Provident Financial Services, Inc · NYSE:PFS
Provident Financial Services — Q4 2022 Earnings Presentation
27 slides from Provident Financial Services's earnings presentation, Feb 15, 2023
Slide 1: Q4 2022 Investor Presentation
Q4 2022 INVESTOR PRESENTATION
Slide 2: Forward Looking Statements
NYSE: PFS 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 amen
Slide 3: Corporate Profile
NYSE: PFS Corporate Profile (At or for the Quarter Ended 12/31/22) 3 Bank founded: 1839 Stock symbol: PFS (NYSE) Branches: 95 serving northern and central New Jersey, eastern Pennsylvania, Nassau and Queens County, NY Market capitalization: $1.8 Billion as of 2/5/23 Balance sheet: $13.8 Billion in T
Slide 4: Successful & Disciplined Acquirer
NYSE: PFS Acquired Tirschwell & Loewy, Inc. AUM: $822M Acquired The MDE Group AUM: $1.3B Acquired Team Capital Bank Assets: $964M Acquired First Sentinel Bancorp Assets: $2.6B Acquired First Morris Bank & Trust Assets: $554M Acquired Beacon Trust Company AUM: $1.5B IPO NYSE PFS 1839 Founded 2003 200
Slide 5: Strong Presence in Attractive Markets
NYSE: PFS POPULATION (as of February 2023 Estimates) NJ – 9,317,771 NY – 19,879,255 Queens – 2,340,201 Nassau – 1,393,596 PA – 12,979,881 Bucks – 647,873 Lehigh – 378,463 Northampton – 315,255MEDIAN INCOME AND NATIONAL RANK NJ - $95,596 – 4th nationwide PA - $70,856 – 27th nationwide NY -
Slide 6: Strong Presence in Attractive Markets: Household Profile
NYSE: PFS Average client tenure Business < 1 year 22% 1 – 2 years 8% 3 – 5 years 20% 6 – 9 years 19% 10+ years 32% Consumer < 1 year 12% 1 – 2 years 5% 3 – 5 years 14% 6 – 9 years 14% 10+ years 56% Provident’s NJ deposit share ranks 2nd amongst NJ-based financial institutions* Bu
Slide 7: Proven Consistent Performance: ROAA and Core PTPP ROAA
NYSE: PFS ROAA CORE PTPP ROAA(1) (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Proven Consistent Performance 7 1.15% 0.86% 1.26% 1.29% 1.08% 1.30% 1.16% 1.26% 1.42% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 20 19 20 20 20 21 20 22 Q 4 20 21 Q 1 20 22 Q 2
Slide 8: Proven Consistent Performance: ROAE and ROATE
NYSE: PFS ROAE ROATE(1) (1) See Appendix for a reconciliation of GAAP and non-GAAP financial measures. Proven Consistent Performance 8 8.07% 6.49% 10.03% 10.86% 8.74% 10.57% 9.83% 10.68% 12.37% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 20 19 20 20 20 21 20 22 Q 4 20 21 Q 1 20 22 Q 2 20 22 Q
Slide 9: Historically Strong Track Record of Returns
3.0% 3.5% 3.7% 5.1% 4.0% 4.5% Dividend yield $0.20 $0.21 $0.23 $0.23 $0.24 $0.24 Regular quarterly cash dividend per share (1) 10.05% CAGR 2.76% CAGR +20% 5-year TSR 15.96% (As of 2/10/23) 9 Historically Strong Track Record of Returns Note: See Appendix for a reconciliation of GAAP and non-GAAP fina
Slide 10: Stable Core Funding Base – Q4 2022
NYSE: PFS Stable Core Funding Base – Q4 2022 $ in thousands ($) Balance Total Average Deposits 10,807,745 Average Branch Size 113,766 Cost of Interest Bearing Deposits: 0.90% Total Cost of Deposits: 0.67% AVERAGE DEPOSIT COMPOSITION AVERAGE DEPOSIT COMPOSITION 10 Savings deposits 14% Money market ac
Slide 11: Diversified Loan Portfolio
NYSE: PFS Diversified Loan Portfolio As of 12/31/22 Total Gross Loans $10.26 billion Q4 2022 Average Net Loan Yield 4.82% 11 Residential Mortgage Loans 11% Commercial Mortgage 42%Multi-family Loans 15% Commercial Construction Loans 7% Commercial Loans 22% Consumer Loans 3%
Slide 12: Strong Credit Metrics
Strong Credit Metrics 12 0.76% 1.03% 0.84% 0.86% 0.79% 0.79% 0.88% 0.86%Total allowance to total loans 0.58% 0.93% 0.59% 0.59% 0.55% 0.50% 0.61% 0.59% Non performing assets to Loans +REO 0.55% 0.89% 0.50% 0.57% 0.46% 0.40% 0.59% 0.57%Total non-performing loans to total loans 0.44% 0.71% 0.41% 0.44%
Slide 13: Non-Performing Assets
NYSE: PFS Non-Performing Assets $ in thousands Strong Credit Metrics 13 2019 2020 2021 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Residential $8,543 $9,315 $6,072 $1,928 $5,396 $3,401 $3,120 $1,928 Commercial 5,270 31,982 16,887 28,212 19,533 18,627 35,352 28,212 Multi-family 0 0 439 1,565 2,053 2,040 1,5
Slide 14: Emphasis on Fee Income
NYSE: PFS Emphasis on Fee Income Non-Interest Income $ in thousands 14 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 2019 2020 2021 2022 Q1 22 Q2 22 Q3 22 Q4 22 Other income Net gain on securities transactions Bank-owned life insurance Insurance agency income Wealth mana
Slide 15: Focus on Wealth Management Business
NYSE: PFS * Represents interest on lines of credit to Beacon clients, whose investment accounts are pledged as collateral. 2% 88% 8% 3% Focus on Wealth Management Business 2022 Revenue Advisory $ 25,058,706 Trust & Estate 2,203,645 Tax 607,890 Private Banking 746,109 * Total $ 28,616,350 15 $3.5 Bil
Slide 16: Focus on Wealth Management Business
NYSE: PFS AVERAGE CLIENT SIZE $3,354,000 As of December 31, 2022, based on AUM of $3.5B for 1,031 family relationships AVERAGE FEE 71 bps EBITDA & NET INCOME EBITDA (YTD December 31, 2022) $ 11,246,000 Net Income (YTD December 31, 2022) $ 7,367,000 CROSSOVER PROVIDENT/BEACON (HOW MANY PROVIDENT CUST
Slide 17: Provident Protection Plus, Inc.
