
|
86,906 |
|
|
|
136,011 |
|
|
Net income (loss) |
|
46,405 |
|
|
|
(11,485 |
) |
|
|
28,547 |
|
|
|
67,001 |
|
|
|
101,086 |
|
|
Diluted earnings per share |
$ |
0.36 |
|
|
$ |
(0.11 |
) |
|
$ |
0.38 |
|
|
$ |
0.65 |
|
|
$ |
1.35 |
|
|
Interest rate spread |
|
2.65 |
% |
|
|
2.58 |
% |
|
|
2.39 |
% |
|
|
2.55 |
% |
|
|
2.69 |
% |
|
Net interest margin |
|
3.31 |
% |
|
|
3.21 |
% |
|
|
2.96 |
% |
|
|
3.18 |
% |
|
|
3.19 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Profitability |
|
|
|
|
|
|
|
|
|
|
Annualized return on average assets |
|
0.76 |
% |
|
(0.24 |
)% |
|
|
0.81 |
% |
|
|
0.47 |
% |
|
|
0.98 |
% |
|
Annualized adjusted return on average assets (1) |
|
0.95 |
% |
|
0.06 |
% |
|
|
0.86 |
% |
|
|
0.66 |
% |
|
|
1.02 |
% |
|
Annualized return on average equity |
|
6.94 |
% |
|
(2.17 |
)% |
|
|
6.84 |
% |
|
|
4.14 |
% |
|
|
8.22 |
% |
|
Annualized adjusted return on average equity (1) |
|
8.62 |
% |
|
0.53 |
% |
|
|
7.30 |
% |
|
|
5.83 |
% |
|
|
8.59 |
% |
|
Annualized return on average tangible equity (4) |
|
12.06 |
% |
|
(3.15 |
)% |
|
|
9.47 |
% |
|
|
7.13 |
% |
|
|
11.40 |
% |
|
Annualized adjusted return on average tangible equity (1) |
|
14.53 |
% |
|
|
2.01 |
% |
|
|
10.24 |
% |
|
|
9.56 |
% |
|
|
12.07 |
% |
|
Annualized adjusted non-interest expense to average assets (4) |
|
1.98 |
% |
|
|
2.02 |
% |
|
|
1.80 |
% |
|
|
1.99 |
% |
|
|
1.87 |
% |
|
Efficiency ratio (6) |
|
57.20 |
% |
|
|
57.86 |
% |
|
|
54.81 |
% |
|
|
58.27 |
% |
|
|
53.26 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
|
|
|
|
|
|
Non-accrual loans |
|
|
$ |
67,868 |
|
|
|
|
$ |
89,934 |
|
|
$ |
39,529 |
|
|
90+ and still accruing |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
Non-performing loans |
|
|
|
67,868 |
|
|
|
|
|
88,061 |
|
|
|
39,529 |
|
|
Foreclosed assets |
|
|
|
11,119 |
|
|
|
|
|
9,801 |
|
|
|
16,487 |
|
|
Non-performing assets |
|
|
|
78,987 |
|
|
|
|
|
97,862 |
|
|
|
56,016 |
|
|
Non-performing loans to total loans |
|
|
|
0.36 |
% |
|
|
|
|
0.47 |
% |
|
|
0.37 |
% |
|
Non-performing assets to total assets |
|
|
|
0.33 |
% |
|
|
|
|
0.41 |
% |
|
|
0.40 |
% |
|
Allowance for loan losses |
|
|
$ |
188,331 |
|
|
|
|
$ |
191,175 |
|
|
$ |
107,563 |
|
|
Allowance for loan losses to total non-performing loans |
|
|
|
277.50 |
% |
|
|
|
|
217.09 |
% |
|
|
272.11 |
% |
|
Allowance for loan losses to total loans |
|
|
|
1.00 |
% |
|
|
|
|
1.02 |
% |
|
|
1.01 |
% |
|
Net loan charge-offs |
$ |
6,756 |
|
|
$ |
1,340 |
|
|
$ |
5,510 |
|
|
$ |
9,067 |
|
|
$ |
7,266 |
|
|
Annualized net loan charge-offs to average total loans |
|
0.14 |
% |
|
|
0.04 |
% |
|
|
0.21 |
% |
|
|
0.08 |
% |
|
|
0.09 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Average Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
Assets |
$ |
24,248,038 |
|
|
$ |
19,197,041 |
|
|
$ |
13,976,610 |
|
|
$ |
19,198,113 |
|
|
$ |
13,848,351 |
|
|
Loans, net |
|
18,531,939 |
|
|
|
14,649,413 |
|
|
|
10,470,843 |
|
|
|
14,631,071 |
|
|
|
10,269,022 |
|
|
Earning assets |
|
21,809,226 |
|
|
|
17,385,819 |
|
|
|
12,735,938 |
|
|
|
17,305,446 |
|
|
|
12,574,437 |
|
|
Core deposits |
|
15,394,715 |
|
|
|
12,257,244 |
|
|
|
9,212,202 |
|
|
|
12,271,839 |
|
|
|
9,408,156 |
|
|
Borrowings |
|
2,125,149 |
|
|
|
2,158,193 |
|
|
|
1,780,655 |
|
|
|
2,074,958 |
|
|
|
1,556,619 |
|
|
Interest-bearing liabilities |
|
17,304,569 |
|
|
|
13,856,039 |
|
|
|
9,826,064 |
|
|
|
13,757,895 |
|
|
|
9,554,204 |
|
|
Stockholders' equity |
|
2,660,470 |
|
|
|
2,127,469 |
|
|
|
1,654,920 |
|
|
|
2,163,856 |
|
|
|
1,645,093 |
|
|
Average yield on interest-earning assets |
|
5.84 |
% |
|
|
5.67 |
% |
|
|
4.89 |
% |
|
|
