Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Sandler O'Neill & Partners East Coast Financial Services Conference 2009
35 slides from Provident Financial Services's conference presentation, Nov 12, 2009
Slide 1: Sandler O'Neill & Partners East Coast Financial Services Conference
Sandler O’Neill & Partners East Coast Financial Services Conference November 12, 2009 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, President & Chief Executive Officer
Christopher Martin Christopher Martin President & Chief Executive Officer
Slide 4: Corporate Profile
Corporate Profile • NYSE Symbol - PFS • $6.8 billion in assets • Headquartered in Jersey City, NJ • Holding company for The Provident Bank • 170 years young – Oldest NJ chartered bank • Converted from mutual form in 2003 • 84 branch locations throughout northern and central NJ • 2 Loan Production Of
Slide 5: Executive Leadership Team
Executive Leadership Team • CEO & CFO – Newly appointed from within in September 2009 • Senior management team has over 25 years on average of banking experience with large commercial banks & thrifts in our primary markets • Extremely knowledgeable and results-oriented • Creating culture of accounta
Slide 6: Current Retail Franchise
Current Retail Franchise Branches in 11 New Jersey Counties
Slide 7: Provident Financial Services, Inc.
—— —— PROVIDENT FINANCIAL SERVICES, INC,
Slide 8: Focused on Effective Strategic Plan
Focused on Effective Strategic Plan • Challenge - Increase revenue in difficult environment • Created two new lending teams - Middle Market & Business Banking • SBA Initiative • Reduce marginally accretive asset classes • Expand non-interest income with concentration on Wealth Management • Aggressiv
Slide 9: Asset Composition
Asset Composition 25.0% 3.0% 5.3% 0.1% 1.1% 2.9% 62.6% Total cash & cash equivalents Total investments Net loans Foreclosed assets Premises & equipment Intangible assets Other assets 18.5% 68.4% 7.9% 1.0% 0.1% 1.1% 3.0% 9/30/09 9/30/09 12/31/08 12/31/08
Slide 10: Loan Composition (as of 9/30/09)
Loan Composition (as of 9/30/09) 35% 11% 3% 18% 28% 5% Net total of $7.5MM representing premiums, discounts & deferred fees, has not been included in the outstanding loan totals LOAN CATEGORY RESIDENTIAL (1ST LIENS) 1,523,916 HE/HELOC 486,301 OTHER CONSUMER 107,431 COMMERCIAL LOANS 770,878 COMMERCIA
Slide 11: CRE Portfolio Composition (as of 9/30/09)
CRE Portfolio Composition (as of 9/30/09) 6% 15% 4% 10% 17% 18% 1% 26% 3% PROPERTY TYPE HOTEL 72,728 INDUSTRY 183,361 LAND 52,131 MIXED 126,613 MULTI FAMILY 205,503 OFFICE 216,944 RESIDENTIAL 10,999 RETAIL 309,122 SPECIAL USE PROPERTY 31,531 $ OUTSTANDING (In Thousands) Total CRE Loans = $1,209 MM T
Slide 12: Construction Loan Composition (as of 9/30/09)
Construction Loan Composition (as of 9/30/09) Total Construction Loans = $217 MM Total Construction Loans = $217 MM Construction loan balance does not reflect unfunded commitments of $87MM. No loans located outside of NJ/NY/PA 25.3% 48.8% 0.5% 14.7% 4.6% 3.7% 2.3% Primary Property Type Residential "
Slide 13: Asset Quality (as of 9/30/09)
Asset Quality (as of 9/30/09) PFS PEER Non-performing Loans/Loans (%) 1.81 1.95 Loan Loss Reserves/ Loans (%) 1.29 1.42 Loan Loss Reserves/ Non-performing Loans (%) 71.24 97.80 Net Charge-offs / Avg Loans (%) 0.25 0.77 Non-Performing Assets / Assets (%) 1.25 1.53 Source: SNL Peer Group: Valley Natio
Slide 14: NPAs & 90> day Delinquencies / Loans & REO (%)
NPAs & 90> day Delinquencies / Loans & REO (%) Source: SNL 0.83 0.90 1.10 1.34 1.62 2.00 2.35 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 0.00 0.50 1.00 1.50 2.00 2.50 OTHER ASSETS OWNED CONSUMER LOANS COMMERCIAL LOANS CONSTRUCTION LOANS COMMERCIAL REAL ESTAT
Slide 15: Investment Securities (as of 9/30/09)
Investment Securities (as of 9/30/09) 31% 9% 17% Investment Portfolio Summary 27% 1% 14% 1% Aaa Aa1 Aa3 Baa1 Ba2 B1 Caa1 65% 8% 6% 3% 5% 4% 9% Aa1 Aa2 A1 A2 A3 Baa1 Baa3 8% 25% 8% 48% 5% Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 NR 3% 3% 32% 27% 9% 9% 9% 5% 2% 2% Municipal Corporate Notes Private Label CMO
Slide 16: Deposit Composition
Deposit Composition CDs 32% MMA 17% Muni 10% NOW 14% NIB 9% Savings 18% MMA 18% Savings 21% CDs 35% NOW 13% NIB 9% Muni 4% 9/30/09 9/30/09 12/31/08 12/31/08 Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.91% Total Cost of Deposits: 1.51% Total Cost of Deposits: 1.51%
Slide 17: Deposit Growth
Deposit Growth Average Deposit Balances (In Thousands) Checking $427,545 $440,011 $459,330 $537,471 $625,318 Savings $916,391 $877,186 $867,822 $881,064 $878,129 MMDA $686,975 $709,853 $717,283 $749,998 $782,856 Municipal $158,026 $185,483 $226,145 $261,484 $406,658 NIB $459,734 $454,421 $455,524 $4
Slide 18: Time Deposit Maturities (as of 9/30/09)