NYSE: PFS • Provident acquired SB One Insurance Agency as part of the July 31, 2020 merger with SB One Bancorp. • In July of 2022 SB One Insurance Agency was rebranded as Provident Protection Plus, Inc. • Provident Protection Plus, Inc. provides insurance agency services including business, personal
Slide 18: Appendix
APPENDIX
Slide 19: Non-GAAP financial measures
NYSE: PFS Note: The Company has presented the following non-GAAP (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. Presentat
Slide 20: Non-GAAP financial measures
NYSE: PFS Note: The Company has presented the following non-GAAP (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. Presentat
Slide 21: C&I Loans by NAICS Sector – 12/31/22
NYSE: PFS C & I – (Includes owner occupied) Loans by NAICS Sector – 12/31/22 21 NAIC Sector Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 704 705,568,170 488,813,297 Construction 410 423,255,209 184,684,817 Health Care and Social Assistance 379 358,610,023 275,048,656 Manufa
Slide 22: Commercial Real Estate Loans by NAICS Sector – 12/31/22
NYSE: PFS Commercial Real Estate Loans by NAICS Sector – 12/31/22 22 NAIC Sector Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 2,170 4,852,236,151 4,753,211,960 Accommodation and Food Services 51 219,022,832 218,497,832 Other Services (except Public Administration) 38 30,405
Slide 23: Construction Loans by NAICS Sector – 12/31/22
NYSE: PFS Construction Loans by NAICS Sector – 12/31/22 23 NAIC Sector Loan Count Exposure ($) Balance ($) Real Estate and Rental and Leasing 106 927,487,012 542,758,851 Construction 33 131,327,796 81,287,192 Health Care and Social Assistance 2 38,361,500 18,793,938 Retail Trade 2 16,925,203 16,817,
Slide 24: CRE Investment By Property Type
NYSE: PFS As of 12/31/22 ($ in thousands) CRE Investment By Property Type 24 Prop Type Count $ Outstanding % Outstanding WARR Retail 516 1,651,880,750 28.29% 3.30 Multi-Family 488 1,519,546,317 26.02% 3.20 Industrial 275 1,074,460,624 18.40% 3.31 Office 277 527,702,917 9.04% 3.60 Mixed 335 398,860,4
Slide 25: CRE To Total Risk-Based Capital
NYSE: PFS Guideline is 300% of Regulatory Capital CRE To Total Risk-Based Capital 25 452.4% 422.0% 440.8% 452.4% 448.8% 449.9% 457.3% 473.2% 456.4% 468.0% 471.6% 485.3% 499.6% 491.3% 490.9% 0.00% 100.00% 200.00% 300.00% 400.00% 500.00% 600.00% 12/31/17 12/31/18 12/31/19 03/31/20 06/30/20 09/30/20 12
Slide 26: Performance Ratios - Capital
NYSE: PFS Performance Ratios - Capital 26 10 .3 4 9. 30 9. 45 10 .0 0 9. 41 9. 59 9. 55 9. 45 9. 43 9. 62 9. 78 10 .0 0 12 .7 4 10 .4 6 11 .4 7 11 .3 6 10 .9 2 11 .5 2 11 .4 3 11 .4 7 11 .5 6 11 .0 5 10 .9 1 11 .3 612 .7 4 10 .5 8 11 .5 9 11 .4 7 11 .0 4 11 .6 5 11 .5 5 11 .5 9 11 .6 8 11 .1 6 11 .0
Slide 27: Q4 2022
Q4 2022 INVESTOR PRESENTATION
Provident Financial Services — Q4 2022 Earnings Presentation on 6ix