Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Sandler O'Neill & Partners East Coast Financial Services Conference 2010
35 slides from Provident Financial Services's conference presentation, Nov 10, 2010
Slide 1: Sandler O'Neill & Partners East Coast Financial Services Conference
Sandler O’Neill & Partners East Coast Financial Services Conference November 11, 2010 Exhibit 99.1
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: Christopher Martin, Chairman, President & CEO
Christopher Martin Christopher Martin Chairman, President & Chief Executive Officer
Slide 4: Corporate Profile
NYSE Symbol - PFS $6.8 billion in assets Headquartered in Jersey City, NJ Holding company for The Provident Bank Oldest NJ bank chartered in 1839 Converted from mutual form in 2003 81 branch locations throughout northern and central NJ 3 Loan Production Offices in NJ Moving / Consolidating administr
Slide 5: Executive Leadership Team
Senior management team has, on average, over 25 years of banking experience with large commercial banks & thrifts in our primary markets Extremely knowledgeable and results-oriented Culture of accountability, efficiency and integrity Majority of officers have been with publicly-traded organizations
Slide 6: Provident Financial Services, Inc.
PROVIDENT FINANCIAL SERVICES. INC. Sy,
Slide 7: Slide 7
Slide 8: Market Demographics
Market Demographics (as of 6/30/10) Source: FDIC-Summary of Deposit & SNL County Market Rank Number of Branches Company Deposits in Market ($000) Deposit Market Share (%) Total Population (Actual) Median HH Income ($) Middlesex 1,596,006 7.46 794,605 78,561 Hudson 915,698 3.81 607,650 52,525 Morris
Slide 9: Challenge: Increase revenue in difficult environment
Challenge: Increase revenue in difficult environment Community Bank with commercial emphasis SBA Initiative Reduce marginally accretive asset classes Expand non-interest income with concentration on Wealth Management Aggressively manage credit quality Branch rationalization Healthcare Lending Group
Slide 10: Market Capitalization
Market Capitalization: $740.6 million 59,922,431 Shares Outstanding 5,879 Registered Stockholders 15.90% Insider Ownership (includes 7.76% held by ESOP) 61.34% Institutional Ownership 3.56% Current Dividend Yield 130.8% Price/TBV 80.4% Price/BV 14.0x P/E (as of 10/26/10) 12.1x Price/2011 Est. Earnin
Slide 11: Asset Composition
9/30/10 12/31/08 Asset Composition 9/30/10 12/31/08
Slide 12: Loan categories chart
$1,400 $1,200 $1,000 ns) $800 $600 $400 $200 $0 Cc&l mCRE ™@ Consumer Residential
Slide 13: Loan Portfolio: Total Loans = $4,337 MM
Total Loans = $4,337 MM Loan Portfolio Net total of $6.8MM representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals Total Loans = $4,337 MM (as of 9/30/10) (in thousands)
Slide 14: CRE Portfolio by Industry: Total CRE Loans = $1,480 MM
Total CRE Loans = $1,480 MM CRE Portfolio by Industry Total CRE Loans = $1,480 MM (as of 9/30/10) (in thousands)
Slide 15: Construction Loan Portfolio: Total = $134 MM
Total Construction Loans = $134 MM Construction Loan Portfolio Total Construction Loans = $134 MM Construction loan balance does not reflect unfunded commitments of $75MM. No loans are located outside of NJ/NY/PA (as of 9/30/10) (in thousands)
Slide 16: Provident Financial Services, Inc.
PROVIDENT FINANCIAL SERVICES, INC.