5.61 |
% |
|
|
4.76 |
% |
|
Average cost of interest-bearing liabilities |
|
3.19 |
% |
|
|
3.09 |
% |
|
|
2.50 |
% |
|
|
3.06 |
% |
|
|
2.07 |
% |
| |
|
|
|
|
|
|
|
|
|
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 Adjusted Return on Average Assets, Equity
and Tangible Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net Income |
|
$ |
46,405 |
|
|
$ |
(11,485 |
) |
|
$ |
28,547 |
|
|
$ |
67,001 |
|
|
$ |
101,086 |
|
|
Merger-related transaction costs |
|
|
15,567 |
|
|
|
18,915 |
|
|
|
2,289 |
|
|
|
36,684 |
|
|
|
5,349 |
|
|
Less: income tax expense |
|
|
(4,306 |
) |
|
|
(4,625 |
) |
|
|
(486 |
) |
|
|
(9,274 |
) |
|
|
(1,015 |
) |
|
Annualized adjusted net income |
|
$ |
57,666 |
|
|
$ |
2,805 |
|
|
$ |
30,350 |
|
|
$ |
94,411 |
|
|
$ |
105,420 |
|
|
Less: Amortization of Intangibles (net of tax) |
|
$ |
8,551 |
|
|
$ |
4,532 |
|
|
$ |
503 |
|
|
$ |
13,577 |
|
|
$ |
1,560 |
|
|
Annualized adjusted net income for annualized adjusted return on
average tangible equity |
|
$ |
66,217 |
|
|
$ |
7,337 |
|
|
$ |
30,853 |
|
|
$ |
107,988 |
|
|
$ |
106,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Adjusted Return on Average Assets |
|
|
0.95 |
% |
|
|
0.06 |
% |
|
|
0.86 |
% |
|
|
0.66 |
% |
|
|
1.02 |
% |
|
Annualized Adjusted Return on Average Equity |
|
|
8.62 |
% |
|
|
0.53 |
% |
|
|
7.30 |
% |
|
|
5.83 |
% |
|
|
8.59 |
% |
|
Annualized Adjusted Return on Average Tangible Equity |
|
|
14.53 |
% |
|
|
2.01 |
% |
|
|
10.24 |
% |
|
|
9.56 |
% |
|
|
12.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Annualized adjusted pre-tax, pre-provision ("PTPP")
returns on average assets, average equity and average tangible
equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net income (loss) |
|
$ |
46,405 |
|
|
$ |
(11,485 |
) |
|
$ |
28,547 |
|
|
$ |
67,001 |
|
|
$ |
101,086 |
|
|
Adjustments to net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses |
|
|
9,299 |
|
|
|
69,705 |
|
|
|
12,541 |
|
|
|
78,684 |
|
|
|
29,031 |
|
|
Net loss on Lakeland bond sale |
|
|
— |
|
|
|
2,839 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Merger-related transaction costs |
|
|
15,567 |
|
|
|
18,915 |
|
|
|
2,289 |
|
|
|
36,684 |
|
|
|
5,349 |
|
|
Income tax expense (benefit) |
|
|
18,850 |
|
|
|
(9,833 |
) |
|
|
8,843 |
|
|
|
19,905 |
|
|
|
34,925 |
|
|
PTPP income |
|
$ |
90,121 |
|
|
$ |
70,141 |
|
|
$ |
52,220 |
|
|
$ |
202,274 |
|
|
$ |
170,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized PTPP income |
|
$ |
358,525 |
|
|
$ |
282,106 |
|
|
$ |
207,177 |
|
|
$ |
270,191 |
|
|
$ |
227,812 |
|
|
Average assets |
|
$ |
24,248,038 |
|
|
$ |
19,197,041 |
|
|
$ |
13,976,610 |
|
|
$ |
19,198,113 |
|
|
$ |
13,848,351 |
|
|
Average equity |
|
$ |
2,660,470 |
|
|
$ |
2,127,469 |
|
|
$ |
1,654,920 |
|
|
$ |
2,163,856 |
|
|
$ |
1,645,093 |
|
|
Average tangible equity |
|
$ |
1,813,327 |
|
|
$ |
1,468,630 |
|
|
$ |
1,195,787 |
|
|
$ |
1,508,594 |
|
|
$ |
1,185,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized PTPP return on average assets |
|
|
1.48 |
% |
|
|
1.47 |
% |
|
|
1.48 |
% |
|
|
1.41 |
% |
|
|
1.65 |
% |
|
Annualized PTPP return on average equity |
|
|
13.48 |
% |
|
|
13.26 |
% |
|
|
12.52 |
% |
|
|
12.49 |
% |
|
|
13.85 |
% |
|
Annualized PTPP return on average tangible equity |
|
|
19.77 |
% |
|
|
19.21 |
% |
|
|
17.33 |
% |
|
|
17.91 |
% |
|
|
19.22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Book and Tangible Book Value per Share |
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
December 31, |
|
|
|
|
|
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Total stockholders' equity |
|
|
|
|
|
$ |
2,621,058 |
|
|
$ |
2,555,646 |
|
|
