Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Investor Presentation (May 2020)
25 slides from Provident Financial Services's investor presentation, May 27, 2020
Slide 1: Q1 2020 Investor Presentation
Q1 2020 INVESTOR PRESENTATION
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements contained herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or
Slide 3: Corporate Profile
Corporate Profile Bank founded: 1839 Stock symbol: PFS (NYSE) Branches: 83 serving northern and central New Jersey and eastern Pennsylvania Market capitalization: $879.1 Million as of 5/26/20 $10.1 Billion in Total Assets Balance sheet as of 3/31/20: $7.3 Billion in Net Loans $7.2 Billion in Total D
Slide 4: Successful & Disciplined Acquirer
Successful & Disciplined Acquirer Acquired Acquired First Sentinel First Morris Bank & Acquired Pending Acquisition IPO NYSE Bancorp Trust Team Capital Bank of SB One Bancorp PFS Assets: $2.6B Assets: $554M Assets: $964M Assets: $2.0B 1839 Founded 2003 2004 2007 2011 2014 2015 2019 2020 Acquired Acq
Slide 5: Strong Presence in Attractive Markets
Strong Presence in Attractive Markets POPULATION Densely populated, lucrative markets (2020 Estimates) Highly educated, wealthy population NJ – 8,926,519 Diverse economy proximate to New York City and Philadelphia metro areas PA – 12,817,939 Bucks – 629,125 Lehigh – 371,790 Northampton –
Slide 6: Strong Presence in Attractive Markets
Strong Presence in Attractive Markets Deposit Share* Average client tenure as of 4/30/20*** Provident ranks 9th in our footprint in NJ and 28th in PA Business < 1 year 8% 1 – 2 years 16% Businesses in market (excluding franchises) ** 3 – 5 years 18% NJ (13 counties where Provident has bran
Slide 7: Proven Consistent Performance
Proven Consistent Performance 1.40% 1.75% 1.72% 1.26% 1.22% 1.70% 1.20% 1.15% 1.68% 1.05% 1.65% 1.63% 0.99% 1.00% 1.60% 0.80% 1.55% 1.53% 0.61% 1.49% 0.60% 1.50% 1.46% 1.45% 0.40% 1.40% 0.20% 1.35% 0.00% 1.30% 2017 2018 2019 2017 2018 2019 Q3 2019 Q3 2019 Q4 2020 Q1 Q3 2019 Q3 2019 Q4 2020 Q1 ROAA P
Slide 8: Proven Consistent Performance
Proven Consistent Performance 10.00% 14.00% 13.07% 12.97% 8.93% 8.90% 9.00% 11.71% 8.07% 12.00% 8.00% 10.82% 10.56% 7.28% 7.29% 7.00% 10.00% 6.00% 8.00% 5.00% 4.22% 6.10% 6.00% 4.00% 3.00% 4.00% 2.00% 2.00% 1.00% 0.00% 0.00% 2017 2018 2019 2017 2018 2019 Q3 2019 Q3 2019 Q4 2020 Q1 Q3 2019 Q3 2019 Q4
Slide 9: Strong Track Record of Returns
Strong Track Record of Returns 2014 2015 2016 2017 2018 2019 $1.82 7% $1.74 CAGR Diluted Earnings $1.45 per Share $1.33 $1.38 $1.22 5% $14.85 $14.18 CAGR Tangible Book $13.20 $12.54 Value per Share (1) $11.40 $11.75 $0.23 +53% $0.21 $0.20 Regular Quarterly $0.19 Cash Dividend per $0.17 Share (2) $0.