Time Deposit Maturities (as of 9/30/09) (In Thousands) Time Deposit Maturities $497,006 $856,411 $72,316 $47,040 $146,254 2009 2010 2011 2012 Thereafter 2.57%* 2.29%* 3.46%* 3.88%* 3.64%* *Weighted Average Cost
Slide 19: Borrowings (as of 9/30/09)
Borrowings (as of 9/30/09) (In Thousands) FHLB $47,400 $219,827 $213,511 $9,100 $79,324 Others $- $103,239 $67,000 $45,000 $125,000 2009 2010 2011 2012 Thereafter 4.23%* 4.07%* 3.81%* 3.76%* 3.22%* *Weighted Average Cost
Slide 20: Capital (as of 9/30/09)
Capital (as of 9/30/09) REQUIRED ACTUAL The Company continues to exceed all regulatory requirements and The Company continues to exceed all regulatory requirements and is “well capitalized.” is “well capitalized.” Amount Ratio Amount Ratio 254,812 $ 4.00% 515,898 $ 8.10% 167,565 $ 4.00% 515,898 $ 12
Slide 21: Thomas M. Lyons, Senior Vice President & Chief Financial Officer
Thomas M. Lyons Thomas M. Lyons Senior Vice President & Chief Financial Officer
Slide 22: Financial Highlights
Financial Highlights (Dollars in thousands) BALANCE SHEET: 9/30/09 12/31/08 Total assets $6,816,309 $6,548,748 Total loans 4,321,364 4,526,748 Total deposits 4,875,211 4,226,336 Total investments 1,706,657 1,210,646 Total borrowed funds 1,004,623 1,247,681 Total stockholders' equity 882,620 1,018,59
Slide 23: Financial Highlights
Financial Highlights (Dollars in thousands except Earnings per Share) INCOME STATEMENT: 9/30/09* 9/30/08 Operating Income * $23,904 $34,209 Operating Diluted Earnings per Share $0.43 $0.61 Operating ROAE 3.46% 4.53% Operating ROAA 0.48% 0.72% Net Interest Margin 3.02% 3.08% Operating Efficiency Rati
Slide 24: Return on Average Assets
Return on Average Assets (8.79) 0.86 0.89 0.56 0.65 0.68 0.82 0.46 0.52 0.39 0.73 0.18 0.35 (0.61) 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 PFS Peer Source: SNL Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group, Inc., F.N.B. Corporation, NewAlliance Bancsha
Slide 25: Net Interest Rate Margin
Net Interest Rate Margin 2.87% 3.10% 3.20% 3.10% 2.96% 3.01% 3.27% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Slide 26: Cost of Funds
Cost of Funds 3.14 2.74 2.55 2.47 2.39 2.27 2.07 3.02 2.60 2.52 2.42 2.16 1.98 1.83 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 PFS Peer Source: SNL Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group, Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc., Unit
Slide 27: Pre-Provision Net Interest Income
Pre-Provision Net Interest Income $39,189 $42,569 $45,351 $44,960 $43,931 $43,165 $45,310 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Slide 28: Net Operating Exp / Avg Assets (%)
Net Operating Exp / Avg Assets (%) 1.60 1.54 1.53 1.55 1.36 1.60 1.48 1.46 1.48 1.46 1.35 1.37 1.40 1.42 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 PFS Peer Source: SNL (Total noninterest expense - (foreclosed property expense + amortization of intangibles expense + total noninterest income)) as a percentag
Slide 29: NPAs / Assets (%)
NPAs / Assets (%) 1.25 1.04 0.60 0.42 1.53 1.26 0.68 0.54 0.48 1.05 0.96 0.47 1.04 0.83 3Q09 2Q09 1Q09 4Q08 3Q08 2Q08 1Q08 PFS Peer Source: SNL Peer Group: Valley National Bancorp, National Penn Bancshares, Inc., First Niagara Financial Group, Inc., F.N.B. Corporation, NewAlliance Bancshares, Inc.,
Slide 30: Funding and Liquidity
Funding and Liquidity • Core deposits represented 66.8% of total deposits at 9/30/09 • Loan to deposit ratio was 88.6% at 9/30/09 • Virtual branch as a viable liquidity channel • FHLB borrowing capacity • Securitization of residential portfolio
Slide 31: Quarterly Cash Dividend since IPO
Quarterly Cash Dividend since IPO 0.00 0.02 0.04 0.06 0.08 0.10 0.12 Current Dividend Yield = 4.21%
Slide 32: Looking Forward: Clear Strategy and Effective Execution
Lookin g Forward Clear Strategy and Effective Execution • Expanding relationships while regional and national banks remain dislocated • Process improvements to achieve efficiency target and achieve Line of Business profitability targets • Continue to rationalize branch locations • Improve net intere
Slide 33: Objectives: Transition to Wealth Management
Objectives Transition to Wealth Management Increase awareness of wealth mana g ement services offered • Asset Allocation • Trust and Fiduciary services • Estate services • Financial Planning • Family Office services Increase acquisition speed of new clients • Investment management accounts are easie
Slide 34: Transition to Wealth Management Initiatives
Transition to Wealth Management Initiatives Systems • Upgraded trading platform • Added financial planning platform Staff • Restructured into functional teams designed to meet clients needs • Added dedicated investment management team • Added sales staff • Added dedicated compliance staff Marketing
Slide 35: Sandler O'Neill & Partners East Coast Financial Services Conference
Sandler O’Neill & Partners East Coast Financial Services Conference November 12, 2009