$ |
1,690,596 |
|
|
Less: total intangible assets |
|
|
|
|
|
|
839,223 |
|
|
|
851,507 |
|
|
|
457,942 |
|
|
Total tangible stockholders' equity |
|
|
|
|
|
$ |
1,781,835 |
|
|
$ |
1,704,139 |
|
|
$ |
1,232,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
|
|
|
|
|
|
130,448,599 |
|
|
|
130,380,393 |
|
|
|
75,537,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share (total stockholders' equity/shares
outstanding) |
|
|
|
|
|
$ |
20.09 |
|
|
$ |
19.60 |
|
|
$ |
22.38 |
|
|
Tangible book value per share (total tangible stockholders'
equity/shares outstanding) |
|
|
|
|
|
$ |
13.66 |
|
|
$ |
13.07 |
|
|
$ |
16.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Annualized Return on Average Tangible
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Total average stockholders' equity |
|
$ |
2,660,470 |
|
|
$ |
2,127,469 |
|
|
$ |
1,654,920 |
|
|
$ |
2,163,856 |
|
|
$ |
1,645,093 |
|
|
Less: total average intangible assets |
|
|
847,143 |
|
|
|
658,839 |
|
|
|
459,133 |
|
|
|
655,262 |
|
|
|
459,871 |
|
|
Total average tangible stockholders' equity |
|
$ |
1,813,327 |
|
|
$ |
1,468,630 |
|
|
$ |
1,195,787 |
|
|
$ |
1,508,594 |
|
|
$ |
1,185,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
46,405 |
|
|
$ |
(11,485 |
) |
|
$ |
28,547 |
|
|
$ |
67,001 |
|
|
$ |
101,086 |
|
|
Less: Amortization of Intangibles, net of tax |
|
|
8,551 |
|
|
|
4,532 |
|
|
|
503 |
|
|
|
13,577 |
|
|
|
1,560 |
|
|
Total net income (loss) |
|
$ |
54,956 |
|
|
$ |
(6,953 |
) |
|
$ |
29,050 |
|
|
$ |
80,578 |
|
|
$ |
102,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average tangible equity (net income/total
average tangible stockholders' equity) |
|
|
12.06 |
% |
|
(1.90) % |
|
|
9.64 |
% |
|
|
7.13 |
% |
|
|
11.58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Annualized Adjusted Non-Interest Expense to Average
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Reported non-interest expense |
|
$ |
136,002 |
|
|
$ |
115,394 |
|
|
$ |
65,625 |
|
|
$ |
323,224 |
|
|
$ |
199,485 |
|
|
Adjustments to non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
Merger-related transaction costs |
|
|
15,567 |
|
|
|
18,915 |
|
|
|
2,289 |
|
|
|
36,684 |
|
|
|
5,349 |
|
|
Adjusted non-interest expense |
|
$ |
120,435 |
|
|
$ |
96,479 |
|
|
$ |
63,336 |
|
|
$ |
286,540 |
|
|
$ |
194,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized adjusted non-interest expense |
|
$ |
479,122 |
|
|
$ |
388,036 |
|
|
$ |
251,279 |
|
|
$ |
382,751 |
|
|
$ |
259,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
24,248,038 |
|
|
$ |
19,197,041 |
|
|
$ |
13,976,610 |
|
|
$ |
19,198,113 |
|
|
$ |
13,848,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized adjusted non-interest expense/average assets |
|
|
1.98 |
% |
|
|
2.02 |
% |
|
|
1.80 |
% |
|
|
1.99 |
% |
|
|
1.87 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Efficiency Ratio Calculation |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Net interest income |
|
$ |
183,701 |
|
|
$ |
141,506 |
|
|
$ |
96,236 |
|
|
$ |
418,877 |
|
|
$ |
303,666 |
|
|
Reported non-interest income |
|
|
26,855 |
|
|
|
22,275 |
|
|
|
19,320 |
|
|
|
69,937 |
|
|
|
60,861 |
|
|
Adjustments to non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
Net (gain) loss on securities transactions |
|
|
(2 |
) |
|
|
2,973 |
|
|
|
13 |
|
|
|
2,972 |
|
|
|
(37 |
) |
|
Adjusted non-interest income |
|
|
26,853 |
|
|
|
25,248 |
|
|
|
19,333 |
|
|
|
72,909 |
|
|
|
60,824 |
|
|
Total income |
|
$ |
210,554 |
|
|
$ |
166,754 |
|
|
$ |
115,569 |
|
|
$ |
491,786 |
|
|
$ |
364,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted non-interest expense |
|
$ |