Slide 10: Stable Core Funding Base - at 3/31/20
Stable Core Funding Base - at 3/31/20 AVERAGE $ in thousands # of Accts ($) Balance DEPOSIT COMPOSITION Total Deposits 210,102 7,162,050 Average Branch Size 3,087 86,290 Certificates of deposits Savings Median Branch Size 2,092 75,821 11% deposits 14% AVERAGE DEPOSIT COMPOSITION Non-interest bearing
Slide 11: Diversified Loan Portfolio
Diversified Loan Portfolio Consumer Loans 379,597 As of 3/31/20 5% ($ in thousands) Residential Mortgage Loans Commercial 1,107,197 Total Loans 15% 1,703,669 Gross Loans 23% Loan to Deposit: Commercial $7,377,021 108.68%Mortgage Loans 2,555,177 Multi-Family 35% Commercial Loans Construction Loans 1,
Slide 12: Solid Credit Posture
Solid Credit Posture 2017 2018 2019 Q3 19 Q4 19 Q1 20 1.02% Total allowance to total loans 0.82% 0.77% 0.76% 0.79% 0.76% Non-performing assets to loans + REO 0.57% 0.58% 0.57% 0.58% 0.54% 0.38% 0.55% 0.55% 0.55% 0.48% 0.48% Non-performing loans to total loans 0.35% 0.44% 0.44% Non-performing assets
Slide 13: Solid Credit Posture: Non-Performing Assets
Solid Credit Posture Non-Performing Assets $ in thousands 2017 2018 2019 Q3 2019 Q4 2019 Q1 2020 Residential mortgage loans $8,105 $5,853 $8,543 $6,456 $8,543 $6,145 Commercial mortgage loans 7,090 3,180 5,270 1,728 5,270 5,264 Multi-family mortgage loans - - - - - - Construction loans - - - - - - C
Slide 14: Emphasis on Fee Income
Emphasis on Fee Income Non-Interest Income $60,000 $ in thousands $50,000 $40,000 $30,000 $20,000 $10,000 $0 2017 2018 2019 Q3 2019 Q4 2019 Q1 2020 Fees $27,218 $28,084 $28,321 $7,634 $7,704 $6,529 Wealth management income 17,604 17,957 22,503 6,084 6,097 6,251 Bank-owned life insurance 6,693 5,514
Slide 15: Focus on Wealth Management Business
Focus on Wealth Management Business 2020 Revenue (actual YTD thru March 31, 2020) Trust & Estate Advisory $ 5,672,743 9% Trust & Estate $ 508,570 Tax $ 70,115 Private Banking Private Banking $ 90,422 * 1% Total $ 6,341,850 Advisory Tax 89% 1% NYSE: PFS * Represents interest on lines of credit to Bea
Slide 16: Focus on Wealth Management Business
Focus on Wealth Management Business AVERAGE EBITDA & NET INCOME CLIENT SIZE EBITDA (YTD thru March 31, 2020) $ 2,834,000 Net Income (YTD thru March 31, 2020) $ 1,696,000 CROSSOVER PROVIDENT/BEACON $2,950,000 (HOW MANY PROVIDENT CUSTOMERS ARE BEACON CLIENTS) As of March 2020, based on AUM of $2.8B fo
Slide 17: Adoption of Digital Channels & A Future Architecture
Adoption of Digital Channels & A Future Architecture Technology & Transformational Investments Successfully delivered a new Online/Mobile solution on March 10, 2020 – Adoption already exceeding previous solution Zelle also delivered - 100% adoption increase over previous solution Covid-19 accelerate
Slide 18: Appendix
APPENDIX
Slide 19: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($ in thousands, except per share data) 2017 2018 2019 Q3 2019 Q4 2019 Q1 2020 PTPP ROAA: Net Income $ 93,949 $ 118,387 $ 112,633 $ 31,399 $ 25,951 $ 14,931 Note: The Company has presented the following non-GAAP (Generally Add: provision for cred
Slide 20: Loan Type Outstanding by Geography – 3/31/20
Loan Type Outstanding by Geography – 3/31/20 6,000,000,000 5,000,000,000 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 0 NJ PA NY MD All Other States Grand Total 5,581,192,580 1,062,431,293 256,339,871 70,205,137 400,688,545 % of Total Portfolio 75.72% 14.41% 3.48% 0.95% 5.44% Home Equity
Slide 21: Loans by NAICS Sector – 3/31/20
Loans by NAICS Sector – 3/31/20 CRE NAICS Sector Loan Count $ Exposure $ Balance C & I - (Includes owner occupied) Real Estate and Rental and Leasing 1,284 3,468,078,287 3,390,012,647 Accommodation and Food Services 32 181,226,146 179,451,146 NAICS Sector Loan Count $ Exposure $ Balance Real Estate
Slide 22: CRE Investment By Property Type
CRE Investment By Property Type As of 3/30/20 (In thousands) PROPERTY TYPE Count $ Outstanding % Outstanding WARR WALTV Multi-Family 313 1,222,452 32.38% 2.96 51.48% Retail 340 995,090 26.36% 3.23 49.98% Office 214 470,822 12.47% 3.59 50.25% Industrial 133 414,745 10.99% 3.24 47.70% Mixed 173 242,11
Slide 23: CRE To Total Risk-Based Capital
CRE To Total Risk-Based Capital Guideline is 300% of Regulatory Capital 500.0% 452.4% 430.0% 451.5% 438.3% 432.6% 422.2% 438.8% 450.0% 438.6% 428.6% 430.6% 418.4% 425.9% 400.0% 350.0% 300.0% 250.0% 200.0% 150.0% 100.0% 50.0% 0.0% 12/31/15 12/31/16 12/31/17 03/31/18 06/30/18 09/30/18 12/31/18 03/31/1
Slide 24: Performance Ratios - Capital
Performance Ratios - Capital Tier 1 leverage capital Tier 1 risk-based capital Total risk-based capital 16.00 14.00 12.00 13.47 13.47 13.27 13.17 13.12 12.74 12.74 12.67 12.54 12.43 10.00 12.31 11.87 10.34 10.34 10.24 10.21 10.08 8.00 9.65 6.00 4.00 2.00 0.00 2017 2018 2019 Q3 2019 Q4 2019 Q1 2020 N
Slide 25: Q1 2020
Q1 2020 INVESTOR PRESENTATION
Provident Financial Services — Investor Presentation (May 2020) on 6ix