Slide 17: Asset Quality
PFS Asset Quality PEER* Non-performing Loans/Loans (%) 2.39 2.41 Loan Loss Reserves/ Loans (%) 1.58 1.67 Loan Loss Reserves/ Non-performing Loans (%) 66.4 89.0 Net Charge-offs / Avg Loans (%) 0.57 1.22 Non-Performing Assets / Assets (%) 1.61 1.87 Source: SNL (as of 9/30/10) *Peer Group : BNCL, CBU,
Slide 18: NPAs & 90+ day Delinquencies / Loans & REO
NPAs & 90+ day Delinquencies / Loans & REO (%) *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS Source: SNL
Slide 19: Investment Portfolio: Amortized Cost
Amortized Cost m US Agencies: $108,072 @ Agency MBS: $474,901 @ Agency CMO: $680,613 Private Label CMO: $104,309 Corporate Notes: $18,608 = Municipal: $287,380
Slide 20: Deposit Composition
Deposit Composition At 9/30/10 At 9/30/10 At 12/31/08 At 12/31/08 Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.15% Total Cost of Deposits: 1.15%
Slide 21: Deposit trends by category
PROVIDENT FINANCIAL SERVICES, INC. $4,780,288 —_— $4,869,438 $4,861,488 S580. z | | 5 3 2 = 9/30/09 12/31/09 3/31/10 6/30/10 9/30/10 Checking 625,318 644,283 660,728 689,166 685,113 Savings 878,129 870,043 872,016 889,735 894,724 m= MMDA 782,856 879,080 899,054 948,658 986,234 Muni 406,658 514,207 4
Slide 22: Time Deposit Maturities
Time Deposit Maturities 1.00%* 1.17%* 2.13%* 3.58%* 2.96%* *Weighted Average Cost (as of 9/30/10)
Slide 23: Borrowings
Borrowings 4.26%* 3.81%* 3.76%* 2.99%* 3.00%* *Weighted Average Cost (as of 9/30/10)
Slide 24: Thomas M. Lyons, SVP & Chief Financial Officer
Thomas M. Lyons Thomas M. Lyons Senior Vice President & Chief Financial Officer
Slide 25: Financial Highlights: Balance Sheet
Financial Highlights (Dollars in thousands) BALANCE SHEET: 9/30/10 12/31/09 Total assets $6,782,295 $6,836,172 Total loans 4,344,657 4,384,194 Total deposits 4,904,556 4,899,177 Total investments 1,744,815 1,702,513 Total borrowed funds 903,610 999,233 Total stockholders' equity 921,048 884,555
Slide 26: Financial Highlights: Income Statement
Financial Highlights (Dollars in thousands except Earnings per Share) INCOME STATEMENT: 9/30/10 9/30/09* Operating Income * $37,590 $23,904 Operating Diluted Earnings per Share $0.66 $0.43 Operating ROAE 5.55% 3.46% Operating ROAA 0.74% 0.48% Net Interest Margin 3.45% 3.02% Operating Efficiency Rati
Slide 27: Return on Average Assets
Return on Average Assets Source: SNL *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS
Slide 28: Net Interest Rate Margin
Net Interest Rate Margin Source: SNL *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS
Slide 29: Interest Cost: Total Deposits
Interest Cost: Total Deposits Source: SNL *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS
Slide 30: Cost of Funds
Cost of Funds Source: SNL *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA, SASR, SUSQ, UBSI, VLY, WSBC, WSFS [Total Interest Expense / (Average Interest Bearing Liabilities + Average Noninterest Bearing Deposits)].
Slide 31: Pre-Provision Net Interest Income
Pre-Provision Net Interest Income
Slide 32: Net Operating Expense / Average Assets
(Total noninterest expense - (foreclosed property expense + amortization of intangibles expense + total noninterest income)) as a percentage of average assets. (Annualized) Net Operating Exp / Avg Assets (%) Source: SNL *Peer Group : BNCL, CBU, FNB, FCF, FFIC, INDB, ISBC, NPBC, NBTB, NAL, NWBI, STBA
Slide 33: Current Dividend Yield = 3.56%
Current Dividend Yield = 3.56% Quarterly Cash Dividend since IPO
Slide 34: Capital: well capitalized
The Company continues to exceed all current regulatory requirements and is “well capitalized.” REQUIRED ACTUAL Capital The Company continues to exceed all current regulatory requirements and is “well capitalized.” (as of 9/30/10) Amount Ratio Amount Ratio Regulatory Tier 1 leverage capital 256,613 $
Slide 35: Looking Forward
Looking Forward Clear Strategy and Effective Execution Expand relationships while regional and national banks remain dislocated Cultivate and reward existing relationships to defend from competition Implement process improvements to achieve efficiency target and achieve Line of Business profitabilit