120,435 |
|
|
$ |
96,479 |
|
|
$ |
63,336 |
|
|
$ |
286,540 |
|
|
$ |
194,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio (adjusted non-interest expense/income) |
|
|
57.20 |
% |
|
|
57.86 |
% |
|
|
54.80 |
% |
|
|
58.27 |
% |
|
|
53.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Consolidated Statements of Financial Condition |
|
September 30, 2024 (Unaudited) and December 31, 2023 |
|
(Dollars in Thousands) |
| |
|
|
|
|
Assets |
September 30, 2024 |
|
December 31, 2023 |
|
Cash and due from banks |
$ |
244,064 |
|
|
$ |
180,241 |
|
|
Short-term investments |
|
25 |
|
|
|
14 |
|
|
Total cash and cash equivalents |
|
244,089 |
|
|
|
180,255 |
|
|
Available for sale debt securities, at fair value |
|
2,725,110 |
|
|
|
1,690,112 |
|
|
Held to maturity debt securities, net of allowance (fair value of
$322,427 as of September 30, 2024 (unaudited) and $352,601 as of
December 31, 2023) |
|
332,021 |
|
|
|
363,080 |
|
|
Equity securities, at fair value |
|
20,044 |
|
|
|
1,270 |
|
|
Federal Home Loan Bank stock |
|
96,219 |
|
|
|
79,217 |
|
|
Loans held for sale |
|
5,757 |
|
|
|
1,785 |
|
|
Loans held for investment |
|
18,794,609 |
|
|
|
10,871,916 |
|
|
Less allowance for credit losses |
|
191,175 |
|
|
|
107,200 |
|
|
Net loans |
|
18,609,191 |
|
|
|
10,766,501 |
|
|
Foreclosed assets, net |
|
9,801 |
|
|
|
11,651 |
|
|
Banking premises and equipment, net |
|
124,955 |
|
|
|
70,998 |
|
|
Accrued interest receivable |
|
89,866 |
|
|
|
58,966 |
|
|
Intangible assets |
|
839,223 |
|
|
|
457,942 |
|
|
Bank-owned life insurance |
|
403,648 |
|
|
|
243,050 |
|
|
Other assets |
|
548,348 |
|
|
|
287,768 |
|
|
Total assets |
$ |
24,042,515 |
|
|
$ |
14,210,810 |
|
| |
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
Deposits: |
|
|
|
|
Demand deposits |
$ |
13,548,480 |
|
|
$ |
8,020,889 |
|
|
Savings deposits |
|
1,671,209 |
|
|
|
1,175,683 |
|
|
Certificates of deposit of $250,000 or more |
|
800,005 |
|
|
|
218,549 |
|
|
Other time deposits |
|
2,356,491 |
|
|
|
877,393 |
|
|
Total deposits |
|
18,376,185 |
|
|
|
10,292,514 |
|
|
Mortgage escrow deposits |
|
48,007 |
|
|
|
36,838 |
|
|
Borrowed funds |
|
2,214,512 |
|
|
|
1,970,033 |
|
|
Subordinated debentures |
|
414,184 |
|
|
|
10,695 |
|
|
Other liabilities |
|
368,569 |
|
|
|
210,134 |
|
|
Total liabilities |
|
21,421,457 |
|
|
|
12,520,214 |
|
| |
|
|
|
|
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,
137,565,966 shares issued and 130,448,599 shares outstanding as of
September 30, 2024 and 75,537,186 outstanding as of December 31,
2023. |
|
1,376 |
|
|
|
832 |
|
|
Additional paid-in capital |
|
1,871,343 |
|
|
|
989,058 |
|
|
Retained earnings |
|
972,997 |
|
|
|
974,542 |
|
|
Accumulated other comprehensive loss |
|
(93,049 |
) |
|
|
(141,115 |
) |
|
Treasury stock |
|
(129,148 |
) |
|
|
(127,825 |
) |
|
Unallocated common stock held by the Employee Stock Ownership
Plan |
|
(2,461 |
) |
|
|
(4,896 |
) |
|
Common Stock acquired by the Directors' Deferred Fee Plan |
|
(2,247 |
) |
|
|
(2,694 |
) |
|
Deferred Compensation - Directors' Deferred Fee Plan |
|
2,247 |
|
|
|
2,694 |
|
|
Total stockholders' equity |
|
2,621,058 |
|
|
|
1,690,596 |
|
|
Total liabilities and stockholders' equity |
$ |
24,042,515 |
|
|
$ |
14,210,810 |
|
|
|
|
|
|
|
|
|
|
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Consolidated Statements of Income |
|
Three months ended September 30, 2024, June 30, 2024 and
September 30, 2023, and nine months ended September 30,
2024 and 2023 (Unaudited) |
|
(Dollars in Thousands, except per share data) |
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
2024 |
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
Real estate secured loans |
$ |
197,857 |
|
$ |
156,318 |
|
|
$ |
104,540 |
|
$ |
461,632 |
|
|
$ |
299,830 |
|
Commercial loans |
|
81,183 |
|
|
58,532 |
|
|
|
33,806 |
|
|
175,815 |
|
|
|
93,915 |
|
Consumer loans |
|
12,947 |
|
|
8,351 |
|
|
|
4,746 |
|
|
25,820 |
|
|
|
13,419 |
|
Available for sale debt securities, equity securities and Federal
Home Loan Bank stock |
|
25,974 |
|
|
20,394 |
|
|
|
11,886 |
|
|
58,698 |
|
|
|
34,748 |
|
Held to maturity debt securities |
|
2,136 |
|
|
2,357 |
|
|
|
2,334 |
|
|
6,761 |
|
|
|
7,059 |
|
Deposits, federal funds sold and other short-term investments |
|
2,425 |
|
|
1,859 |
|
|
|
885 |
|
|
5,466 |
|
|
|
2,678 |
|
Total interest income |
|
322,522 |
|
|
247,811 |
|
|
|
158,197 |
|
|
734,192 |
|
|
|
451,649 |
| |
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
110,009 |
|
|
81,058 |
|
|
|
44,923 |
|
|
243,602 |
|
|
|
108,880 |
|
Borrowed funds |
|
19,923 |
|
|
20,566 |
|
|
|
16,765 |
|
|
57,871 |
|
|
|
38,329 |
|
Subordinated debt |
|
8,889 |
|
|
4,681 |
|
|
|
273 |
|
|
13,842 |
|
|
|
774 |
|
Total interest expense |
|
138,821 |
|
|
106,305 |
|
|
|
61,961 |
|
|
315,315 |
|
|
|
147,983 |
|
Net interest income |
|
183,701 |
|
|
141,506 |
|
|
|
96,236 |
|
|
418,877 |
|
|
|
303,666 |
|
Provision charge for credit losses |
|
9,299 |
|
|
69,705 |
|
|
|
12,541 |
|
|
78,684 |
|
|
|
29,031 |
|
Net interest income after provision for credit losses |
|
174,402 |
|
|
71,801 |
|
|
|
83,695 |
|
|
340,193 |
|
|
|
274,635 |
| |
|
|
|
|
|
|
|
|
|
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
Fees |
|
9,816 |
|
|
8,699 |
|
|
|
6,132 |
|
|
24,426 |
|
|
|
18,294 |
|
Wealth management income |
|
7,620 |
|
|
7,769 |
|
|
|
6,992 |
|
|
22,878 |
|
|
|
20,826 |
|
Insurance agency income |
|
3,631 |
|
|
4,488 |
|
|
|
3,224 |
|
|
12,912 |
|
|
|
11,175 |
|
Bank-owned life insurance |
|
4,308 |
|
|
3,323 |
|
|
|
1,820 |
|
|
9,448 |
|
|
|
4,838 |
|
Net gain (loss) on securities transactions |
|
2 |
|
|
(2,973 |
) |
|
|
13 |
|
|
(2,972 |
) |
|
|
37 |
|
Other income |
|
1,478 |
|
|
969 |
|
|
|
1,139 |
|
|
3,245 |
|
|
|
5,691 |
|
Total non-interest income |
|
26,855 |
|
|
22,275 |
|
|
|
19,320 |
|
|
69,937 |
|
|
|
60,861 |
| |
|
|
|
|
|
|
|
|
|
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
63,468 |
|
|
54,888 |
|
|
|
35,702 |
|
|
158,404 |
|
|
|
109,724 |
|
Net occupancy expense |
|
12,790 |
|
|
11,142 |
|
|
|
8,113 |
|
|
32,452 |
|
|
|
24,474 |
|
Data processing expense |
|
10,481 |
|
|
8,433 |
|
|
|
5,312 |
|
|
25,698 |
|
|
|
16,536 |
|
FDIC Insurance |
|
4,180 |
|
|
3,100 |
|
|
|
1,628 |
|
|
9,553 |
|
|
|
5,688 |
|
Amortization of intangibles |
|
12,231 |
|
|
6,483 |
|
|
|
720 |
|
|
19,420 |
|
|
|
2,231 |
|
Advertising and promotion expense |
|
1,524 |
|
|
1,171 |
|
|
|
1,133 |
|
|
3,661 |
|
|
|
3,722 |
|
Merger-related expenses |
|
15,567 |
|
|
18,915 |
|
|
|
2,289 |
|
|
36,684 |
|
|
|
5,349 |
|
Other operating expenses |
|
15,761 |
|
|
11,262 |
|
|
|
10,728 |
|
|
37,352 |
|
|
|
31,761 |
|
Total non-interest expense |
|
136,002 |
|
|
115,394 |
|
|
|
65,625 |
|
|
323,224 |
|
|
|
199,485 |
|
Income (loss) before income tax expense |
|
65,255 |
|
|
(21,318 |
) |
|
|
37,390 |
|
|
86,906 |
|
|
|
136,011 |
|
Income tax expense (benefit) |
|
18,850 |
|
|
(9,833 |
) |
|
|
8,843 |
|
|
19,905 |
|
|
|
34,925 |
|
Net income (loss) |
$ |
46,405 |
|
$ |
(11,485 |
) |
|
$ |
28,547 |
|
$ |
67,001 |
|
|
$ |
101,086 |
| |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.36 |
|
$ |
(0.11 |
) |
|
$ |
0.38 |
|
$ |
0.65 |
|
|
$ |
1.35 |
|
Average basic shares outstanding |
|
129,941,845 |
|
|
102,957,521 |
|
|
|
74,909,083 |
|
|
102,819,042 |
|
|
|
74,793,530 |
| |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
0.36 |
|
$ |
(0.11 |
) |
|
$ |
0.38 |
|
$ |
0.65 |
|
|
$ |
1.35 |
|
Average diluted shares outstanding |
|
130,004,870 |
|
|
102,957,521 |
|
|
|
74,914,205 |
|
|
102,845,261 |
|
|
|
74,816,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Net Interest Margin Analysis |
|
Quarterly Average Balances |
|
(Dollars in Thousands) (Unaudited) |
| |
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
| |
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Average Balance |
|
Interest |
|
Average Yield/Cost |
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
$ |
179,313 |
|
$ |
2,425 |
|
5.38 |
% |
|
$ |
40,228 |
|
$ |
1,859 |
|
5.38 |
% |
|
$ |
74,183 |
|
$ |
884 |
|
4.73 |
% |
|
Federal funds sold and other short-term investments |
|
— |
|
|
— |
|
— |
% |
|
|
0 |
|
|
— |
|
— |
% |
|
|
57 |
|
|
1 |
|
4.00 |
% |
|
Available for sale debt securities |
|
2,644,262 |
|
|
24,884 |
|
3.72 |
% |
|
|
2,244,725 |
|
|
17,647 |
|
3.14 |
% |
|
|
1,724,833 |
|
|
10,127 |
|
2.35 |
% |
|
Held to maturity debt securities, net (1) |
|
342,217 |
|
|
2,136 |
|
2.50 |
% |
|
|
352,216 |
|
|
2,357 |
|
2.68 |
% |
|
|
373,681 |
|
|
2,334 |
|
2.50 |
% |
|
Equity securities, at fair value |
|
19,654 |
|
|
— |
|
— |
% |
|
|
10,373 |
|
|
— |
|
— |
% |
|
|
1,068 |
|
|
— |
|
— |
% |
|
Federal Home Loan Bank stock |
|
91,841 |
|
|
1,090 |
|
4.75 |
% |
|
|
88,864 |
|
|
2,747 |
|
12.36 |
% |
|
|
91,273 |
|
|
1,759 |
|
7.71 |
% |
|
Net loans: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total mortgage loans |
|
13,363,265 |
|
|
197,857 |
|
5.83 |
% |
|
|
10,674,109 |
|
|
156,318 |
|
5.81 |
% |
|
|
7,881,193 |
|
|
104,540 |
|
5.21 |
% |
|
Total commercial loans |
|
4,546,088 |
|
|
81,183 |
|
7.05 |
% |
|
|
3,514,602 |
|
|
58,532 |
|
6.62 |
% |
|
|
2,289,267 |
|
|
33,806 |
|
5.81 |
% |
|
Total consumer loans |
|
622,586 |
|
|
12,947 |
|
8.27 |
% |
|
|
460,702 |
|
|
8,351 |
|
7.29 |
% |
|
|
300,383 |
|
|
4,746 |
|
6.27 |
% |
|
Total net loans |
|
18,531,939 |
|
|
291,987 |
|
6.21 |
% |
|
|
14,649,413 |
|
|
223,201 |
|
6.05 |
% |
|
|
10,470,843 |
|
|
143,092 |
|
5.37 |
% |
|
Total interest-earning assets |
$ |
21,809,226 |
|
$ |
322,522 |
|
5.84 |
% |
|
$ |
17,385,819 |
|
$ |
247,811 |
|
5.67 |
% |
|
$ |
12,735,938 |
|
$ |
158,197 |
|
4.89 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
341,505 |
|
|
|
|
|
|
37,621 |
|
|
|
|
|
|
82,522 |
|
|
|
|
|
Other assets |
|
2,097,307 |
|
|
|
|
|
|
1,773,601 |
|
|
|
|
|
|
1,158,150 |
|
|
|
|
|
Total assets |
$ |
24,248,038 |
|
|
|
|
|
$ |
19,197,041 |
|
|
|
|
|
$ |
13,976,610 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
$ |
9,942,053 |
|
$ |
74,864 |
|
3.00 |
% |
|
$ |
7,935,543 |
|
$ |
58,179 |
|
2.95 |
% |
|
$ |
5,741,052 |
|
$ |
35,290 |
|
2.44 |
% |
|
Savings deposits |
|
1,711,502 |
|
|
1,006 |
|
0.23 |
% |
|
|
1,454,784 |
|
|
832 |
|
0.23 |
% |
|
|
1,240,951 |
|
|
592 |
|
0.19 |
% |
|
Time deposits |
|
3,112,598 |
|
|
34,139 |
|
4.36 |
% |
|
|
2,086,433 |
|
|
22,047 |
|
4.25 |
% |
|
|
1,052,793 |
|
|
9,041 |
|
3.41 |
% |
|
Total deposits |
|
14,766,153 |
|
|
110,009 |
|
2.96 |
% |
|
|
11,476,760 |
|
|
81,058 |
|
2.84 |
% |
|
|
8,034,796 |
|
|
44,923 |
|
2.22 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowed funds |
|
2,125,149 |
|
|
19,923 |
|
3.73 |
% |
|
|
2,158,193 |
|
|
20,566 |
|
3.83 |
% |
|
|
1,780,655 |
|
|
16,765 |
|
3.74 |
% |
|
Subordinated debentures |
|
413,267 |
|
|
8,889 |
|
8.56 |
% |
|
|
221,086 |
|
|
4,681 |
|
8.52 |
% |
|
|
10,613 |
|
|
273 |
|
10.24 |
% |
|
Total interest-bearing liabilities |
|
17,304,569 |
|
|
138,821 |
|
3.19 |
% |
|
|
13,856,039 |
|
|
106,305 |
|
3.09 |
% |
|
|
9,826,064 |
|
|
61,961 |
|
2.50 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
3,741,160 |
|
|
|
|
|
|
2,866,917 |
|
|
|
|
|
|
2,230,199 |
|
|
|
|
|
Other non-interest bearing liabilities |
|
541,839 |
|
|
|
|
|
|
346,616 |
|
|
|
|
|
|
265,427 |
|
|
|
|
|
Total non-interest bearing liabilities |
|
4,282,999 |
|
|
|
|
|
|
3,213,533 |
|
|
|
|
|
|
2,495,626 |
|
|
|
|
|
Total liabilities |
|
21,587,568 |
|
|
|
|
|
|
17,069,572 |
|
|
|
|
|
|
12,321,690 |
|
|
|
|
|
Stockholders' equity |
|
2,660,470 |
|
|
|
|
|
|
2,127,469 |
|
|
|
|
|
|
1,654,920 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
24,248,038 |
|
|
|
|
|
$ |
19,197,041 |
|
|
|
|
|
$ |
13,976,610 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
183,701 |
|
|
|
|
|
$ |
141,506 |
|
|
|
|
|
$ |
96,236 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
2.65 |
% |
|
|
|
|
|
2.58 |
% |
|
|
|
|
|
2.39 |
% |
|
Net interest-earning assets |
$ |
4,504,657 |
|
|
|
|
|
$ |
3,529,780 |
|
|
|
|
|
$ |
2,909,874 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (3) |
|
|
|
|
3.31 |
% |
|
|
|
|
|
3.21 |
% |
|
|
|
|
|
2.96 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets to total interest-bearing
liabilities |
1.26x |
|
|
|
|
|
1.25x |
|
|
|
|
|
1.30x |
|
|
|
|
|
|
|
|
(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. |
|
|
|
| |
9/30/24 |
|
6/30/24 |
|
3/31/24 |
|
12/31/23 |
|
9/30/23 |
| |
3rd Qtr. |
|
2nd Qtr. |
|
1st Qtr. |
|
4th Qtr. |
|
3rd Qtr. |
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
Securities |
3.69 |
% |
|
3.40 |
% |
|
2.87 |
% |
|
2.79 |
% |
|
2.67 |
% |
|
Net loans |
6.21 |
% |
|
6.05 |
% |
|
5.51 |
% |
|
5.50 |
% |
|
5.37 |
% |
|
Total interest-earning assets |
5.84 |
% |
|
5.67 |
% |
|
5.06 |
% |
|
5.04 |
% |
|
4.89 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
Total deposits |
2.96 |
% |
|
2.84 |
% |
|
2.60 |
% |
|
2.47 |
% |
|
2.22 |
% |
|
Total borrowings |
3.73 |
% |
|
3.83 |
% |
|
3.60 |
% |
|
3.71 |
% |
|
3.74 |
% |
|
Total interest-bearing liabilities |
3.19 |
% |
|
3.09 |
% |
|
2.80 |
% |
|
2.71 |
% |
|
2.50 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
2.65 |
% |
|
2.58 |
% |
|
2.26 |
% |
|
2.33 |
% |
|
2.39 |
% |
|
Net interest margin |
3.31 |
% |
|
3.21 |
% |
|
2.87 |
% |
|
2.92 |
% |
|
2.96 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets to interest-bearing
liabilities |
1.26x |
|
1.25x |
|
1.28x |
|
1.28x |
|
1.30x |
|
|
|
|
|
|
|
|
|
|
|
|
PROVIDENT FINANCIAL SERVICES, INC. AND
SUBSIDIARY |
|
Net Interest Margin Analysis |
|
Average Year to Date Balances |
|
(Dollars in Thousands) (Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
September 30, 2024 |
|
September 30, 2023 |
| |
Average |
|
|
|
Average |
|
Average |
|
|
|
Average |
| |
Balance |
|
Interest |
|
Yield/Cost |
|
Balance |
|
Interest |
|
Yield/Cost |
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
$ |
39,280 |
|
$ |
5,466 |
|
5.38 |
% |
|
$ |
69,696 |
|
$ |
2,676 |
|
5.13 |
% |
|
Federal funds sold and other short term investments |
|
— |
|
|
— |
|
— |
% |
|
|
58 |
|
|
2 |
|
5.34 |
% |
|
Available for sale debt securities |
|
2,189,671 |
|
|
52,553 |
|
3.19 |
% |
|
|
1,777,861 |
|
|
30,819 |
|
2.31 |
% |
|
Held to maturity debt securities, net (1) |
|
350,529 |
|
|
6,761 |
|
2.57 |
% |
|
|
379,144 |
|
|
7,059 |
|
2.48 |
% |
|
Equity securities, at fair value |
|
10,050 |
|
|
— |
|
— |
% |
|
|
1,022 |
|
|
— |
|
— |
% |
|
Federal Home Loan Bank stock |
|
84,845 |
|
|
6,145 |
|
9.66 |
% |
|
|
77,634 |
|
|
3,929 |
|
6.75 |
% |
|
Net loans: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Total mortgage loans |
|
10,682,974 |
|
|
461,632 |
|
5.70 |
% |
|
|
7,740,591 |
|
|
299,830 |
|
5.12 |
% |
|
Total commercial loans |
|
3,487,600 |
|
|
175,815 |
|
6.69 |
% |
|
|
2,225,725 |
|
|
93,915 |
|
5.60 |
% |
|
Total consumer loans |
|
460,497 |
|
|
25,820 |
|
7.49 |
% |
|
|
302,706 |
|
|
13,419 |
|
5.93 |
% |
|
Total net loans |
|
14,631,071 |
|
|
663,267 |
|
5.99 |
% |
|
|
10,269,022 |
|
|
407,164 |
|
5.25 |
% |
|
Total interest-earning assets |
$ |
17,305,446 |
|
$ |
734,192 |
|
5.61 |
% |
|
$ |
12,574,437 |
|
$ |
451,649 |
|
4.76 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
229,336 |
|
|
|
|
|
|
121,801 |
|
|
|
|
|
Other assets |
|
1,663,331 |
|
|
|
|
|
|
1,152,113 |
|
|
|
|
|
Total assets |
$ |
19,198,113 |
|
|
|
|
|
$ |
13,848,351 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
$ |
7,931,251 |
|
$ |
174,609 |
|
2.94 |
% |
|
$ |
5,710,855 |
|
$ |
85,822 |
|
2.01 |
% |
|
Savings deposits |
|
1,444,135 |
|
|
2,476 |
|
0.23 |
% |
|
|
1,315,157 |
|
|
1,582 |
|
0.16 |
% |
|
Time deposits |
|
2,091,806 |
|
|
66,517 |
|
4.25 |
% |
|
|
961,010 |
|
|
21,476 |
|
2.99 |
% |
|
Total deposits |
|
11,467,192 |
|
|
243,602 |
|
2.84 |
% |
|
|
7,987,022 |
|
|
108,880 |
|
1.82 |
% |
|
Borrowed funds |
|
2,074,958 |
|
|
57,871 |
|
3.73 |
% |
|
|
1,556,619 |
|
|
38,329 |
|
3.29 |
% |
|
Subordinated debentures |
|
215,745 |
|
|
13,842 |
|
8.57 |
% |
|
|
10,563 |
|
|
774 |
|
9.80 |
% |
|
Total interest-bearing liabilities |
$ |
13,757,895 |
|
$ |
315,315 |
|
3.06 |
% |
|
$ |
9,554,204 |
|
$ |
147,983 |
|
2.07 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
2,896,453 |
|
|
|
|
|
|
2,382,144 |
|
|
|
|
|
Other non-interest bearing liabilities |
|
379,909 |
|
|
|
|
|
|
266,910 |
|
|
|
|
|
Total non-interest bearing liabilities |
|
3,276,362 |
|
|
|
|
|
|
2,649,054 |
|
|
|
|
|
Total liabilities |
|
17,034,257 |
|
|
|
|
|
|
12,203,258 |
|
|
|
|
|
Stockholders' equity |
|
2,163,856 |
|
|
|
|
|
|
1,645,093 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
19,198,113 |
|
|
|
|
|
$ |
13,848,351 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
$ |
418,877 |
|
|
|
|
|
$ |
303,666 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
|
|
|
|
2.55 |
% |
|
|
|
|
|
2.69 |
% |
|
Net interest-earning assets |
$ |
3,547,551 |
|
|
|
|
|
$ |
3,020,233 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin (3) |
|
|
|
|
3.18 |
% |
|
|
|
|
|
3.19 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of interest-earning assets to total interest-bearing
liabilities |
1.26x |
|
|
|
|
|
1.32x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
| |
|
|
|
|
|
|
| |
Nine Months Ended |
|
| |
September 30, 2024 |
|
September 30, 2023 |
|
September 23, 2022 |
|
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
Securities |
3.33 |
% |
|
2.57 |
% |
|
1.72 |
% |
|
|
Net loans |
5.99 |
% |
|
5.25 |
% |
|
4.01 |
% |
|
|
Total interest-earning assets |
5.61 |
% |
|
4.76 |
% |
|
3.51 |
% |
|
| |
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
Total deposits |
2.84 |
% |
|
1.82 |
% |
|
0.33 |
% |
|
|
Total borrowings |
3.73 |
% |
|
3.29 |
% |
|
0.97 |
% |
|
|
Total interest-bearing liabilities |
3.06 |
% |
|
2.07 |
% |
|
0.38 |
% |
|
| |
|
|
|
|
|
|
|
Interest rate spread |
2.55 |
% |
|
2.69 |
% |
|
3.13 |
% |
|
|
Net interest margin |
3.18 |
% |
|
3.19 |
% |
|
3.24 |
% |
|
| |
|
|
|
|
|
|
|
Ratio of interest-earning assets to interest-bearing
liabilities |
1.26x |
|
1.32x |
|
1.38x |
|
SOURCE: Provident Financial Services, Inc. CONTACT: Investor
Relations, 1-732-590-9300 Web Site: http://www.Provident.Bank
Provident Financial Serv... (NYSE:PFS)
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